Most of what passes for innovation in FMCG is little more than range extension wrapped in a new label. Retailers dominate, chasing predictability, risk aversion and quarterly returns. Success is measured by volume and incremental margin gains, much of which is sourced from suppliers.
Much of the blame for being ‘boring’ comes from the supplier base who are simply giving their customers what they demand, failing to see the trap of ‘short-termism’ foised on them. They confuse safety and compliance for strategy. The result over time has been supermarket shelves groaning under the weight of house brands and endless near-identical products.
Real innovation has vanished.
After decades in the trenches, one truth stands out: the products that change markets don’t just add SKUs, they create new categories.
Every memorable FMCG success I can think of didn’t simply introduce something new. It carved out a new space in the shopper’s mind, and on retailers shelves.
That’s not luck. It’s vision, timing, and courage.
Steve Jobs said you can always spot the pioneers, they are the ones with arrows in their backs.
He was right.
If he’d looked at FMCG, he’d have seen that most companies never leave the safety of camp. They mistake caution for wisdom, and substitute another range extension for innovation.
Forty years ago at Cerebos, we had a shot at a game-changer — the first muesli bar. We had everything: the brand, the manufacturing muscle, and the shelf space. We even had the forecast that showed it would work. What we lacked was courage. My sales forecasts for a completely unknown product that was a category creator were way too conservative, failing to reach the Cerebos ROI hurdles, so the project was shelved. A year later Uncle Toby’s launched, and sold a year of my sales forecasts in a month, and created a new category. Our caution cost us the market.
Not long after we test marketed a cereal product we called ‘Light and Crunchy’ in South Australia, again under the Cerola brand. We did not make the same mistake we made with Meusli bars, we made a different one. We badly underestimated the reaction of Kelloggs to an incursion into their patch. They launched a copy-cat product, ‘Just right’ with an ad spend and promotional backing we could not match, so got blown away.
Licking our wounds, we test marketed in Victoria the first pasta sauce into the market. We had the Fountain brand, dominant in tomato and flavoured sauces, Australians were consuming increasing amounts of pasta, but making the sauce themselves. It seemed like a great category generation opportunity. The test failed, for another reason: we bungled the timing of the distribution and modest support package that had been allocated by a sceptical and risk averse MD. A year later, Masterfoods came out with ‘Alora’ pasta sauce since renamed ‘Dolmio’, and created a category.
The pattern is always the same: the timid wait for proof, the bold create it.
If you want to win in FMCG, create a category. That takes foresight, guts, and money, always more than you think.
But it also takes strategic clarity and the commitment to choose and argue strongly for a different future that is not an extension of the present.
There are many more stories of relevance in my long history, all of which contain lessons, for those who choose to look for them.
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