Creating value through innovation
Consultant Graham Godfrey discusses the use of specialist ingredient manufacturers to innovate and why this doesn’t have to be as stressful as it sounds.
Those of you who read my articles will be well aware I believe innovation is a vital element in the success of a business. This particularly applies to product innovation where the ability to interest and excite the customer constantly will add value to a business.
However, when you are running a small or medium sized business, innovation can seem like a real challenge. Ideas are rarely that hard to come by, which is probably what got you started in the first place and you have by now (hopefully) a feel for your market, ways of understanding your consumers’ needs and a sound base for turning effort into value. What you do want to find are ways of innovating and refreshing your products without it costing you excessive money and time.
Barriers to innovation include knowing where to source things you can’t or don’t know how to make, or simply not knowing what is available out there. Even large companies now outsource many of the novel, value adding components of their products simply because they see investing in making them (possibly for a short time) as a poor strategy in terms of available resources when there are firms out there that can do so at a lower cost. They also see the B2B companies as sources of innovation outside their own horizon.
Suppliers
There are really two types of companies who can supply innovative products and ideas to extend and develop your business and importantly, they are generally experienced and professional enough to supply products to high technical and regulatory standards.
Firstly, there are the specialist B2B manufacturers who produce base ingredients on a huge scale. This particularly applies to chocolate and compound coatings – but also to other materials like jams, caramels and fudges – where suppliers have a huge range of different products produced to high standards. Unless you have a really good reason for producing internally, these must be the ‘go to’ source for subtle changes and innovative product bases.
There are of course businesses which believe they can produce something ‘better’ than these large suppliers with a ‘unique story’ and this may occasionally be the case, but for many small to medium sized confectionery businesses the base chocolate is a carrier of their idea rather than the idea itself.
There is also no need to take a third party chocolate or other product and use it as such. Blending together third party products to give a unique product of your own is a relatively easy approach to establishing your own distinctive flavour – perhaps a small amount of a defined origin dark chocolate or cocoa mass added to a proprietary milk chocolate for example, giving you the opportunity not only to differentiate your brand, but also to add a message to the branding and packaging.
While I have discussed chocolate, there are a host of large scale specialist ingredient manufacturers out there supplying a massive range of sugars, starches, fondants, caramels, fruit pastes and so on – a little searching around can come up with all sorts of ideas and solve all sorts of problems.
There are also companies which can source and supply an almost limitless range of innovative items which can be harnessed within an existing range. The benefits these companies bring include knowing what can be made and where to source it, in addition to control of quality and tailoring items to your exact requirements. They can also go out and source new items from their wide range of specialist suppliers.
Customer need
All of this needs to be aligned with consumer need, but using these companies eliminates the need for time consuming searches for novel ingredients. It will also avoid the need to negotiate and arrange supply, specification and labelling details with a number of different providers. Visiting this sort of supplier can and almost certainly will, spark ideas for innovation, so it is worth building up a relationship with some of these businesses. In addition to simply supplying items, most of them will have the capability of producing at least hand samples for evaluation.
There are lots of opportunities out there which can be harnessed to existing processes. It ‘only’ requires some creative thinking and a relatively modest amount of time and effort if third party resources are used wisely.
Creating value through innovation is something small businesses can use effectively to drive profitability and growth as they have the creativity, flexibility and quick response to consumer need often lacking in larger businesses.
