Some of the cleverest recent ideas in food have come from upstarts. Plum Organics helped pioneer baby-food pouches with spouts; a fifth of American baby food is now squirted rather than spoon-fed. Keurig, which makes single-serving coffee brewers, outsells all other coffee-makers in North America. Innocent, a British firm, gave smoothies a lift by showing them off in clear bottles. Big packaged-food companies are timid innovators, fiddling with flavour or cautiously extending their existing product lines, says Thilo Wrede of Jefferies, an investment bank. That is costing them customers, some of whom are defecting to fresher foods.
Giants often deal with the pesky innovators by buying them. Campbell, famous mainly for tinned soup, bought Plum this year; Coca-Cola acquired Innocent. But they may be getting better at coming up with their own ideas. Of 14,000 consumer-goods launches between 2008 and 2011, 48 were “breakthrough products”, meaning that they were distinctive, had sales of at least $50m in their first year and held on to at least 90% of that in their second. Most came from big firms, according to Nielsen (though the criteria are loose enough to include Oikos, the Chobani copycat).
Companies have been cutting the number of new-product launches by 7-10% a year to focus on potential blockbusters. They have become better at understanding “how consumers live their lives”, which improves the odds of success, says Mr Wengel. Chobani, which does its own fly-on-the-wall consumer research, considers that to be one of its strong points.
