Innovation lessons from the Great Recession

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CHICAGO – Lessons from the 2008 recession Coronovirus (COVID-19) may help companies shape their innovation strategy in the wake of the epidemic.

According to Information Resources Inc. (IRI) ‘s 2008–2010 new product pacesetter report, key themes emerging during the Great Recession include premiumization, larger pack sizes, and brand expansion.

“People think in a recession that people aren’t going to spend money, but it’s a trade in dollars,” said Larry Levine, executive vice president, market and shopkeeper intelligence at IRI. “Maybe I used to go to dinner in the restaurant and spend $ 70 or $ 80 on dinner for the family, but now I make a frozen meal that is a premium product relative to my competitive set in the frozen aisle is. It could be more expensive, but the mental trade was going to restaurants or feeding people at home. “

High-quality penetration from Congera Brands, Inc., including Mary Callender’s Home-Style Creations and Healthy Choice All Natural. The K-Cup, which began its explosion as a recession, similarly provided an opportunity to create a café experience in the kitchen.

Multi-serving products, including Bertoli oven baked food, Stauffer Easy Express and P.F. A decline in the size of Chang’s family’s food, also saw an increase during the recession.

“They allowed people to serve a large family or on some occasions,” Mr. Levine said. “That extended usage was really important for a lot of consumers.”

Popular during the Great CPG, large CPGs struggled with new products in high penetration categories but were successful in pushing brands into adjacent categories or expanding offerings. Examples include the Kellogg Company’s specialty snack bars, the new Gatorade and Powerade offerings from PepsiCo, Inc. and The Coca-Cola Company and Starbuck Corp’s VIA Instant Coffee.

2020 recession

Large pack sizes and restaurant-quality experiences have already emerged as key themes in 2020, and concerns about the epidemic will sustain the underlying shift toward eating at home.

“In our weekly tracking study, 65% of Americans say they are going to adopt a ‘weight-and-view’ attitude about going back to the restaurant,” Mr. Levine said. “Of that 65%, a significant portion said they would not be leaving for a few months, let alone a few weeks.”

A new challenge is that consumers are also spending less time in stores. More than a third of shoppers said they had stopped looking for new products in recent months, and a quarter reported spending less time in stores.

“They’re coming into a store and out of the mindset,” Mr. Levine said. “How do you ensure that you have the right marketing message, because they might miss you coming down the aisle? It’s going to create new ways to win shoppers’ hearts and minds through new products.”

“It’s going to create new ways to win shoppers’ hearts and minds to break through new products.” – Larry Levine, IRI

Focusing on the characteristics that matter most to consumers, such as self-care, will be important to pursue.

“This is an environment that has got two-way devils,” Mr. Levine said. “We’ve got coronaviruses on one end, and we’ve got a financial collapse on the other end. Manufacturers have an opportunity to make better products that may be a supplement you need.

Opportunities also exist for products that cater to mental and emotional well-being.

“We’ve seen an increase in CBD sales over the last few months,” Mr. Levin said. “People may be looking for CBD as an option to make it through very stressful times, and it can be easy to access online.”

A cause for optimism

According to IRI, small and emerging brands were more successful than medium and large companies during the Great Recession, despite new product pacesetters being low.

Products from pure players focused on high growth categories performed best.

An example is Chobani, which saw its first Greek yogurt products hit shelves in 2007.

Almond Breeze Almond Milk“When Chobani stepped into the market, it was $ 1.40 per serving, while the industry was about $ 1,” Mr. Levine said. “Then people saw the wealth of added protein and new texture, and they were willing to pay more for it.”

Other successful new products launched during the Great Recession include multigrain pretzels and crackers from Snyder’s Lance, Osam Breeze Almond Milk and Drink Mix from Blue Diamond and Ocean Go On with Cranz bottled juice.

“A lot of small companies and brands that we saw in 2010 are more powerful here today,” Mr. Levine said. “They position themselves well for continued survival or acquisition, and I think there is a light at the end of the tunnel for some of these smaller manufacturers who may be worried right now. They can look back and see what others did during the last recession. They were able to survive and come relatively well. “


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Author: Usama Younus

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