What does defensible innovation look like in the food & beverage industry?


If you look at the average line extension from a public food or beverage company, this opinion makes total sense. The vast majority of legacy brand product launches are new flavors or formats (drinkable yogurt).

If Brand A launches one of either, their rival can quickly establish an equivalent, potentially neutralizing any brand-to-brand market share problem. Look at the recent hard seltzer craze.

Yet, after working for years in the early-stage end of the industry, I’ve realized how wrong the above marketer was in absolute terms. Defensible innovation is very possible in food and beverage. More importantly, I’ve seen how strategically effective manufacturing-level insulation can be for entrepreneurial brands in their quest for scale.

‘Entrepreneurs who insist on their original formulation generally find themselves building their own facilities’

What do I mean by manufacturing insulation? I mean a formulation that US co-manufacturers cannot make at an industrial scale on their existing lines in North America (and perhaps anywhere in the world).

It’s a formula that requires re-tooling lines, buying specialized equipment, too many humiliating trips to European plants that are years ahead of them, or all three.

Entrepreneurs who insist on their original formulation generally find themselves building their own facilities. Sometimes these early facilities act as pilot plants that eventually convince a major co-man to dedicate a line to them. In other cases, these brands scale entirely on their own. I know of dozens of early-stage brands doing this right now.

‘Self-manufacturing is probably the most​ brilliant insurance policy you can take out when it comes to scaling efficiently’

Self-manufacturing is probably the most​ brilliant insurance policy you can take out when it comes to scaling efficiently. Why? Because it is the best way to eliminate direct competition for years or even entirely (if you can grow exponentially).



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