How CPGs Like Bic, Kraft Heinz, and Kimberly-Clark Are Writing a New Playbook

Product innovation isn't just a game-changer; it's the key to staying ahead in a retail landscape that never stops evolving. Successful consumer goods companies are constantly tweaking their approach to new product development and introduction (NPDI) to streamline and elevate these processes and take advantage of technical and creative innovation. As a result, they’re reaping the rewards. According to Boston Consulting Group (BCG), 20% of CPGs have used innovation to accelerate growth, enhance operations, and sustain a competitive edge, achieving “scaling” or “future-built” levels. While BCG’s definition of innovation is much broader than simply NPDI, it does include the key component of accelerating growth beyond core offerings through new products. It’s companies such as Bic, Kraft Heinz, Unilever, Nike, and Kimberly-Clark that are adopting these innovation-driven strategies. Learn how they are focusing on consumer-centric approaches, external and internal collaboration, agile software development, and more to achieve standout product innovation results.“These CPG front-runners have made a sustained commitment to innovation-related talent and disciplines, expanded ambitions and efforts beyond their core offerings, and continually experimented with new tools and techniques,” said BCG of the 20%. The remaining 80% are lagging behind, rated as “stagnating” or “emerging” in innovation, and experiencing low EBIT growth and five-year total shareholder returns, said the company. Follow these steps to learn the techniques and technologies leveraged by innovation leaders to avoid becoming stagnant and introduce transformational new products and NPDI strategies. 1. Find new ways to keep the consumer at the centerConsumer insight is valuable at every step of development and introduction, and CPG brands are pushing forward on new ways to access and adapt these insights along the entire pipeline. Bic is among those embracing a customer-centric approach. The brand is mining a combination of in-depth qualitative consumer research, real-time social listening, product reviews, trend data, and retail data to gain a holistic picture of market opportunity. This informs the development process and helps the brand quickly react to category trends and behaviors, Karen Schwartz, VP of Bic's brand portfolio and innovation segment, tells CGT. Then, on the introduction side, consumer insights are helping Bic to optimize campaigns, communications, and products. This approach leaves behind the days of pages-long, written briefs in favor of more visual and conceptual approaches to ideation. “We really try to tap into breakthrough communication,” says Schwartz. “We need to make sure there's some sort of hook or cultural relevance for consumers that they can latch on to — or a deep-seated consumer insight that really resonates. We're really keeping the consumer at the center of everything that we do.”2. Adopting more Agile operationsTraditional NPDI approaches are very sequential, Dr. Kumar Sarangee, associate professor of marketing at Santa Clara University and director of its Sustainable Business Institute, tells CGT. “You gather some data, analyze, you start building some products, then you start testing. So the pace of innovation slows down,” he says, adding that customer input is not taken at every stage of the process in traditional NPDI.Agile software development concepts like scrums, kanban, and sprints are helping consumer goods companies bring flexibility, teamwork, and speed to NPDI processes. Agile principles replace some aspects of traditional stage-gate models, leveraging cross-functional teams, parallel development activities, and customer input throughout the end-to-end process. While Agile project management has been trickling into NPDI for some time, firms need to keep pushing forward with its concepts, Sarangee says. Kraft Heinz, for example, is expanding its Agile@Scale pod structure, which groups about a dozen employees into teams focused on high-priority opportunities to more quickly scale product innovation. The multi-functional pods tap Agile principles to operate more nimbly, including test-and-learns, minimum viable products, and innovative feedback collection strategies. 3. Increase collaboration, both externally and internallyBringing a diversity of skills, knowledge, and points of view into the NPDI process helps to enrich innovation, streamline processes, and ensure that products meet consumer needs. At Bic, cross-discipline collaboration including customer insight, product, marketing, and technical teams is enhancing the brand’s ability to break through innovation barriers, pressure-test ideas, and ensure the voice of the consumer is centered — even when those requests are challenging to fulfill. “We're working on a project right now that's really challenging our technical teams. Because when we did the testing, that's what the consumer really gravitates to in the product design,” Schwartz explains. Bic also leverages external partnerships in everything from AI to human psychology to kids’ creativity to inform the NPDI process and ensure its products are intuitive for consumers. “That internal and external combination is so important for us because, without it, you end up with the same ideas over and over again,” Schwartz says.Unilever and Samsung are adopting this approach with a data partnership. Historically, washing machines and detergent NPDI have been developed completely separately. Sharing data enables them to use consumer behavior data and emerging laundry machine technology to more directly connect consumer behaviors with new product development. 