New and reformulated products are vital to the food and drink manufacturing industry. In fact, according to Kantar (Source: Kantar BrandZ, 2022), brands that are perceived as the most innovative have historically grown seven times faster than their competitors.
However, successfully launching new products requires skill, commitment and resources, something that can be a particular challenge for SMEs who may not have the benefit of a dedicated new product development team. Understandably, new product development is often pushed down the list of priorities behind the everyday worries running of a business.
When new product development is eventually considered, the temptation might be to simply launch the bright idea you came up with in the shower, and which you’re convinced is the next best thing since sliced bread. This could be a very costly mistake. According to Kantar, 61% of new grocery product launches are either defunct or in decline by the second year after launch (Source: Kantar, 2022).
So, it’s vital that you adopt a structured approach to new product development. One of the most well-known methods is the Stage Gate process. This sequential approach to product development sees each step in the project (e.g. scoping, business case, recipe development, testing and launch) separated by decision points called “gates”. These gates serve as vital checkpoints where project progress is assessed, and a decision can be made whether to move forward or halt proceedings.
Using the Stage Gate method has a number of benefits that help to increase the likelihood of launching a successful new product.
Firstly, this structured approach provides a clear roadmap for product development. Breaking the project down into manageable stages simplifies complexity and makes it easier to successfully see a project through to completion.
Secondly, using data and assessment at each gate encourages better decision-making. This starts right from the beginning of the project where market data should be interrogated to question whether there really is consumer demand for your product. Research from Nielsen shows that innovations which satisfy a core consumer need are two to three times more successful in driving consumer purchase and surviving on shelf (Source: Nielsen, 2023).
Thirdly, the Stage Gate approach can encourage better collaboration amongst cross-functional teams as each member has defined roles and responsibilities.
Finally, and crucially, the Stage Gate process forces difficult decisions to be made rather than charging ahead with pet projects. Identifying and assessing potential project risks at each gate review helps to mitigate them. Where the risks outweigh the benefits, a project can be paused or cancelled without adding further cost to the business.
The next time your company is planning on developing a new product, adopting a structured approach like the Stage Gate process would be very sensible. It could make the difference between launching the next big thing instead of a flop.
This autumn and winter, ZERO2FIVE Food Industry Centre is running a series of workshops on new product development, including the Stage Gate process. For eligible Welsh food and drink companies, attendance can be part or fully funded by the Welsh Government’s HELIX Programme.
More information about these workshops can be found here.
Ed Gilbert
Marketing Officer
ZERO2FIVE Food Industry Centre
