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Incubation

THE SITUATION: The right innovation strategy is vital to compete in today’s fast-paced retail landscape, but building the right approach is not simple. Big CPG manufacturers are spending upwards of $10 B on innovation, yet 75% of CPG new products fail to reach $7.5 M in the first year. Global reach and resources, large-scale investment and traditional Big CPG tactics are no longer creating the necessary advantages. Instead, there is misalignment between what new brands are delivering and what is needed to activate against consumer trends and build authentic customer relationships.

The rise of smaller 'Challenger' brands highlights the value in thinking differently about how to grow and evaluate a new brand or product. Large CPG companies are losing share to smaller, newer firms. The mass ‘push’ to build demand via mainstream distribution is no longer enough to win against brands that have built an authentic connection with consumers and customers before gaining broader distribution.

OUR SOLUTION: We work with clients to create an Incubator business model for emerging brands, permitting larger corporations to think and act like ‘Challenger’ brand companies and remove the misalignment that exists between traditional ways of working and what is needed to nurture emerging brands.

The development of a separate Incubator model ensures that an emerging brand or product team can focus on being the ‘feet on the ground’ to build a presence with customers and consumers and keep up with insights, trends, and unmet needs within that community. Remaining untethered to BIgCo policies also allows emerging brand teams more agility and freedom to test, learn, and grow differently vs. established brands. Successful incubators build their own ‘accelerator’ environment, experiment without BigCo consequences, and create a distinct culture that enables stronger brand identity and customer relationships.

END BENEFIT: A brand incubator strategy or business model serves as an ongoing innovation pipeline, providing an environment to grow newly created brands, house and nurture acquired brands, and fuel portfolio expansion.

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