When it comes to new products, two of the key numbers or stats to know are 30,000 and 95%. Clayton Christensen, a Harvard Business School professor says 30,000 new products are introduced every year and 95% of them will fail.
Or, stated differently, only 1500 of the 30,000 new products brought to market will survive. Needless to say, the odds are heavily stacked against any given product’s success.
Over the past year, I’ve come across two very intriguing and telling articles re: the subject of new product innovation. One has to do with millennials, the other with how an iconic brand is using product innovation to drive growth.
Gobs of Information
“The effects of millennial consumers and the impact of their purchasing decisions are appearing in the food and beverage new product development process.”
That was the opening line to an article aptly titled “Millennials setting the pace of new product innovation.” It referenced a new products report released by market research firm IRI, entitled New Product Pacesetters.
In discussing the findings of the report, Susan Viamari, VP of Thought Leadership for IRI, said changing demographics are changing the product development process. “Millennials have money, jobs and opinions, and they are looking for new products that are helping them have experiences and find solutions.”
Viamari went on to say that millennials account for one-third of overall CPG sales and they are “more educated, women in particular, and they are more connected. . . .They have gobs of information available, and they Google everything.”
The report also spoke to the fact that having a new product labeled a success is “not about launching the next $100 million new product,” but about “building relationships that will last a lifetime.”
There is no doubt that any brand looking to engage the millennial market needs to be highly strategic in ALL of its thinking and especially when it comes to launching a new product. This generation is absolutely about relationships and purpose-driven brands.
As the report astutely stated: “Millennials are moved by products that allow them to express themselves as individuals and stewards of benevolence.”
The General Pivots
When an iconic brand such as General Mills uses a term such as “return to our historic levels of innovation” you sit up take notice.
Last year, during the company’s annual investor day, General Mills’ group president of North American Retail, Jonathan J. Nudi told the audience that in 2018, a percentage of their net sales were driven by new products entering the market, adding that “in fiscal ’19, we expect to return to our historic levels of innovation, with items launched in the past year representing roughly 6% of net sales across our portfolio with some categories well above that average.”
The new product lines are wide in scope and are a clear sign the brand is doing its best to serve a broad group of customers.
Jodi Benson, Chief Innovation, Technology and Quality Officer, said the brand is thinking bigger about unmet needs that people might have when it comes to their food choices while Lanette Shaffer, a Senior Innovation, Technology and Quality Director says it’s all about options.
“What people need out of their food moments varies from person-to-person,” says Shaffer. “For some, convenience is key. For others, diet or allergy restrictions play a main role in food choices. And in some cases, the need is simply to fulfill the craving for a delectable treat.”
General Mills Chairman and CEO Jeff Harmening put it in the best context saying: “In a world of high change, it’s clear to me that ‘consumer first’ is more relevant than ever. I firmly believe that when we serve our consumers and give them what they want, we win every time.”
It really is that simple. Give people what they want, and the rest will take care of itself.