In its annual trends report, out tomorrow, Leatherhead will say there has been a ‘notable shift’ in how food and beverage companies innovate over the past 12 months. According to Leatherhead, consumer and technical expertise is increasingly driving innovation ‘rather than simply supporting or validating it’.
Mark Butcher, Leatherhead commercial director, told FoodNavigator that companies who can deliver successful innovations ‘in a lean way’ are set to reap ‘the greatest rewards'.
“A key part of this is having a clear understanding of what consumers want, what will improve their lives, what the market allows for and what is scientifically or technologically possible. These aspects have always been considered, but too often this happened in isolation. What’s more, the detail was frequently ignored until the end of the innovation pipeline or even until launch.
“It’s now evident that the most effective businesses consider these factors much earlier in the R&D process, and in an integrated, holistic way. This creates a much leaner, more agile pipeline which supports bigger bets and ensures new products get to market more quickly.”
The business consultancy’s research draws on insights from food and beverage organisations, including large corporations and start-ups as well as regulatory authorities and associations connected to the industry.
Responding to ‘complex and dynamic’ issues
The evolution of innovation processes from traditional linear approaches comes in response to the seismic shifts taking place in the consumer landscape, Leatherhead believes. These range from ‘consumer empowerment’, to sustainability concerns and regulatory issues.
“The sector is in the throes of a perfect storm - even three years ago nobody could have predicted its ferocity. Innovation is still vital, but it needs to be purposeful, focused and agile enough to adapt to multiple evolving demands," Butcher explained.
“We predict that in the coming months and years, the most successful food and beverage brands will put scientific, technical and regulatory expertise right at the heart of business growth, on an equal weighting with consumer, innovation and marketing functions. Essentially, consumer and technical expertise will become the starting point of the development process, ensuring new ideas satisfy market requirements and timelines,” he forecast.
Agenda-setting science, nutrition and regulation
By positioning experts in nutrition, science and regulatory affairs to lead the innovation agenda, food and beverage corporations will be able to develop innovation strategically aligned with the shifting global landscape, Leatherhead suggested.
This will require the development of cross-functional teams of specialists that work collaboratively to anticipate global trends and regulatory changes.
“It’s about creating the time and space for cross-functional teams to look at the bigger picture, investing in science and applying a global perspective to decision making early on in the innovation process," Butcher said.
‘This capacity is essential’
According to the research firm’s commercial director, making technical expertise a priority in the innovation process will help food and beverage companies differentiate their offerings in the long-term.
“When it comes to the delivery of transformative, complex and globally relevant innovations – such as those related to natural, health-benefits, sustainability or consumer experience and convenience – this capability is essential. We believe strategic innovations in this vein will ultimately support the long-term success of leading food and beverage companies,” Butcher told us.
And while innovations like line extensions and flavour variants ‘will still have a role to play’ in the innovation mix, Butcher warned that companies must achieve this without allocating significant resource to developments that are not strategic. These innovations, he suggested, should be managed at a national or regional level.
“It is critical that this less transformative innovation is managed locally so it can respond to tactical demands of specific markets with limited resource allocation.
“If a large multinational food and beverage business is spending 80% of its time or resources on tactical activities like line extensions, it’s missing opportunities elsewhere and potentially forgoing its long-term success.”