Innovation in CPG: The 5 Step Process

By Emma Steele

Jump to Highlight's 24 CPG innovation solutions at the bottom of this post!

Launching new products is hard. Innovation today is more challenging than ever, in a rapidly changing landscape of consumer needs, saturated product categories, and shifting consumer attitudes and behaviors.

Timelines are faster than ever, too. What used to take a year (or years!) in product development is now happening on impossibly fast timelines–within mere months.

It’s clear that in order to innovate quickly and effectively, brands need reliable consumer data at lightning speeds.

At its most basic, the product innovation process goes like this:

Step 1: Identify consumer needs

Call them what you will–unmet needs, jobs to be done, white space opportunities–some gaps in the market are pinpointed as fertile territory for a new product.

Step 2: Develop concepts

This is when the (multi)million-dollar idea is born. A “long list” of product ideas kick-starts the product development process.

Step 3: Test & refine your concepts

This is where that long list becomes a shorter list, through some series of “stage gates” or tests, typically through quantitative surveys gauging purchase intent (“Would you pick this up on a shelf?”), and evolves into a formal product concept.

(Learn more about agile product development versus the stage gate process.)

Step 4: Develop physical product(s)

The mechanics and operations of actually producing a physical product come into play, and products (benchtop samples, prototypes, protocepts) are manufactured for early testing.

Highlight 24 Solutions Noodles

Did you know? Highlight’s IHUT platform offers 24 solutions for the CPG innovation process. Jump to the bottom of the page to read the details.

Step 5: Test and refine your product(s)

The research and development process involves asking a lot of questions and conducting lots of testing to get answers: formulation testing, sensory testing, efficacy/performance testing, pack testing, and more are executed through a variety of quantitative, qualitative, and hybrid approaches.

Tests like these are necessary to answer important questions like:

I’ve done all this concept testing–does the product I’ve manufactured actually live up to its claims?
When it comes down to it, do my target consumers like it? Can I win new consumers without alienating my loyal consumers? Why or why not?
How can we refine the product formulation, brand, and messaging to stand out on shelf and differentiate from my competitors?
How are consumers actually using or consuming my product, in the context of their everyday lives?
How can I start to think about product research and product testing? What sorts of quantitative and qualitative research approaches can I take? How do I think about recruitment of respondents?
Does our sustainability value proposition drive purchase intent? How likely are shoppers to recommend my product?
Are shoppers at certain retailers more inclined to my product than others?

Let’s focus on Step 5

You’ve developed an innovative, exciting new product and are ready to get it in front of consumers. Before launching in full force, however, you want to get some key questions answered to put your best product forward. You only get one chance to make a first impression. Make sure it’s the right one.

Brands employ all sorts of methods to get these consumer insights and key questions answered: they poll their team or colleagues across the company. They tap their networks of friends and family.

But these tactics can only get you so far. Brands need to ensure they are going in with eyes wide open. When your startup capital or R&D and advertising budgets are at stake, you can’t rely on feedback that may be biased or less representative of your target market. You need reliable data from your target market.

This is where formalized product testing comes in. In-home usage tests (also known as IHUTs) are one of the best methodologies for this kind of research to understand how consumers honestly react to and use a product in the organic environment of their own homes.

The IHUT methodology gives you a powerful tool to gather both qualitative and qualitative data on your product, as early as possible, to help maximize the success of your product launch and your company.

What industries and categories should use IHUT to test their products?

IHUT has broad applications across consumer goods and beyond.

Food and beverage products
Beer, wine, and other ready-to-drink bevalc products
Personal care, beauty, and wellness products
Products for children
Apparel (wear testing)
Pet food and supplies
Household goods like cleaning supplies
Durables such as water bottles, headphones, and fitness trackers

While in-context consumer testing is crucial for a wide range of products, methodologies may differ depending on the category.

Learn all about the different methods of product testing here.

Learn more about Highlight’s 24 solutions for CPG product innovation

The majority of Highlight’s customers leverage a tailored combination of these solutions to get the data they need for wherever they currently fall within the CPG product innovation process.

Pre-launch product innovation solutions:

Category Assessor: Build a foundation of knowledge of current perceptions within the category, consumer expectations, habits, practices, usage behaviors and more–including understanding where competitors are over- and under-delivering today.

