How a CPG startup can spark innovation

Customers today expect new products at rates they’ve never demanded in the past. Attention spans are limited and people are quick to move onto the next thing. This is especially true in the world of consumer products — newness increasingly drives the customer journey. It encourages discovery, trial, and engagement.

Brands today have no choice but to innovate, even if they were founded just a few years ago. But, that’s easier said than done. Most early-stage consumer businesses are new to navigating the online and retail landscape. They are just getting traction on their original product when asked to launch something new. In a rapidly changing CPG landscape, how should a startup think about its innovation strategy?

It is important to remember that speed to market is critical. Smaller brands have the ability to be nimble and creative when it comes to launching and creating new products in a faster way. This is a strength that startups must actively cultivate, and it helps build defensibility against incumbents. So start small and move fast.

Here’s what I suggest to early-stage consumer brands.

  1. Focus on incremental (vs.disruptive) innovation: innovation doesn’t necessarily mean radical change. It can mean new flavors, new ingredients, or even new packaging. Start by changing 1 thing at a time. This makes innovation easier to grasp and to track: if a new product is successful, you want to know exactly why. Incremental innovation is a good way to start, and keep those disruptive ideas in the back of your mind and continue to build towards them.
  2. Brainstorm: this is the fun part, so don’t skip it. Not only does innovation build a brand with customers, it can also help build your company culture. Involve your entire team in guided brainstorming for new products. Sometimes, the best ideas come from the most unexpected people/places.(Aside:I like the way The Daily Show manages brainstorming & creativity. Listen to Adam Grant’s podcast here.)
  3. Narrow it down: pick the winner and 2 runner-ups, and focus on those products for the next 3 months. Share the winners with the team. Emphasize that all ideas from the brainstorm were considered and some may happen in the future, but for now the team needs to align on the top priorities.
  4. Define the product: your company has a mission — each product should too. I like to use this framework(notmine, took it from an MBA class): For[customerX], who need[jobto be done], this product is[keyvalue prop]. Unlike competitors’ products, we provide[keypoint of differentiation]
  5. Calendar it: often, the most effective tool is also the simplest. I’ve found an annual high-level innovation calendar(updatedquarterly) is necessary for brands that want to focus on creating and launching new products. The simple step of creating the calendar makes innovation real and encourages teams to focus on the tactics and timing of innovation. Align the innovation calendar with your marketing and sales calendars to get teams in sync.
  6. Launch: once you have a calendar, build a launch plan for each new product and hold yourself accountable.
  • Start weekly tastings/testings: get in the habit of trying new products every week, even if it’s just for 15 minutes.
  • Test & iterate: find a venue to pilot products and get customer feedback. Events/parties are a great way to test new products as are influencer crews.
  • Limited release: Incorporate feedback into a limited batch launch, and gather as much data as possible.

Innovation is muscle that must be exercised, and there’s a lot of value in starting to build it as a core competency early on in a CPG startup’s lifecycle.

Written by

Consumer investor @ CircleUp. Product obsessed. People focused. Easily intrigued. Rarely impressed.

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