*Adam note: This blog post is written and sponsored by TraceGains (with some pointers from me). They’re a pretty cool company so definitively check them out.

Food and beverage executives live in a never-ending battle for shelf space, pressuring them to bring new products to market faster. This makes sense given that more than half of their revenue comes from products released within the last five years, according to a 2017 McKinsey report.

If only it were so easy to launch new products. All the odds appear to be stacked against new products. Consider:

• More than 15,000 new products hit store shelves every year. That’s a lot of competition.
• Estimates vary, but all agree that anywhere between 70 percent and 95 percent of new product launches fail.
• Companies spend, on average, about two years developing every new product. That’s a huge investment in something that statistically will fail.

What makes it so hard to break through the crowd? It doesn’t help that, according to Harvard Business Review, “American families, on average, repeatedly buy the same 150 items, which constitute as much as 85 percent of their household needs.” The first hurdle for CPG companies, then, is to launch something that can snap consumers out of their routine.

Aside from failing to sway stubborn consumers, CPG companies make plenty of unforced errors when developing new products.

Failure to Market

The most obvious mistake companies make when coming up with a new product is failing to prepare for the actual launch. So much of a company’s resources are poured into research and development that when it comes time to go to market, not enough is spent on marketing to support it.

This can easily be addressed with better communication across departments throughout the NPD process. A single source of data accessible to all departments can help eliminate silos that crop up in nearly every organization.

Formula Inflexibility

R&D departments are all about precision, which makes sense. But formulation can also be designed to have some breathing room. Measurements shouldn’t be too precise, as to hamper experimentation. Building some room for flexibility in the formulation process also allows for mistakes on the line during production, preventing costly slowdowns, especially when it comes time to ramp up production.

Clean label products can make this easier, since there are fewer ingredients to worry about.

Unreasonable Claims

This could also be called managing expectations. To break out of the pack, it’s easy to fall into the trap of promising the moon when all you’ve got is a hunk of cheese.

The Ford Edsel, one of the most infamous failures in American business, is a classic example of this. The company marketed the car as revolutionary, but when consumers got behind the wheel, they discovered it was simply unreliable – a cardinal sin given its price tag.

Again, transparency between departments can prevent marketing campaigns from promising more than a new product can deliver.

Inefficient Documentation

Paper documents, and even Excel spreadsheets, are so 1990s. Nostalgia might be hot in the entertainment business, but it’s no way to run a company.

Digital documentation, including a central repository for supplier data, can help track ingredients while also assist with communication with other stakeholders in the NPD process.

Launch strategy

While it’s important to consider how your company will handle the ramp-up stage, it’s equally critical to exercise caution, especially for smaller manufacturers and start-ups.

If you’re looking to launch 100 boxes, you probably can’t afford an entire pallet of protein powder. Most suppliers will ask for a minimum order most new manufacturers can’t afford.

Companies need to understand how they’re going to launch, or you can put your entire supply chain at risk. Think of the scale of ingredients.

A robust SaaS system can help companies streamline communication, foster greater collaboration between departments, and prevent mistakes at all stages of the process. TraceGains can help.