Agile Ethnography: A longitudinal study of your brand’s core consumer segments gives your innovation teams the robust qualitative feedback they need to understand current usage occasions and where there are gaps to fill.

Innovation Co-Creator: Brands can generate consumer-led innovation by understanding ideal products, innovation wishlists, whitespace ideas, and opportunities to differentiate against in-market products.

Sensory Evaluator: Leverage Highlight’s sensory templates to collect a mix of qualitative and quantitative feedback on your product (blinded or branded) across JAR metrics (Just About Right scales that measure the appropriateness of the level of a specific attribute) and hedonic measures (“Dislike Extremely” to “Like Extremely” scale).

Prototype Tester: Place early benchtop samples with articulate consumers for performance understanding and deep-dive feedback on product prototypes in early development of final optimization stages–with possibility to include photo/video to understand product usage.

Feature Prioritizer: A quantitative, in-context feature evaluation leveraging ranking and “q-sort questions” (a systematic study of participant viewpoints) gives brands an understanding of the product’s most important features and attributes.

Packaging Evaluator: A mixed-methodology of quantitative and qualitative questions reveals initial impressions, likes, dislikes, performance against key action standards, and opportunities for improvement.

Iterative Messaging Co-Creator: Build claims that resonate in the context of your product experience. Lead with a digital MaxDiff test to identify the most powerful claims followed by a physical product evaluation to build a claims mix that best brings the product to life.

Messaging Generator: Drive consumer-led claims generation with qualitative creative exercises and projective techniques based on the physical product experience.

Messaging Sorter: Identify which claims best capture the physical product experience with a MaxDiff style claims evaluation to provide messaging recommendations based on product usage.

Concept Testing: Use a digital quantitative metric evaluation focused on relative performance of concepts against product KPIs.

Proposition Evaluator: Evaluate your proposition and/or your product-concept fit with a mixed-methodology approach. See which product best delivers to expectations, and understand if the concept and/or messaging accurately reflects the physical product experience.

Claims Substantiator: Determine which substantiated claims to use on pack or in your messaging with quantitative testing in adherence with ASTM Compliance Guidelines for Sensory Claims Substantiation–and test against a competitor or control.

Highlight Greenlight: Are you ready for launch? Use a quantitative in-context product test based on in-market competitive benchmarks.

Post-launch product innovation solutions:

In-Market Diagnosis: Understand what’s driving in-market performance today with a mixed methodology qualitative and quantitative study of frustrations, delights, and opportunities for optimization. For some products, a longitudinal, organic-use survey focused on why your product is/is not habit-forming or integrated into natural routine may also be appropriate.

Course-Corrector: Drive consumer-led optimization with an in-context qualitative co-creation focused on providing product, packaging, and messaging innovation guidelines.

Occasion Generator: Identify opportunities for occasion expansion and new use cases, with an in-depth longitudinal study focused on placing your product in-home with core consumer segments to identify and measure usage occasions for new ways to leverage, position, and/or market your product.

Benchmark Builder: Get the data retailers love to see. Leverage a competitive in-context evaluation to gauge performance of each competitor against key metrics and understand the head-to-head comparison across comparable taste profiles or claims.

Product Refresher: Identify which new product change prototype to move into further development with a quantitative evaluation of the relative performance of new options against the current in-market product.

Positioning Optimizer: Pinpoint where to refine on-pack and/or in-market messaging with an in-context qualitative study that uses creative exercises and projective techniques based on the physical product experience.

Alienation Assessor: Keep your loyal customers and win new ones with an in-context quantitative alienation evaluation to understand how packaging or formula update(s) may impact purchase intent.

Line Extender: Reach new consumers with an iterative, digital-physical evaluation (TURF analysis, or “total unduplicated reach and frequency”) to identify leading combinations of flavors and SKUs on shelf paired with a physical product evaluation of the sensorial and physical product experience.

Expansion Explorer: Explore the possibility of expanding into a new or adjacent space with a qualitative exploration of current perceptions of the category, likes, dislikes, desires, and unmet needs in the space today, physical product feedback of current leaders in the space, and ideation around how to best enter the space.

Retail Readiness: Build a powerful narrative for upcoming retailer sell-in conversations with a hybrid quantitative and qualitative study of the physical product experience.

Learn more about the best option for your brand(s) by booking a demo today.