Getting the Innovation Equation Right

Editor’s Note: Insights That Work is a showcase of how the GRIT Top 50 Most Innovative Suppliers create solutions to some of the biggest challenges in insights today. This year’s edition provides case studies on brands like Nestle, Shell, Frito-Lay, and more.

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Challenge

As companies look to maximize ROI, the efficiency of innovation is highly scrutinized. Launching subpar innovations creates a double-penalty effect, not only wasting the innovation investment but also the funding and distribution secured at the expense of the parent brand. This is why we need the Innovation Equation. First, you need the right innovation—one with the potential to succeed, validated through predictive research. Secondly, you need to ensure that you’re supporting that innovation with the right activation – tailoring the marketing, distribution, targeting, etc. to maximize the potential payout of the initiative and minimize the negative impact on your parent brand. Simply put, it’s supporting the right innovations in the right way for a portfolio win.

Solution

Nielsen BASES’ new Activation Profiles is the key to getting the Innovation Equation right. Activation Profiles is a classification algorithm and analytical framework that identifies the role each innovation can have within a portfolio and informs how they should be supported in-market. While many brands don’t get the Innovation Equation right, here are some examples of those that did…and what could have gone wrong.

Outcome

Nestle’s Buitoni La Sfoglia Rotonda Senza Glutine was launched as a Targeted Play to address the need for gluten-free, celiac-friendly dough that lived up to Italy’s standards. It was groundbreaking because the dough was able to deliver on taste and texture when other gluten-free offerings did not. Buitoni connected with their engaged target by launching during Celiac Awareness month and ensured primary marketing tactics and messaging were tailored to reach them. This resulted in an exciting incremental win for Buitoni.

But what if the brand launched the same product with the same targeted activation in the U.S.? They would have potentially limited their audience by positioning “gluten-free” as a medical condition, when they may have been able to capitalize on the bigger opportunity of “gluten-free” as a mass trend. B&G Foods’ Green Giant Riced Veggies were identified as an Emerging Player in rice alternatives before they became mainstream. Riced vegetables were not a big deal yet—there was little chatter and excitement in the marketplace at launch. Green Giant assessed this opportunity correctly and entered the marketplace with a fairly limited level of distribution while focusing on educating consumers about the trend.

As the desire for riced vegetables grew, Green Giant identified an opportunity to increase distribution and extend the line. By monitoring this trend closely and tailoring activation, Green Giant was able to see over 100% sales growth from Y1 to Y2. It would have been very easy for Green Giant to launch Riced Veggies as a mass initiative from the start, supporting it with too many resources too soon and taking away from the parent brand and impacting incrementality.

No matter what type of innovation, a category disruptor, a new flavor, or a niche launch, it’s about getting the Innovation Equation right. Activation Profiles is the way to get the equation right before you release an innovation to market and risk your investment and brand position.