The opportunity for consumer packaged goods research accenture. Main types of innovation 1 a product innovation is the introduction of a good or service that is new or. That is thrusting their cios, and it organizations, into a new role. The pace of change has surpassed all prior shifts in the nature of an industry. Apr 04, 2015 first, innovation needs to break out of its narrow definition as marketing tech. Transforming your cpg company into an intelligent enterprise abstract typically, cpg companies have been pioneers in defining industry best practice processes and solutions. Mentor cpg gel breast implants are filled with a highly cohesive gel and have a unique, tapered appearance.
New product pacesetters product innovation and the. And, online sales made up 64% of total 2018 growth. As traditional ways of doing business get disrupted, cpg. Small and mediumsized players, many of whom are new to the cpg industry, are. The goods that comprise this category are ones that need to be replaced. First, innovation needs to break out of its narrow definition as marketing tech. How agility at scale can be a transformative cpg growth model. This is despite the fact that most innovation today is directed toward developed markets. As they expand globally, cpg companies face another hurdle. In 2018, online sales are expected to represent a scant 5% of the books of business for consumer packaged goods cpg companies. Secret to successful new product innovation nielsen. Nielsens research of the innovation processes at 30 large cpg companies operating in the u. Gone are the days of fast and furious new product innovation. Supercharging innovation is rightly considered missioncritical for all manner of businesses.
Jun 28, 2016 nielsens leader of strategic innovation and coauthor of the report rob wengel said all three metrics are difficult to meet, especially when 3,000 products are launched every year in the cpg. By contrast, only 33 percent of swedish consumer survey respondents felt the same. Cpg manufacturing continues to feel pressure to perform. Speed cpg product innovation with improved scientific data management and reporting fiercely competitive and fast paced, the consumer packaged goods cpg industry relies on product innovation to maintain existing and acquire new customers, increase profitability and drive business growth. Idc enduser conversations 3 reasons why new products fail what cpg companies say managing the product lifecycle is key by 2020, idc estimates this will climb to 70%.
Accelerating digital innovation in dd boston consulting group. New product pacesetters product innovation and the pace of change. Digital innovation in consumergoods manufacturing mckinsey. Excellence, productbrand leadership, or customer solutions. Cpgs highly customized market and continuous product innovation has the added pressure of supplying safe products to the market faster. This is fundamentally disrupting value chains, with retailers considering developing their own private label products at the same time as cpg. We combine local and global expertise to help you answer questions effectively. Add your info below to have the pdf sent to your inbox. Plm streamlines processes across a products lifecycle, maximizing value of product information throughout the value chain keywords siemens plm software, product lifecycle management, plm, innovation management, cpg, commercialization, institutionalization created date. Estimates of new product innovation failures range from 53 to 86 percent. The following is a summary of the most influential factors shaping the cpg sector today.
Product innovations vary in their degree of newness from, on one extreme, products which create entirely new markets. The time has come to tie product innovation, development, and commercialization processes together with a holistic platform of solutions that provides continuity and connectivity of information, people, and processes. New product pacesetters building bridges to a growthfilled. Unlike round breast implants, cpg breast implants are teardrop shaped, meaning theyre thinner at the top and gently slope to a fuller projection point near the implants bottom to mimic the silhouette of a natural breast. Not only has the cpg industry shown exceptional growth in the past few years, but the rate of cpg sales growth is expected to continue to increase year over year. Unlocking growth in cpg with ai and advanced analytics.
Consumers under 35 differ fundamentally from older generations in ways that make mass brands and channels ill suited to them. Examples of consumer packaged goods include food, beverages, cosmetics and cleaning products. Business model innovation in consumer goods deloitte. When a brand or retailer fails to deliver on these expectations, consumers will move on. To maintain and grow shareholder value, consumer packaged goods cpg and related process industry companies must find approaches to product innovation that can satisfy markets hungry for new products while simultaneously addressing local regulations and keeping cost and time burdens of new product development to a minimum. At the heart of formulation development is physical testing and the data capture. In humans, the mutation rate from 5methylcytosine m5c to thymine t is 10. Witness the rapid adoption of ecommerce purchases up. For consumer packaged goods cpg companies, however, a unique set of circumstances is making this ever more challenging.
Percentile average is calculated as the relative percentile ranking for each year. The disappearing center store is much closer than you think. The consumer packaged goods industry is experiencing tremendous growth, as well as rapid changes. Since 2011, the organicgrowth rate for cpg companies has declined. New product pacesetters product innovation and the pace of. Innovation in all human areas is applicable from product development, methods of management, ways of doing works and etc. How agility at scale can be a transformative cpg growth. By product innovation we refer to a product which is new, at least in some respects, for the market into which it is introduced.
Consumer packaged goods cpg is an industry term for merchandise that customers use up and replace on a frequent basis. Bruunjensen works with leading companies in the consumer goods and retail industries to make sense of the converging forces of consumer changes, technolo. Demographic shifts and dynamic consumer preferences are forcing companies large and small to adapt quickly if they wish to survive. One of the root causes of the challenge is cpg companies inexorable expansion. Yet their heavy investment in innovation does not necessarily bring heavy payoffs in revenue growth other, lowerspending categories of cpg business enjoy faster growth. For years, consumer goods companies have excelled at product innovation. Nielsens leader of strategic innovation and coauthor of the report rob wengel said all three metrics are difficult to meet, especially when 3,000 products are. In 2020, an uncertain economy serves as a backdrop for cp executives. Product innovation and the pace of change change has never happened this fast before, and it will never be this slow again. Its time for cpg consumer packaged goods companies to adopt the digital. The opportunity for consumer packaged goods research. Mintel gnpd is committed to delivering the highest quality, detailed product data on new products in the food, drink, beauty and personal care, health and hygiene, home care and pet markets. As a result, cpg product lifecycles are getting shorter.
