Innovation can help brands ride a recession
16 Oct 2008|Added Value
As a potential recession looms on the horizon, the wise companies will be those who appreciate that innovation drives growth. It’s important not to be overwhelmed by innovation as a concept. It doesn’t have to be about a big, bold launch.
There are many examples of FMCG companies doing really good incremental innovation through packaging. Take Mars, and its pet food business. Ten years ago everything was in a can and now virtually all wet food for pets is in foil pouches, which are much more convenient.
Innovation on a smaller scale will drive profits. For example, Walkers Sensations, a brand stretch into the premium evening snacking market created a 130m euro brand in just six months.
Innovation will also breathe life into tired brands. Take Levi’s Engineered Jeans, the new jean ‘with a twist’ that endeared the Levi’s brand to its core youth market again selling four million units in just 18 months.
The companies most attuned to innovation are those for whom not innovating is deeply uncomfortable. It’s a kind of truism, but the technology businesses are much better at category-breaking innovation than, for example, the packaged goods businesses. For the FMCG sector, taking the decision to tear down a factory and build a completely new production line is a tough one.
Apple is a well-known but inspirational example of a company’s commitment to bold innovation. In the year 2000, if you had asked a room full of experts who would be the best company to develop a new product that required expertise in three disparate fields, computer technology, portable technology and the music industry, everyone would have answered Sony. Then in 2001, Apple launched the iPod, despite no experience in the music licensing Industry and limited experience of portability. We all know how.prev next