Will innovation finally add up for consumer-goods companies?

In a changing landscape, companies can better meet consumers’ needs by understanding the true value of innovation.

 
In response to the damage and overnight transformations due to COVID-19, multiple consumer companies have recently announced cutbacks in their innovation pipeline. These announcements may signal a new era for the consumer packaged goods (CPG) sector, one in which the innovation agenda can escape the endless line extensions of the past several years. The lower-value launches that pervaded prepandemic innovation portfolios have failed to drive meaningful growth or return on investment for many CPGs (Exhibit 1). The average first-year sales for new product pacesetters declined by an astonishing 50 percent between 2012 and 2018.

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Πηγή: mckinsey