Digital Solutions Can Boost the CPG Innovation Process by Improving Operational Efficiencies

cpg innovation process
The growth of the CPG market in recent years has been hindered by external pressures. What can companies do spur on the CPG innovation process while maintaining profit margins?
Image source: Flickr CC user Marty Clark

Today’s CPG market faces a major challenge: despite dollar sales of consumer-packaged goods going up, sector growth has actually been flat in recent years. If anything, inflation is the only thing countering the slide in volume sales.1 These difficulties shouldn’t be a surprise. We’re seeing slower than expected economic growth in multiple countries, leading to less consumer spending.

What can CPG companies do in the current environment? After all, pressures fueled by economic slowdowns aren’t the only thing they need to worry about. Increased regulatory measures have led to major changes such as removing key ingredients from popular products. Buyer preferences can shift quickly and unexpectedly, transforming trends into staples. The obvious answer is, of course, innovation. New and interesting products can encourage consumers to spend money on items beyond their usual staple goods, as we’ve observed in the case of seasonal-inspired food flavors. The question, however, is how do we sustain the CPG innovation process in a market that puts the squeeze on profit margins?

Sustaining the CPG Innovation Process Depends on Efficiently Capitalizing on Trends

As history has taught us, some things remain out of our control. CPG firms cannot predict or even anticipate how global issues will affect the economy.2 Instead, their energy is better funneled into other tasks such as identifying potential market opportunities and keeping up the pace of innovation in those categories. Some areas that would benefit from the CPG innovation process include:

  • Healthy-for-you products: Today’s consumers are more likely to take control of their own healthcare. As a result, they’re increasingly interested in products that have health benefits or can address common concerns and ailments. In 2015, health-related CPG products grew by 2.1%.3
  • Beverages: The adventurous palate of the Millennial demographic has fueled the rise of craft beers and flavorful hard sodas. In the coming years, CPG companies that can introduce beverage products with unique, new flavors or healthy benefits will surely attract today’s consumers.
  • Frozen foods: Although this is currently the weakest sector among the various CPG categories, that doesn’t mean firms should turn their attention elsewhere. If anything, its current status suggests that a category revamp is overdue in order to lure consumers back. Whether the answer lays in incorporating authentic, ethnic flavors or moving away from the additives that have fallen out of favor among today’s consumers, there remain ways to breathe new life into these products.

The CPG Innovation Process Depends on Utilizing the Proper Tools

Identifying and developing CPG products to attract and satisfy consumer demand is only part of the answer. If they wish to remain competitive, companies will also need to do so swiftly and efficiently. One way to do that is by streamlining their operational workflows. Despite the technology available to us today, many organizations still rely on outdated procedures that result in disconnected systems. Inefficiencies such as handwritten recordkeeping, manual data transfer, aging in-house systems and poor research management only compound the problem.

But if CPG firms were to adopt an integrated digital solution composed of separate tools that complement each other and work in tandem, those various speedbumps can be removed. Rather than illegible notes in an isolated paper notebook, all formulation-related information can be stored electronically, offering easy access to collaborators. By integrating tools that capture, store, and analyze results, issues arising from transcription errors and misplaced data can be minimized. And most of all, information from past and current experiments can be referenced, thereby decreasing the likelihood of replicating work that has been done before. Supporting operational efficiency through these means ultimately maximizes researchers’ time, encouraging them to focus their efforts on productive tasks such as gleaning insights from formulation testing data or identifying potential CPG candidates to pursue.

Today’s economy may make it harder to convince consumers to part with their money, but that doesn’t mean the task is impossible. The key rests in identifying burgeoning opportunities and developing products at the right time. Making sure that these goals can be accomplished effectively will require the proper tools. BIOVIA offers a digital solution developed to help firms focused on Formulations in Consumer Packaged Goods Industries. Its tools help CPG laboratories transition painlessly from outdated paper-based systems to digital platforms that allow the efficient storage, management, and searching of formulation-related data. By eliminating time-consuming manual processes, the solution increases productivity and minimizes the cost of lagging behind the current high pace of innovation. Is your company interested in boosting operational efficiencies to remain competitive in today’s tight CPG market? Please contact us today to learn more.

  1. “CPG industry sales trends are ‘stagnant’, with dollar sales growth being largely driven by price increases, says IRI,” Jan 22, 2015,
  2. “PepsiCo CEO Indra Nooyi warns “macro challenges” will continue,” February 11, 2016,
  3. “CPG Searching for Growth,” January 26, 2016,

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