Innovation in FMCG

What is innovation in FMCG?

The usual meaning of “innovation” refers to the introduction of new products providing the shopper/consumer with new benefits, meeting new needs, or offering convenient and innovative solutions.

We can also consider as innovation new processes in supply chain, shelf organization and communication at the point of sale.

• Product innovation:

launch of a new product, range or category offering a positive contribution in terms of consumption needs or providing new benefits or solutions to the shopper/consumer. As an example, the introduction of capsules started a new way of consuming coffee, increasing the level of choice in terms of taste based on the origin, blend, or intensities and lately providing new benefits such as biodegradable and ecological capsules.

• Range extensions:

the impact of all product launches is not identical. Expanding the range of flavors of a product by introducing a new variety cannot be considered as a “true” innovation even if we cannot downplay the value it can bring. Usually, range extensions or product rotations work best in their first occurrences, but their impact tends to decrease as they become systematical.

• Innovation in processes:

any change that directly impacts the interaction product/shopper at the point of sale. For example the introduction “ready to shelf” packaging (display boxes, quarter pallets, etc.) cross-merchandising (e.g. snacks with soft drinks) or definition of new departments as has been the case for “biological” products in the past few years. One could also mention different ways of offering products like bulk dispensers, self- scanning, or stores without cash registers.

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