Small is better when it comes to innovation

By Susan Birks

- Last updated on GMT

Related tags: Drink innovation network, Marketing, Uk

Small is better when it comes to innovation
Innovation in the UK market is in decline these days but the smaller companies are proving to be the best innovators, often out-doing their larger...

Innovation in the UK market is in decline these days but the smaller companies are proving to be the best innovators, often out-doing their larger competitors despite their larger budgets.

Speaking at last month's Food and Drink Innovation Network seminar on Winning Products, David Jago, director of Mintel's Global New Products Database, said the rate of new brand introductions in the UK fell 15% between 2002 and 2004. The drop is in sharp contrast with the US, where the number of brand introductions grew by 42%.

Jago said it is often the case that there are fewer launches in times of good economic climate, which could explain some of the difference between the two countries.

However many of the product innovations that have hit the market are coming from the smaller manufacturers, such as Innocent Drinks and Gü Puds.

A great believer that it is possible to launch a successful new product on a tight budget, James Averdeick -- founder and md of Gü Puds -- said that his young company had a budget of only £65,000 to start producing premium puds. With no advertising budget to speak of the company used clever sampling and pr campaigns to get the brand noticed. He said that brand quality and bags of product personality did the rest.

The company has just extended its range with Frü Fruity Puds. These include a lemon cheesecake and a raspberry, blackberry and strawberry cheesecake, sold in packs of two.

Delegates also heard that prelaunch market research on what consumers want is no substitute for actually trialing products on shelf.

The problem with consumer research is that if a product is truly innovative consumers don't have anything to reference it against, said Steve Wilson, head of global innovation with Diageo. He had been involved in the initial development of Baileys some 30 years ago and the more recent brand extension -- Baileys Glide.

Wilson said: "We spend millions asking consumers want they want, but they often don't know. What is important is to understand consumer compromises and develop a product that means they no longer have to make that compromise."

Related topics: NPD

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