Navigating Innovation in CPG

April 4, 2024
by SPINS Marketing

Exploring Innovation and Values in the CPG Sector

Innovation: A Necessity in The Industry

The CPG and natural industries’ leaders come together at Expo West, making it a unique hub for disruptive innovators. At this year’s show, we made the most of being surrounded by great minds and partnered with The Food Institute to chat with leaders in venture capital, manufacturing, retail, and more. We asked each of them to explain what looks like in their business and how data plays a crucial role in identifying and articulating emerging trends.  

Innovation is paramount in the CPG industry and can come in many different forms, be it a new flavor, the addition of a functional ingredient in a new format, or even a different type of packaging. There’s always something new and exciting to look out for in the industry—and it usually starts with consumers. 

Decoding consumer preferences through their purchases is crucial for driving innovation. These data-driven insights are reshaping how businesses approach innovation. By curating and enriching data, industry players can capture emerging trends, optimize assortments, and drive differentiation in an increasingly tough market. This approach not only fosters differentiation but also propels category and even industry growth. With a focus on harnessing data to decode emerging trends, the industry is poised for continued innovation and success. 

Innovation is Not Just ‘New Items’

Innovation lies at the heart of the food industry’s evolution, driving progress and meeting the ever-changing needs of consumers. Kathryn Peters, Head of Industry Relations at SPINS, emphasizes that innovation isn’t just about launching new products—it’s about pushing boundaries. It can be about embracing sustainability, improving health outcomes for individuals, or ensuring that animal welfare is top of mind.  (Video: Jump to 00:39)

In today’s fast-paced market, data-driven insights are essential for identifying emerging trends, optimizing distribution channels, and navigating the complexities of product lifecycle management. By leveraging robust data analytics, businesses can make informed decisions, seize opportunities, and drive sustainable growth in an increasingly competitive landscape. 

“Today’s product lifecycle is moving faster than ever, and if you only go by instinct, you are going to miss a window,” Peters says.  That window could be finding the right retailers or understanding the full potential of an up-and-coming ingredient 

Looking ahead, we see brands fall into a few key trends that are shaping the industry, including a focus on increasing healthspan, the rise of global flavors, and the importance of planetary health and sustainability. To succeed in this dynamic environment, brands and retailers must embrace innovation as a strategic imperative, harnessing data-driven insights and aligning with evolving consumer values to drive meaningful change and shape a healthier, more sustainable future for all. 

“Today’s product lifecycle is moving faster than ever, and if you only go by instinct, you are going to miss a window.”

Kathryn Peters
Head of Industry Relations, SPINS

Retailers Thrive With Innovative Brands on Shelf

The retail landscape has changed in recent years as it has dealt with issues ranging from supply chain breakdowns to the rise of e-commerce and yet, they continue to adapt and overcome. As consumer preferences continue to evolve, Andrew Henkel, President of Retail at SPINS, emphasized the paramount importance of innovation as retailers try to meet the surge in demand for natural and better-for-you foods. (Video: Jump to 13:12)

“Sustainability is incredibly huge, so consumers are equally concerned about how a product tastes as what is the sustainability footprint of the company behind it,” Henkel says. Brands and retailers can’t afford to ignore the importance of growing priorities like sustainability because consumers are doing their homework. 

To continue to stay competitive, retailers are harnessing data-driven strategies to identify breakthrough products and stay relevant in their customer’s minds. The average consumer is better informed on their food choices in this era and many even rely on online research to inform in-store purchases. To support this, retailers are leveraging robust product content to enhance the shopping journey and help consumers find products that fit their dietary preferences and lifestyles.

“Sustainability is incredibly huge, so consumers are equally concerned about how a product tastes as what is the sustainability footprint of the company behind it.”

Andrew Henkel
President of Retail, SPINS

Ingredion: Innovation at The Ingredient Level

Ingredion stands out in the food ingredient solutions sector for its forward-thinking approach and commitment to innovation. Megan DeStefano, Head of Strategic Growth at Ingredion, takes us through how the company has cemented its position as a global leader in plant-based ingredients.  (Video: Jump to 18:53)

Innovation isn’t just about creating products; it’s about crafting experiences that resonate with consumers from the first bite, emphasizing the importance of taste, health benefits, and sustainability in today’s market.  

