The Problem with CPG Innovation

The Problem with CPG Innovation

Madeline Scanlon

As consumers, we don’t often consider what it takes for our favorite products to become part of our life. Consumer packaged goods (CPG) are products consumers regularly use and replace—including things like groceries, clothing, and household products. But the journey to creating a successful product on shelves can be a long, arduous one. Beyond making it past the company gates, a new product has to land with consumers to cement its place in the market.

The key to success? Truly innovative products that put consumer needs at the center.

Innovative products solve a problem, make something better, or simply excite the customer. A truly innovative product will seamlessly fulfill consumer needs, fit into their day, and keep them coming back for more. But that is no easy task—and the main challenge—for many CPG companies.

Why is CPG innovation difficult?

Many would assume CPG companies are some of the best innovators given their large marketing and R&D budgets along with their extensive industry experience.

However, depending on the size of the company, there are many barriers to creating innovative products. First, CPG companies are risk-averse. They usually have a large portfolio of products to consider when adding to a line, and it’s very expensive and time-consuming to dive into something new.

Companies want to see how a trend maintains before jumping in. Some companies don’t even consider following a new trend until an innovative competitor starts to hurt their business. By then, it could be too late for them to enter and make a big splash

The second barrier to CPG innovation is that CPG companies are not very agile.  When the company feels safe to start innovating, the project can move through R&D, marketing, corporate strategy, sales, and possibly even international teams before coming to fruition as a product. Despite this massive collaborative effort, getting an innovative product to shelves can take 18 months or more.  

A year and a half after the peak of a trend, consumers have already given their loyalty to the original innovators, or the trend has passed. That’s why we see so many CPG companies innovate through acquisition. When the window of time has closed, large CPG companies can try to purchase those small, innovative brands to add to their portfolio.

It’s unrealistic for companies in the CPG industry to simply acquire any and all small innovators that chip away at market share. So what can these companies do to keep launching innovative products that consumers love?

How to successfully innovate in CPG

The equation is clear. Risk aversion + extended timelines = out of touch products. So how do we solve for innovative products consumers love?

With rich, forward-looking data.

CPG innovations fail when they’re not backed by the right insights. What is flying off shelves today will not be as relevant in 18 months. We know CPG product development timelines will stay the same, so the insights that back these innovation decisions need to be focused on the future. With data that identifies the trends before they take off, CPG companies have the assurance to launch the next big thing. Though any new product carries risk, having the data to back forward-looking decisions allows CPG companies to innovate confidently. Therefore, big data and the CPG industry should go hand-in-hand.

Innovation case study: Quaker Oat beverage

Despite the aforementioned, knowing a trend is going to happen doesn’t guarantee a new, innovative product will succeed. For example, PepsiCo’s Quaker Oats experienced lackluster results with their innovation in the oat milk space. In November 2019, Food Navigator reported PepsiCo was discontinuing their oat beverage after less than a year on shelves.


Ultimately, it came down to understanding what early-adopters to oat milk were looking for. Quaker put their time and effort into creating a healthy formulation that was lower in sugar and higher in fiber than its competitors. Unfortunately, consumers weren’t looking for a healthy option; they were looking for good taste. The “heart-healthy” angle did not land with early-adopters, and Quaker had lost the oak milk game.

It is surprising the 143-year old oats brand could not compete. Grocery stores around the country were stocking oat milk by summer 2020 and it was becoming commonplace in big coffee chains. However, brands like Oatly, Silk, and Califia Farms were in-market for a number of years already.

For the small, agile brands, these products propelled them into the mainstream. For large brands like Silk—owned by multinational food company Danone—relied on existing brand equity to seamlessly introduce their extension to consumers.

How Evergi helps CPG brands innovate

CPG innovation trends are a challenging and time-extensive feat to keep up with—yet the pace of innovation is accelerating. Success in the CPG market intrinsically relies on concrete data that drives accurate decision-making. CPG companies that wish to stay ahead of the latest trends can effectively compete with smaller, scrappy brands. That’s where evergi™ comes in.

With the evergi™ platform you’ll be able to:

  • Uncover emerging trends sooner. evergi™ offers robust social listening data and expert trend analysis.
  • Validate sooner. Get a high-level snapshot of SKUs, brands, personas, flavors, and more to innovate with confidence.
  • Know your positioning. You’ll access a combination of consumer psychographics and product usage data for targeted product positioning.
  • Know your market. Need state-driven consumer insights allow you to take a customer-centric approach to product development.

Your innovation teams need access to robust data to create an informed strategy to overcome prominent CPG challenges. Streamline your product development, identify and act on emerging trends quickly, and build a customer-centric brand.

Learn how to fuel faster, more accurate product innovation!

Get the Insights

Meet Evergi™

Sign up for the Inside Wellness newsletter to stay up to date with trends and insights directly from the platform.