Updated: Apr 26, 2021
The consumer and the consumer landscape are constantly evolving and in order to keep up you need more impactful, transformational innovation in foodservice. I’m not talking about the next big flavor, I’m talking about game-changing ideas that open new markets and solve new problems. Are you investing enough in transformational innovation?
It’s been 10 years since we’ve had a “home run”
When working in brands, I would occasionally hear from either leadership or franchisees the complaint that it has been a number of years since we’ve had a “home run” product. This is a common complaint of innovation teams, and there are two sides to it. What I like about the challenge is that it tasks the group to think big, and the question “are we thinking big enough” is a question you should be asking yourself whether you are a brand or a supplier to big brands. The other side of that argument is that you always have to keep your core guest happy with more incremental offerings that are safer for them and safer for the business to launch with a higher rate of success.
Part of the reason you may only get a “home run” product every 10 years is that your tolerance for risk is low, and you want ideas that go through your “incremental results” process to produce transformational results. If you expect that, you won’t get a home run very often!
Why you need to categorize your innovation
Best in class companies have a mix of types of innovation. They spend the time to categorize their innovation so they don’t fall into the trap of only offering incremental ideas. You can come up with whatever categories you like, however I really like the following categories.
Classification of innovation
· Incremental: This category is simply step change. Think that next flavor LTO or seasonal menu items. Perhaps it’s a small improvement in a core product that keeps your offering competitive. This will likely be the majority of innovation because the business results and success are easier to pick, and the go-to-market path fits within existing procedures and equipment.
· Next generation: Think of this as a brand expansion. Perhaps it’s adding an entirely new platform that adds a layer of sales. A good example here might be the rise of cold brew coffee. Cold brew became the next generation of iced coffee, but it was easier to make and didn’t require expensive equipment. Additionally, the messaging was simple and differentiated allowing more customers to easily dip their toes into the growing cold coffee category. This should be your next largest category of innovation.
· Transformational: This is an area I would bet you’re not doing enough work in. For a true definition, these are “new to world” products. That’s a bit hard to come by in food, so let’s just call these game changing products and platforms. You could argue that adding an entirely new daypart would be transformational, or perhaps it is a new ordering method like a digital app. Entirely new product categories like plant based versions of dairy or meat might end up being transformational depending on your brand. Even a signature product that is so impactful it drives business and changes the industry could be transformational (think of the Popeye’s chicken sandwich and how that started the chicken wars!).
Your brand type or customer base might shift the percentages a bit, however the big takeaway is that most companies are underinvesting in transformational innovation. I would say that many companies I get to be involved with are doing less than 10% transformational innovation, when in reality they should be going after upwards of 25%.
What you can do now
Whether you are a big brand or a supplier, the first thing you can do is to look at your innovation pipeline and create categorizations that work for you. Then, quantify how much of your pipeline fits into each category and see if you’re investing enough in transformational, game changing ideas. Evaluate yourself versus your competitors, and be sure to look at emerging concept competitors as well!
Evolve your process! You may only have one go-to-market process, and perhaps that works for incremental innovation but it stymies game changing ideas. You could even consider a separate team that uses a fast track innovation process working independently of your traditional team.
Launch an internal program to share this new way of thinking outward to the company and invite in new ideas. Share this new categorization with your leadership and your innovation committees and report out at regular intervals. Challenge yourself, your team, and your cross functional partners responsible for innovation to get out of the incremental mindset.
So, to recap, more transformational innovation can help equal more frequent home runs. The alternative is hoping for game changing ideas within an incremental process. That just won’t work very often!