B2B PR Agency insights – the FMCG innovation deficit

Written by Simpatico PR

Posted on 2024-10-02

Simpatico PR’s B2B PR agency thought-leadership series Ahead of the Curve offers a brief digest of some of the newest thinking in marketing, technology and creativity that our team is working with on behalf of our clients.

Have FMCG brands forgotten how to innovate? Or are they tying themselves in knots with brand heritage and values, which are strangling innovative product ideas?

Or are they too bound in by commercial guide rails set by manufacturing and logistical management? Either way, the UK’s £134bn FMCG industry seems to be running out of product innovation ideas.

Our work B2B PR agency work with FMCG innovation consultancy The Forge has seen us delve into the issue affecting FMCG innovation and new product development (NPD). 

We have looked at the impact of the creator economy on more established brands and FMCG companies. We have asked whether the way in which NPD is done needs to change, we’ve looked at shrinkflation and how FMCG brands can find alternative routes to drive growth without damaging trust.

When was the last Cadbury's Cream Egg-style launch?

You can see the problem every time you enter a supermarket or convenience store - shelves are full versions or varieties of a core product whether that’s a novelty flavour, or a product re-formulated into bite-size formats for occasions. There is nothing necessarily wrong with these tweaks to existing formulas, but when was the last Lynx, when was the last Cadbury’s Cream Egg?

And that’s a big issue as supermarket own-label penetration nears 40% or more of the market in the UK. And, the creator economy is snapping at the heals of FMCG brands in a wide variety of categories from health and beauty to burgers and beverages, coming from seemingly no-where to create huge buzz and massive sales.

The Forge as looked at these issues in a series of articles for the Grocer and other retail and marketing trade media. In a column for The Grocer titled “How FMCG can learn from YouTuber success stories.

The piece looked at what brands can learn from YouTuber MrBeast’s Feastables chocolate bars which generated more than $10m in revenues in a few months, and YouTubers Logan Paul and KSI who made more than $1.2bn in sales with their Prime Hydration drinks. [Excerpt]

“Influencers and creators build brand desirability through the intensity of their relationships with audiences, which involve continual two-way communication and interaction. The individual creator or creator team may be talking to millions of people, but to the teenage boy in his bedroom, it feels personal.

“There is an opportunity for brands to be more creative and focus on comms that create a dialogue, feel personal and bring audiences into a relationship that is fun to be part of. This requires a razor-sharp focus on exactly who that audience is.”

The own label FMCG challenge

A follow-up piece for The Grocer titled “Six reasons own label is set to dominate NPD and three issues holding brands back”, looked at the advantages own label products launched by retailers have over traditional FMCG brands.

The article concluded that there are six reasons why retailers are set to dominate NPD. [Excerpt]

“Retailers aren’t manufacturers. They aren’t constrained by the need to build production capacity to make new products, which means they can jump onto new trends quickly.

“Their category teams have invested in consumer data capacity, analysis and AI, helping them spot trends across categories and providing a detailed picture of where, how and when innovations can succeed.

“The supplier infrastructure generates a steady stream of inspiring new concepts and products, ready to commission, launch and scale.”

Shrinkflation alternatives

In another article, this time for FMCG CEO magazine, The Forge explored the controversial issue of shrinkflation which has hit the headlines in the national press on regular occasions and is firmly on the radar of the Competition and Markets Authority (CMA), looking at what FMCG brands could do instead.

The piece argued, [excerpt] “brands could take the radical step of being open and transparent with their consumers. Go ahead and shrink the product if you need to, but make it clear on the packaging. You might just find that acting with integrity will be better for the brand in the long term.

“Alternatively, offer different options. Rather than just, say, reducing the olive oil in your spread from 21% to 10% and pretending that the product tastes the same, how about creating a new, cheaper version and letting people who love the original make the choice to pay a little more for it.”

Our next area of B2B thought leadership is sustainability marketing and how brands should adapt their approach to achieving sustainable growth. The team at The Forge are asking whether sustainability marketing is dead in the wake of the backlash against greenwashing and difficulties faced in making sustainability commercially viable in the FMCG space.

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