4. Get comfortable with more advanced technologies Consumer goods innovation leaders are also tapping digitalization and other tech advancements to elevate and automate NPDI processes. Nike, for example, has incorporated AI, rapid prototyping, and 4D motion capture into its new product processes. These technologies help predict how its products will react to physical force, such as allowing designers to create a sole that contours to a runner’s foot to increase springiness and energy, and then test the results. Generative AI is also transforming NPDI processes. Swiss beverage company Vivi Kola, for example, used ChatGPT and several other tools to design a new soda product in just two days. Unilever is also continuing to discover new ways to leverage other forms of AI, big data, automation, and partnerships to accelerate scientific discovery. Its “in silico” computer simulations have helped develop new formulations of Knorr and Hellmann’s products. The brand is partnering with a biotech company that has mapped the human microbiome to identify ingredients that appear to support communication between key gut bacteria and the brain. CPGs could also take a page from other industries including automotive, aerospace, and defense, which are pushing ahead on NPDI using digital twins. They credit digital twins with cutting total development times by 20-50% and helping to drive 3-5% higher sales, according to McKinsey. While most consumer goods companies lack the deep R&D budgets of industry behemoths, increasingly accessible AI-fueled technology supported by richer data and advanced analytics techniques is helping to level the playing field. 5. Leverage KPIs to drive rapid changeAn essential step in moving quickly toward what’s working and abandoning false starts, an Agile practice, is measuring progress at every step of the NPDI process. Tracking metrics including time-to-market, cost of development, product quality, consumer satisfaction, and sales performance post-launch provides clear visibility into the efficiency and success of the NPD process, allowing for continuous improvement. Data visualization tools help illustrate KPIs in real time. As it reworked its approach to innovation, Kimberly-Clark realized that in addition to measuring the number of projects actually going into market, it also needed to measure the growth impact of each of those projects.“Getting that right view on the net incremental growth that we're delivering through our pipeline has completely transitioned the way we think about the value of our pipeline,” Jeannette Chantalat, global head of Kimberly-Clark’s innovation and sustainability accelerator, previously told CGT. It has also helped the brand establish a virtuous cycle around looking for growth. “We've learned that with that right KPI, you can start having those deeper conversations early on in the funnel.” Bic’s NPDI KPIs are built around its desirability, feasibility, viability (DFV) framework — to which the brand adds a fourth pillar, sustainability — to quickly evaluate products in the proof of concept stage as well as through development and market performance. In fact, metrics related to the sustainability of the materials, processing, packaging, and transport of goods are critical resources in demonstrating a true commitment to sustainability, says Sarangee. In a world where consumers, particularly younger ones, are highly attuned to the environmental impact of their purchases and skeptical of greenwashing, collecting and publishing data around sustainability through the NPDI process and beyond can make a real difference, he says. Metrics are also key in keeping development partnerships aligned.“Show those metrics in your financial reports. Align them with financial metrics,” Sarangee advises, along with incorporating sustainability into branding. “Sustainability has to be ingrained in the DNA of the organization.”Retooling NPDI for a Fast-Moving FutureResearch from Mintel found that as of July 2024, just 35% of global CPG launches across the food, drink, household, health, beauty, personal care, and pet care segments were truly new products, while 65% were “renovations” of current products — the slowest industry NPDI rate since at least 1996. The pressure is on to transform outdated new product development and introduction processes into rapid, efficient, consumer-aware engines of innovation. Consumer goods innovation leaders are showing the way, infusing customer-centricity, cross-functional teams, Agile concepts, KPIs, and the latest technologies to continually refine and mature their NPDI processes. Successfully adopting new tools and processes has helped Bic pull forward its launch time on some projects by over a year. “That speaks to the testament of these methodologies,” says Schwartz. “Not only is that great for the team because they see quick wins and their products coming to market faster, but it's good for the company because then we can get them out there before our competition and really capitalize on what we're seeing out there.”

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