It is clear that innovation from major brands is at an all-time low. Indeed it almost seems that food innovation is dead.
The trend of cost cutting that started in 2008 has continued as the retail landscape has changed forever with the arrival of the discounters.
The price pressure that their successful growth has placed on the established top five retailers has seen all major brands put under margin pressure as the trading environment has hardened.
Inevitably this has led to a focus on value engineering rather than innovation as brands have explored a myriad of cost reduction initiatives, often accompanied by price promotion marketing which can only ever deliver a knee-jerk sales uplift before they slide towards their pre-promotion sales level.
Against this backdrop, consumers are more savvy than ever – constantly looking for not only the best value for money but critically in my view, best value for time.
One only has to look towards the demise of once-loved retail stores and restaurant chains to evidence consumers voting with their feet as they seek better value for time elsewhere.
Achieving relevance and consumer engagement against this harsh backdrop is a challenge that major, international conglomerates have turned their back on – choosing to leave innovation to new market entrants and to ultimately purchase shining stars once they have undertaken the pioneering adventure and achieved success – Graze being the latest example following their acquisition by Unilever.
But of course, the opportunities for entrepreneurial brands are better than ever before.
Technology can both fast track and reduce the cost of bringing new products to market.
Online is a fabulous, direct to consumer sales channel, often with reduced costs and higher margins.
And the likes of Amazon offer effective third-party sales and logistics as a launch pad for new brands.
And whilst the price war continues amongst the established food retailers, the independent sector is experiencing new found growth, providing numerous opportunities for new market entrants with fabulous products that deliver on all levels.
The growth in farmers markets and the popularity of eclectic eateries that sell the ingredients used in dishes on their menu are further opportunities for new and exciting products.
And there are growing signs that the major retailers are starting to turn their attention to offer differentiation, seeking out and supporting brands with the potential to make them destination stores for consumers and specific demographics within them.
The increase in vegan brands and the size of their ranging within chilled in particular is an example of this – as is the growth in gluten free products now on sale.
Non-dairy is another growth opportunity, not just attracting vegans but also a broader demographic who are becoming more health focused with a realisation of we are what we eat.
And nowhere is this more evident than in the explosion of interest in gut health products off the back of large research studies which have linked poor gut flora to depression, anxiety, Parkinsons, diabetes, obesity and even dementia.
It is clear that the opportunities for pioneering brands are significant and with increasing interest from investors in supporting new food brand concepts, the future looks bright indeed.
For information about how I help my clients launch new products take a look at Food Brand Strategist.
And take a look at BoomBod as an example of my work.
If you’d like to explore how I can help you with food innovation, ping me an email so we can schedule a call.
Call: +44 (0) 207 205 2998 or email today for an initial chat.