How can you bring fresh ways of innovation into a traditional sector like bakery? Successful new product development often happens by incremental innovation. In fact 95% of new products fail (source: Masschallenge.org), and incremental innovation allows innovation without excessive risk. Such an incremental innovation strategy in a traditional sector like bakery has 3 goals.
First, it allows a company to grow sales and profits of existing products by slightly modifying functionality. Second, it strengthens the company's current position and ensures it is future-proof. And third, incremental innovation offers efficiency gains, helping to stabilize existing business.
Bread and sweet goods are hot. Bread consistently scores well with Generation Z, even before the pandemic. Young consumers enjoy baked items throughout the day, especially for breakfast. ABA (the Amercian Baker’s Association) and GenHQ (The Center for Generational Kinetics) surveyed more than 1800 millennials in 2019 and found that 75% had bought bread within the past few days and 60% had bought sweet goods in the past week (Source: Bakery & Snacks).
Less is more, not only in terms of portion sizes, but also in terms of retail choices. If we look at portion sizes, Gen Z loves bread and sweet baked goods more than we think, but they would like to see smaller portions and less waste. Freshness is key. If we look at retail choices, we see that the Covid-crisis has pushed some items off the supermarket shelves. “We all did great with less,” said John Ross, CEO of IGA (Independent Grocery Retailers) in July 2020, “so now is the time to think about how we move forward.” During the pandemic, consumers had the reflex to rely on trusted brands. The retail trend went to selling fewer SKUs, while still offering shoppers enough choice. Line extensions of trusted brands clearly have a step ahead here.
Bakery brands are in an excellent position to innovate in the post-pandemic era. With the renewed interest in home baking and in indulgent treats, the context is beneficial for new launches. Even if shelf space in retail becomes more limited and if the trend goes towards less SKU’s, trusted brands are in a good position to innovate, by flipping innovation incrementally: repurposing formats, flavours and eating moments are the way to go.
We created a guide that will help you to innovate in baked goods using real fruit inclusions, without the manufacturing challenges.