Creating Value for Consumer Packaged Goods Customers in the 21st Century
“big” has become “bad” in the food industry public’s “mounting distrust of Big Food” consumers are seeking authentic, genuine food experiences,” They are seeking a social and intimate connection to the founders of food companies. They are seeking realness and authenticity. top 25 U.S. food and beverage companies have lost an equivalent of $18 billion in market share since 2009. “I would think of them like melting icebergs,” he says. “Every year they become a little less relevant.” Entrepreneurs solve problems – they identify unmet needs and create economic value in the form of new innovative goods and services and truly great entrepreneurs innovate across multiple types of innovation Employers all want and ask their employees to be more entrepreneurial! This is not easy. Our lizard brain wants us to be safe secure comfortable, clock in, clock out, collect a cheque and do what is right for our safety Entrepreneurial behaviour is inherently risky. We need to venture from safe shores, take calculated risks, try new things, do things differently. In order for us to release our intrapreneur or entrepreneurial traits we need employers who create a culture of entrepreneurial behaviour in their companies We need to encourage failure fast learning and experiments and tests using live bullets. Rapid prototypes, crude and cheap ways to test theories rather than endless hypothesising and navel gazing. If we stand still we get eaten by the Lions all around us who are running faster that we are in an ever changing ever speeding up technology fuelled environment Remember entrepreneurship isn’t a job – it is a mindset – nurture that mindset and be patient and persistent in your pursuit of entrepreneurial outcomes. The journey never ends! Times are changing fast for your biggest and smallest customers – they need your help to solve their problems and they are willing to pay for value creating solutions. Entrepreneurship is a mindset – not a job – create an entrepreneurial culture in your company and an environment where entrepreneurial behaviour is welcome and rewarded. Think past packaging and product when you think about innovation. Incorporate multiple types of innovation in your next go to market strategy so that you can be truly disruptive and transformation in what you take to market – think Tesla – they are thinking well past electric cars – they are solving problems with integrated product systems and multiple types of innovation. They are not accepting the status quo and they are not standing by and letting bad things happen in our world. Be an agent for positive change in your next innovation.
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Creating Value for Consumer Packaged Goods Customers in the 21st Century
- 1. 1Changing Landscape Melbourne November 2016 Creating Value for FMCG Customers in the 21st Century Dermott Dowling – Managing Director @Creatovate www.creatovate.com.au Creating Value for FMCG Customers in the 21st Century Dermott Dowling – Managing Director @Creatovate www.creatovate.com.au
- 2. 2Changing Landscape Melbourne November 2016 FMCG is changing Fast!FMCG is changing Fast! FMCG customers need your helpFMCG customers need your help Create an entrepreneurial cultureCreate an entrepreneurial culture How many types of innovation are there?How many types of innovation are there? How can you innovate past packaging?How can you innovate past packaging? Use the network multiplier effect – openUse the network multiplier effect – open up and innovate!up and innovate!
- 3. 3Changing Landscape Melbourne November 2016 Consumers shoppingConsumers shopping habitshabits Consumer buyingConsumer buying behaviourbehaviour Customer rangingCustomer ranging strategystrategy PremiumisationPremiumisation Private LabelPrivate Label Shop the peripheryShop the periphery
- 4. 4Changing Landscape Melbourne November 2016 Start with “i” or why?Start with “i” or why? Understand your customers problemsUnderstand your customers problems Rapidly prototype and test solutionsRapidly prototype and test solutions
- 5. 5Changing Landscape Melbourne November 2016
- 6. 6Changing Landscape Melbourne November 2016 Wanting is not enoughWanting is not enough Creating is essentialCreating is essential Behaviour is importantBehaviour is important ThinkThink BIG!BIG! ActAct smallsmall
- 7. 7Changing Landscape Melbourne November 2016 1.1. Profit ModelProfit Model 2.2. NetworkNetwork 3.3. StructureStructure 4.4. ProcessProcess 5.5. Product PerformanceProduct Performance 6.6. Product SystemProduct System 7.7. ServiceService 8.8. ChannelChannel 9.9. BrandBrand 10.10. Customer EngagementCustomer Engagement
- 8. 8Changing Landscape Melbourne November 2016 1950s Mum1950s Mum Mum TodayMum Today
- 9. 9Changing Landscape Melbourne November 2016
- 10. 10Changing Landscape Melbourne November 2016
- 11. 11Changing Landscape Melbourne November 2016 Secondary marketsSecondary markets Supply Chain IntegrationSupply Chain Integration Complementary PartneringComplementary Partnering AlliancesAlliances FranchisingFranchising CoopetitionCoopetition CollaborationCollaboration CrowdfundingCrowdfunding Open InnovationOpen Innovation
- 12. 12Changing Landscape Melbourne November 2016 Big has become bad in FMCGBig has become bad in FMCG Innovators solve customers problemsInnovators solve customers problems Entrepreneurship is a mindsetEntrepreneurship is a mindset There are many ways to innovateThere are many ways to innovate Who are you helping?Who are you helping? How can you network as FPLMA?How can you network as FPLMA?
