Thinking differently about beverage innovation

Spring Design Partners has over 20 years of experience working in the beverage category, and in that time, we have participated in the industry’s effort to “innovate.” Much of innovation within the beverage category is focused on new products or packaging. Brands challenge themselves to develop the next hot flavor or to create a new vision for a glass bottle or aluminum can. Unfortunately, we increasingly see this approach to innovation falling short of making an impact. New substrates and glass shapes, and even flavors, are not going to move the needle in the context of the new economy and the emerging demands of a new consumer.

We are going through a time of incredible change in the consumer landscape. The retail dynamic is changing with the emergence of e-commerce, where the ways consumers engage with brands are being redefined. No longer is the “shelf” the primary point of purchase, making the challenge of achieving impact and creating a brand block obsolete. The consumer is changing with the emergence of Gen Z who introduce a whole new set of values and expectations that are unique to their older Millennial siblings. What was once considered premium is now considered standard. Consumers expect disruption to bring greater value through experience. Because of these shifts, brands are being challenged to think differently about how they create value and differentiate.

Thinking beyond the liquid

Innovation for the beverage category needs to extend beyond the liquid and the packaging to move the needle in this new economy. Innovation needs to be about defining new go-to market strategies that engage consumers faster and in more relevant and personalized ways. While brands need to be disruptive to create growth, they need to act with purpose and innovate in ways that are rooted in the brand and its authentic origins. Brands need to create a path, not follow one, in order to truly engage the beverage consumer of today and tomorrow, but how?

We have wrestled with the question of how to innovate many times, and have seen many of our clients struggle to think differently.  To identify solutions, we like to look outside of the category. What have other industries done to innovate beyond the product? How have other categories addressed changes in consumer behavior?

Imagine if the beverage industry took a lesson from the fashion industry. Retail fashion has been facing its own turmoil when it comes to consumer behaviors and expectations. Iconic anchors of fashion retail are closing their doors, consumers are shopping online, and the traditional retail fashion transaction is shifting from purchase to rent. Many brands are looking to their product to stay afloat, but failing to really change to stem the tide. Yet, some are succeeding with new and disruptive innovation that has nothing to do with the product.

A new approach to consumer engagement.

One of the most successful responses to this change is Zara. Zara has succeeded where others have failed by adopting a new business model that is built on agility and flexibility to deliver a new form of consumer engagement. Zara has expanded from 4 seasons of new items annually, to 12, creating a constant cycle of consumer engagement and re-engagement with new products hitting the shelf every week. Lead time from design to store has been reduced to 7 days, allowing Zara the flexibility to react quicker and be more relevant. They can deliver more relevance, faster and more efficiently in the way consumers want to consumer it.

Imagine if we could deliver beverage brand experiences that are fresh, relevant and responsive by getting new packaging to the shelf faster? We’ve seen the success of seasonal and limited edition packaging where the product does not change but the packaging creates a whole new brand experience. Lead time for these initiatives tends to be long (1 year plus). How can we innovate to allow for quicker reaction to shifts in consumer trends and cultural moments immediately within months versus a year?

Packaging as a consumer experience.

While we certainly don’t want to denigrate the importance of production of packaging, what we are really talking about is just a change of graphics that creates an entirely new experience for the consumer. The challenging part in this scenario is determining the message that is conveyed through the graphics so that it is relevant to the brand and the consumer. Brands need to be able to relevantly react in the moment and be confident in making proactive decisions to move quickly. How do you do this?

We’ve identified three ways that can help speed the concept development process and be more relevant and get to shelf quicker.

#1 – Over commit to your brand
Clarity and commitment to your brand is key. Without a clear understanding of who your brand is, what is important to it and what it is willing to sacrifice is paramount in being able to create relevant and differentiated new brand experiences.

#2 – Listen to your consumer and be close to the ground
Social media has given brands a great window into consumer behaviors, attitudes, and trends as they happen in real time. Using social media to listen and collect actionable data so that you can react quickly when opportunity strikes provides a great advantage.

#3 – Invite your consumer into the process
New approaches to innovation require new approaches to understanding your consumer and creating experiences for them. Traditionally, the consumer has been removed from the innovation process, apart from validation. In the emerging consumer-centric world this approach is a bit antiquated. To react quicker and be more immediately relevant, brands need to engage consumers in the development process. Employing consumer co-creation to develop new ideas and concepts is one way of collaborating firsthand with your consumer.

It’s time to think differently about innovation.

The bar is being raised by the consumer and the demands of retail, when it comes to new product development, checking off the boxes of consumer trends is not going to cut it. Innovation for the beverage category needs to be beyond the liquid and the packaging to move the needle. Considering new go-to market strategies that engage consumers faster and with greater relevance, and using packaging design to create new consumer experiences, are just a few ways to think differently about innovation.

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