The company’s innovative spirit is evidenced in its substantial portfolio of patents for new technologies and the operation of numerous Idea Labs worldwide. These hubs of creativity foster collaboration and co-creation with customers, ensuring that the flavors and tastes developed are well-suited to local preferences. This global yet local approach to innovation ensures that Ingredion remains at the forefront of the food industry, constantly adapting to and anticipating the needs of communities around the world while enabling brands to bring new products to market. 

As consumers increasingly seek healthier, sustainable, and ethically produced food options, Ingredion’s product development strategies are meticulously aligned with these demands. By focusing on plant-based solutions and spearheading the development of health-centric products that do not compromise on taste, Ingredion is leading the way in redefining the future of food. This commitment to innovation, coupled with a deep understanding of consumer trends, positions Ingredion as a key player in shaping the future of the food industry. 

CHOMPS: Disrupting The Meat Snack Category

CHOMPS has positioned itself as a leader in the snack industry through a relentless focus on innovation, driven by a mission to disrupt traditional snacking norms with products that reflect the founder’s values, including sustainability, nutrition, and animal welfare. Claire Zwierzchowski, Sr. Director of Business Analytics, and Matt Landon, VP of Strategy Insights explain how this mission has guided CHOMPS through a crowded category and paved its way to success. (Video: Jump to 07:48)

Central to CHOMPS’s success is its commitment to elevating the traditional jerky experience to meet the demands of modern consumers. By prioritizing better-for-you ingredients, zero sugar, and sustainably sourced proteins, CHOMPS offers a healthier alternative to the sugar-laden, filler-heavy options that have historically dominated the market. This dedication to quality and healthfulness, without compromising on taste, addresses the growing consumer trend towards healthier snacking options. 

Moreover, CHOMPS distinguishes itself in the crowded natural food space through ongoing innovation in flavors and formats, continually expanding its product range to appeal to a broader audience. The introduction of new, exciting flavors and zero-sugar options exemplifies the brand’s commitment to innovation while staying true to its core values.  

As CHOMPS looks to the future, it remains focused on overcoming market challenges by adhering to its principles, ensuring that it continues to deliver high-quality, flavorful, and sustainable snack options to consumers around the globe.  

Prelude Growth Partners: Investing In Innovative Emerging Brands

Will Quartner from Prelude Growth Partners shared insights into the investment firm’s strategy, highlighting its dedication to fostering innovation within high-growth consumer brands. Focused on sectors like food and beverage and personal care, Prelude Growth invests in companies that align with enduring consumer trends such as clean ingredients, sustainability, and nutrient-dense products. (Video: Jump to 24:26)

Quartner emphasized the importance of innovation, pointing to examples like Blueland’s plastic-eliminating packaging solutions and Banza’s nutrient-rich chickpea-based foods as examples of the firm supporting revolutionary products that cater to evolving consumer preferences. 

The selection process for investments at Prelude Growth is heavily data-driven, leveraging analytics to identify brands that perform exceptionally well on retail shelves. By analyzing sales growth, unit growth, velocity, and market trends using tools like SPINS, the firm pinpoints opportunities that stand out in a crowded marketplace. This rigorous approach ensures that only brands with authentic messages, product differentiation, and significant consumer appeal receive investment, aligning with the firm’s commitment to backing innovations that meet the modern consumer’s demands. 

Post-investment, Prelude Growth plays a crucial role in sustaining the cycle of innovation within its portfolio companies. Through board-level involvement, the firm guides these companies towards areas offering the most attractive risk-adjusted returns, including product and packaging innovation. This strategic support allows companies to continue pioneering in their respective fields, underlining Prelude Growth’s commitment to not just financial investment but also empowering brands to keep innovating in ways that resonate deeply with consumers and lead the market. 

Innovating Forward

Innovation in the CPG industry encompasses everything from novel packaging to unique ingredient formulations. In essence, it drives brands to constantly raise the bar and pushes industry standards forward, allowing consumers to buy products that are better not only for them but for the planet and the animals. 

Time and time again, we see new entrepreneurs step up to shake up sleepy categories and bring forth ideas that resonate with the modern consumer.