- 13. 13Changing Landscape Melbourne November 2016 Dermott Dowling Director T: +61 400 040 195 dermott@creatovate.com.au www.creatovate.com.au
Editor's Notes
- “big” has become “bad” in the food industry public’s “mounting distrust of Big Food” consumers are seeking authentic, genuine food experiences,” They are seeking a social and intimate connection to the founders of food companies. They are seeking realness and authenticity. top 25 U.S. food and beverage companies have lost an equivalent of $18 billion in market share since 2009. “I would think of them like melting icebergs,” he says. “Every year they become a little less relevant.”
- Reference: Rafferty’s Garden case study https://creatovate.wordpress.com/2015/02/25/putting-i-first-in-insight-to-innovation/
- Hands up if you think Global Warming is a problem Keep your hands up if you think Government(s) collectively around the world are not doing enough about solving the problem Keep your hands up if you think Entrepreneur(s) will step in and start to make things happen to help us as citizens and community members and help governments solve these problems Entrepreneurs solve problems – they identify unmet needs and create economic value in the form of new innovative goods and services and truly great entrepreneurs innovate across multiple types of innovation
- Employers all want and ask their employees to be more entrepreneurial! This is not easy. Our lizard brain wants us to be safe secure comfortable, clock in, clock out, collect a cheque and do what is right for our safety Entrepreneurial behaviour is inherently risky. We need to venture from safe shores, take calculated risks, try new things, do things differently. In order for us to release our intrapreneur or entrepreneurial traits we need employers who create a culture of entrepreneurial behaviour in their companies We need to encourage failure fast learning and experiments and tests using live bullets. Rapid prototypes, crude and cheap ways to test theories rather than endless hypothesising and navel gazing. If we stand still we get eaten by the Lions all around us who are running faster that we are in an ever changing ever speeding up technology fuelled environment Remember entrepreneurship isn’t a job – it is a mindset – nurture that mindset and be patient and persistent in your pursuit of entrepreneurial outcomes. The journey never ends and it never stops!
- Let us undertake a 5 minute exercise coming up with all the different types of innovation we can think of? I think we can capture them under 10 different types of innovation.
- Is this consumer of today the same as yesterday? Let’s take our typical Mum or Main Grocery Buyer or MGB as we so love to call them in the land of FMCG!
- Is the packaging of yesterday suitable for the mum of today? If not, why did HJ Heinz persist in pushing baby food in glass jars for so long to modern day Mum’s and Dad’s Why did it take the insight of “I” a recently widowed Dad and solo father (ex Chef) to wake up the multinational food companies to the reality their baby food was rubbish in old packaging and not suitable for a child nutrition or a modern busy working Mum or Dad? https://creatovate.wordpress.com/2015/02/25/putting-i-first-in-insight-to-innovation/ Was Heinz not listening to their consumers? Were they not listening to their customers? Were they listening to the wrong feedback from their customers (retailers) and removing cost and nutrition from their products at the expense of the most precious consumers of all – babies? Rafferty’s Garden came out of no-where rapidly prototyping a better package format for busy on the go mums and dads hacking prototypes together from the pantry cutting and taping together a Maggi packet with a toothpaste tube opening and going as far as S. Korea to find a company who could make the right pack format for them. They didn’t stop there they also totally reformatted the food inside the pouch to taste like real food made from real fruit and vege with all the additives and gunk removed. Overnight they took 40% of the baby food market and eventually exited in a trade sale to PZ Cussons for $70m (after the ACCC refused HJ Heinz takeover bid for a business they theoretically should have started themselves if they were listening to their customers and consumers unmet needs)
- Think about where else Raffey's Garden can take their innovation or how else they can grow their business using multiple types of innovation? What other types of innovation could they use to disrupt the incumbents in the baby food market? If they sit back and rely on product and pack alone will they be copied fast and neutralised?
- Let’s take just one type of Innovation #1 – Network Under this one type of innovation there is already another 9 tactics that Rafferty’s Garden can think about to help leverage their innovative business further faster and higher than the competition.
- In summary – remember three things: Times are changing fast for your biggest and smallest customers – they need your help to solve their problems and they are willing to pay for value creating solutions. Entrepreneurship is a mindset – not a job – create an entrepreneurial culture in your company and an environment where entrepreneurial behaviour is welcome and rewarded. Think past packaging and product when you think about innovation. Incorporate multiple types of innovation in your next go to market strategy so that you can be truly disruptive and transformation in what you take to market – think Tesla – they are thinking well past electric cars – they are solving problems with integrated product systems and multiple types of innovation. They are not accepting the status quo and they are not standing by and letting bad things happen in our world. Be an agent for positive change in your next innovation.