Innovation: desired and feared in equal measure by senior executives in businesses round the globe. On the one hand, the school of ‘innovate or die’ – typical in fast moving consumer goods or high tech environments – the mindset, the belief, that ‘you’re only as good as your last success’. Such is the level of competition amongst companies, many live in fear that if they don’t innovate, if they don’t slice the salami of consumer needs and understand deeper, more penetrating insights about the countless ways we live our lives, then their business will be in mortal danger. Famously, the 3M Corporation, notable for inventing Post-It notes¹ tasked itself with ‘The 30% Challenge’ – generating 30% of worldwide sales from products launched in the last 4 years. That’s worth a brief pause to consider. 30% of worldwide sales from products less than 4 years old. I haven’t worked there. I don’t know if it’s a goal that is regularly achieved (but I believe they still use it as a corporate objective), but let me tell you: that is, to quote Jim Collins², a ‘big, hairy, audacious goal’. Glance through the business pages on a weekly basis; read the Annual Reports – for most businesses, ‘innovation’ and ‘lifeblood’ are symbiotically linked.
Yet on the other hand, there’s the rather unfashionable, whisper-it-lest-you-are-heard, view. That innovation isn’t essential. It’s a school of thought I’m increasingly persuaded by – particularly when it comes to beer.
Let’s interrogate this a little more. Start with consumers, drinkers, customer – call your fellow human beings what you will. People who buy stuff. In the last couple of years, I’ve done research across a dozen, more, different categories of product – bread, beer, wine, spirits, coffee, tea, paper products, banking, pizzas, weight loss, soft drinks, hotels, restaurants – you name it. Here’s the thing – the linking thread. In 90% cases, the people working in the business are convinced that they must have new. Innovation in product, in service, in experience, in something. But in every case, every case, consumers don’t see the need. The reaction by the client is never, therefore, to walk away and spend their time and money on something else, but rather to find a need. The hunt for insights commences, driving motivations behind why we do what we do, and why we spend. And inevitably, it’s ‘slicing the salami’ – the supposed need is ever so thin, ever so see-through, ever so…false. And of course, it’s perpetuated by consultancies and agencies – walk away from food on the table? Best not.
But of course, we do want new. We say we don’t, but we behave ‘we do’. We love our iPads and Galaxies; we like our Tivo boxes, we like folding bikes, naïve smoothies and gooey puds. Heck, we even seem to like Irish & Belgian ciders.
Beer hats on sale now. Go on, you know you want one.
And what struck me about beer is the difference between what the brewers (typically the big boys) ‘say’, and how the brewers (typically the little boys) ‘behave’. Because I don’t think beer needs innovation. By that I mean, I don’t think in the beer market consumers want innovation. As far as I can see beer isn’t broken. What they do want is discovery (or re discovery) of new flavours, styles, places; authenticity; connectedness to memories or good times. On reflection, it seems no surprise that what links successes in the western markets is a perception of smallness. The two decade explosion of North American craft beer; the rising tide of cask beer revolution in the UK from over 1000 small brewers again (cask is now back in growth in the UK); the craft movement in Australia and New Zealand; speciality brands in France, the Low Countries, Scandinavia, Italy. And by the way – this doesn’t mean the big players are not involved – Molson in Canada owns, and has left alone both Creemore Springs and Granville Island; ABI owns stake in a number of US craft businesses – but rather it’s a ‘skunkworks’ approach outside big business that is the success formula: have idea – try in market – refine – build. It’s an attitude about understanding what the drinker wants through, well, going out drinking, rather than relying on large amounts of market analysis and research that has the higher strike rate. From someone who works in innovation and research it’s an uncomfortable thing to admit; but on the other, there’s something exciting about understanding intuition, about seeing beers that were clearly hunches be successful. Now that would be worth understanding.
¹By the way, have you seen the price of Post-Its nowadays? Pant-wettingly expensive.
²Jim Collins, Jerry Porras ‘Built to Last’ (1994)
© David Preston, Beer Tinted Spectacles, October 2012