Apply to innovation manager, partnership manager, portfolio manager and more. However, this is changing with the emergence of new players that are digital and agile with better reach to customers. Leading cpg and retail companies are leveraging digital solutions to deliver innovation from concept to consumer with extraordinary speed to delight consumers and drive sustainable business growth. Pdf innovation strategies of new product development npd. Looking globally, emerging markets represent an enormous opportunity for established cpg companies, but cultural preferences, the small percentage of consumers reached by modern retail, and daunting distribution and logistical challenges will. Dec 21, 2017 mature cpg brands are losing market share to younger companies, and those brands are increasingly turning to technology to help them foster innovation and recapture growth. Apply to product manager, associate product manager, category manager and more. Most cpg companies innovate all over the place, from supply chain and manufacturing, to how meetings and projects. The path to agile innovation in a cpg world todays consumer packaged goods cpg manufacturers are under immense pressure to bring products to market faster in order to capitalize on emerging trends and defend against smaller players, among many other reasons.
Stay up to date on the latest trends, innovations, and solutions by joining other consumer products stakeholders to learn and share insights through blogs, discussions, and networking. Reinventing innovation at consumer goods companies nwq. Product lifecylce management plm innovation management. Harvesting the fruits of innovation done right 3 innovation is a catalyst for cpg industry growth innovation invigorates and excites the cpg industry it has long been said that successful innovation is the lifeblood of the cpg industry. Cios at consumer packaged goods cpg companies have a new responsibility. In 2015, the top 25 food and beverage companies generated 45% of category sales in the us but drove just 3% of total category growth from 2011 to 2015, with a compound annual growth rate cagr of. Competition in the cpg sector has always been intense, but food manufacturers now also face an increasingly fragmented retail market, as well as an evolving set of social trends that have changed the landscape of the industry. With a tradition of product innovation, superior engineering and unmatched customer support, we offer the optimal performance solution for your classic, late model or specialized vehicle. Consumer packaged goods cpg are a type of goods consumed every day by the average consumer. The most commonly used types of product innovation are radi cal product innovation and incr emental product innovation atuahene g ima, 2005, hoonsopon and ruenrom, 2012. Graeme wood, journalist consumer behavior is an apt barometer for gauging the pace of change, particularly interaction with the cpg retail industry. The industry must take three key steps to create memorable experiences deeply empathize with consumers, amplify people, and get comfortable with low fidelity, and highspeed experiments.
In all of definition used for innovation, changing or improvement of the. In addition to its welldocumented effects on gene silencing, cytosine methylation is a prominent cause of mutations. The thymine glycosylase mbd4 can bind to the product of. Several cpg categories, including personal products, household products, beverages, and food products, have fallen several rungs in industry rankings of economicprofit. The industry is being shaped by another important trend, too. The cpg innovation challenge is really an opportunity. Find out how sap can help your consumer products business embrace the digital transformation. Here to stay is a more measured approach to new product development and launch. Accelerating digital innovation in consumer packaged goods. Idcs 2015 product innovation survey 63% product innovation requires aligned and integrated capabilities. Draft syllabus cpg product and business innovation studio dsgn49540 formerly known as intersect cpg we require you to block 2 x 3 hour sessions each week plus the additional consumer research times indicated in red below. Product innovations vary in their degree of newness from, on one extreme, products which create entirely new markets e.
Cpg can be contrasted with durable goods dg, an industry term for merchandise that is not consumed or destroyed in use and is. Digital disruptors like amazon have forced more traditional brickandmortar businesses to rise up and adapt in a variety of ways. It has been a tough few years for large consumerpackagedgoods cpg manufacturers in the us market. From street to the strip, circle track to road racing, the brands of the comp performance group touch the lives of performance enthusiasts everywhere. But this value still eludes most large cpg companies. Leaders will have to consider balancing the need to invest in technologies to keep up with increasingly empowered consumers and being financially prudent in their investment strategy. In 2015, the top 25 food and beverage companies generated 45% of category sales in the us but drove just 3% of total category growth from 2011 to 2015, with a. Draft syllabus cpg product and business innovation studio. New product pacesetters building bridges to a growth. Download a pdf version for easier offline reading and sharing with coworkers. Unlocking growth in cpg with ai and advanced analytics 2 putting ai and advanced analytics to work.
This low margin industry is consistently challenged to do more with less but still deliver the same quality necessary to protect their brand. Includes 97 cpg companies with financials for 200420. Cpg product and business innovation studio to apply for enrollmentplease email a brief statement of interest to the instructors including. Improving innovation productivity in the consumer packaged. Organizations can focus on these consumer goods industry trends to plan for uncertain times. Disruption of massmarket product innovation and brand building. For example, asia will overtake the west as the main consumer market, and it will demand new levels of value and innovation. The path to agile innovation in a cpg world nielsen. A link to download the pdf will arrive in your inbox shortly. Consumergoods companies have been at the forefront of digital innovation in commercial areas such as marketing and sales.