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-New Sevendots study reveals that innovation is the underleveraged growth driver in the CPG industry
AMSTERDAM, March 18, 2024 /PRNewswire/ -- A new study by Sevendots, a global leader in CPG strategies, sheds light on the untapped potential of innovation investment as a driving and underutilized force for growth within the industry of CPG. This seminal research, part of the Sevendots Growth Series, is based on extensive input from over 100 brand owners around the world, a comprehensive review of existing literature, and a deep dive into numerous case studies to provide a solid framework to improve the return on investment (ROI) of innovation efforts.
The study reveals a key insight: innovation remains an underutilized activity for many CPG industry players, showing a worrying trend of declining momentum. This is evidenced by a significant decrease in the number of genuine innovation launches.
More than half of brand owners identify a lack of strategic thinking as the key barrier to fully harnessing innovation
The underlying reasons are multifaceted, including limited budgets due to lack of confidence in the return on investment compared to other activities, the absence of a visionary and systematic approach, and inadequate measurement practices. Consequently, a staggering 78% of brand owners believe that current innovation management within the CPG sector is only somewhat effective or not at all effective. Furthermore, the research highlights that 54% of brand owners identify the absence of strategic thinking and a clear framework as the main barriers to achieving disruptive innovation.
However, there could be a silver lining: several studies suggest that brands perceived as highly innovative grow much faster than others, while companies that prioritize innovation also report superior short-term EBIT growth and total return to shareholders. long-term shareholders.
CPG Companies Require a Clear Framework for Innovation Success
The study calls for a paradigm shift in the way CPG companies approach innovation. It advocates for a strategy that transcends traditional product innovation and category definitions, urging companies to develop and implement a clear and effective path for innovation that balances short-term achievements with long-term goals.
"In a rapidly evolving market, returning innovation to the center of strategic agendas is not just an option but a necessity," said Andrea Bielli, Managing Partner at Sevendots. "Our findings underscore the immense growth potential for CPG companies willing to rethink their approach to innovation, leveraging it as a powerful driver for long-term growth, differentiation and success."
About Sevendots Growth Series
Sevendots Growth Series is a comprehensive initiative that reflects the collective insights of over 500 CPG brand owners around the world, aimed at driving transformation and fostering growth within the industry.
About Sevendots
Sevendots is a leading consultancy specializing in the development of industrial strategies and transformative initiatives for the CPG sector. With a rich history of empowering brands to achieve sustainable growth, Sevendots remains at the forefront of industry innovation and thought leadership.
For more information about the study, visit www.sevendots.com.
Media Contact:Christina CarèHead of Content and MarketingSevendots B.V.christina.care@sevendots.com 39 348 78 088 02 www.sevendots.com
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