Large Companies Driving Disruptive Innovation?

Ford Motor Company recently announced a 5-year plan to develop and begin mass-producing fully autonomous cars.   As someone who has a 25 mile commute each way to work, enjoys a happy hour every now and then, and has 4 future teenage “drivers,” it’s easy to immediately think about the benefits of self-driving cars.  Ride-sharing through the likes of Uber has already started to transform the automobile transportation industry, and technology players like Google are trying to enter the autonomous vehicle market.

The auto industry, especially American manufacturers, developed a reputation for being traditionalist and stuck in their ways.  That tendency obviously caught up with them a decade ago when fuel efficiency and quality concerns caused them to lose significant shares, and they have been working hard to regain and maintain their edge ever since.  It’s easy to see how new autonomous technology—the lessening of our love-affair with cars, seeing them more as a Point A to Point B commodity, etc.—would be seen as a threat to future profits, but instead of doubling up on lobbyist spending,  Ford has decided to learn from past mistakes and embrace the shifting landscape by evolving to stay both relevant and profitable.

Their commitment to mass produce vehicles for ride-sharing purpose is fascinating because it not only shows a commitment to implementing innovative technology, but also to an innovative transportation system.  By investing in developing both fronts, Ford acknowledges how autonomous cars will likely lead to fewer cars being needed (and therefore being sold), but still affirms that transportation will continue to be needed, and that there are other ways to profit within the transportation industry.  Remember when IBM used to make computers?  Now, they are heavy investors in this next phase of innovation; by doubling their Silicon Valley presence and continued investments, they are acquiring the right pieces to be on the front-end of an evolving auto industry.

The food industry is another place where large companies are evolving to stay relevant and embracing disruptive innovation.  General Mills’ 301 team has gotten a fair amount of press for its evolution into an investment company that—rather than being an internal innovation company—is finding small innovative start-ups, giving them much needed capital, and sharing its expertise in distribution, production, research, etc. to help them leverage the passion and innovation that got them started and help them succeed in the areas where they struggle most.

The key ingredient to both of these examples if for key decision makers at large companies having the …let’s call it Fordsight…to see what their industry is evolving in a disruptive way, and then having the humility to accept the change and make whatever adjustments are needed to stay relevant and profitable.

-Luke Cahill, Managing Principal

The Future is Now, and It’s Focusing on Food

Shoppers paying more attention to what is in their food is not a new revelation; it’s a trend that has been growing in popularity for quite some time and has been influential in any number of products that have been rolled out recently. Target Corp. is taking this want for transparency a step farther in their new, multi-year collaboration with design firm IDEO and MIT’s Media Lab. In January 2016, they collaboratively launched the Food + Future coLab which will explore urban farming, food transparency and authenticity, and health.

Recently launched in a test store at a Fenway Target in Boston, the coLab-created Good & Gather initiative aims to capitalize on transparency by reimagining traditional food labels. Instead of listing ingredients on the back of packaging as they have been traditionally, they are being displayed on the front. The second concept allows consumers to scan produce and learn information about it in real time. As this technology develops, it will be interesting to see how food companies will react to a transparency they may not have been prepared for. How will products and packaging adapt to a food space that goes beyond the characteristics that currently aid in shopability? Research will be imperative as our interaction with food becomes more and more entwined with technological advances. Though we are heading into territories that are new and largely unexplored, the opportunity for innovation will be an exciting development to watch.

-Tyler McGruder, Research Assistant

Saving Cereal

Sales in the cereal category have fallen, and companies are trying to gain intuition around how to hold onto their current consumers and bring back some of those they have lost. In general, people are eating breakfast differently. They’re saving the first meal of the day for work or are reaching for yogurt, breakfast sandwiches, or bars. But for Milliennials, the access to variety isn’t what is changing their breakfast habits. The need for convenience may be what is preventing them from eating cereal for breakfast. For Millennials, it seems that washing a bowl is too much work.

So, is this attitude truly born out of laziness and, if so, where does it come from? Roberto A. Ferdman suggests that this mindset is more the result of the inherent busyness of households with two working adults.  Fuller family schedules allow for less time to cook and clean. Even more so, when most of these adults were expected to do chores as a child, only 28% of them ask the same of their children. Rather than changing their lifestyles to fit their food choices, Millennials are looking for foods that fit their lifestyles. With this in mind, focusing on convenience will be important, especially for industries like cereal that are trying to adjust to the changing times.

However, as companies address rising trends and falling sales, it is important to keep the “why” at the forefront when reinventing, revitalizing, or creating products.  When crafting solutions, it is imperative to first understand the root of the problem.  For instance, are Millennials too lazy to wash a dirty bowl or are they transitioning to other options due to health reasons, better benefits from other products, or something else? A product developed solely on the hypothesis that Millennials would use cereal if it was convenient might miss an opportunity to pivot on an alternate reason for the drop in usage. Companies need to understand this consumer mindset before launching new products and packaging; bringing consumer perspectives to life will help our clients to uncover the real needs of their consumers.

-Beth Wogen, Associate Project Director

Introducing Brewed Insight Sessions by REAL Insight!

As a company specializing in in-context research, the lack of authenticity tied with traditional facility studies has often made them a less-than-ideal methodology. Especially now, as Millennials become the favorite targeted audience, the synthetic rapport of old-fashioned focus groups can be a barrier to truly understanding this target consumer.  They are harder to find, less willing to jump through the proverbial hoops, and are more affected by sterility.

With a desire for a more authentic, empathy-building environment (and inspired by our NE Minneapolis location), we recently fielded a project that overcame many of those challenges with focus groups and promptly tagged it a Brewed Insight Session. With a study structure created and facilitated by our team, and a taproom provided by a nearby microbrewery, we successfully introduced this new and promising methodology into our repertoire of in-context research.

Brewed Insight Sessions deliver strongly on understanding who a consumer is. (*Note, it isn’t  intended to be a solution for business questions better answered by observing buying or usage behavior.) In a relaxed, less-formal setting, consumers are more comfortable engaging in real conversations and honest sharing. This casual atmosphere is essential to create and maintain; therefore the facilitator/moderator must be someone who is able to keep the laidback vibe alive. Empathy and intuition building are imperative these days, and the environment created at a Brewed insight Session is designed specifically with these goals in mind. 

The time and activity breakdown can be structured a number of different ways, based on the specific project objectives, but our recommended method begins with a lead facilitator guiding the group through a few topics and then having time for small group breakouts with the client team. As there is no two-way mirror to hide behind, training and managing the client team is very important. However, the benefit is the team being able to directly interact with the consumers. Another point to consider is, though a little alcohol can help with the mood and authenticity of the session, it is important to have a plan for how to make sure things don’t get too loose. Our facilitators and moderators are effective at providing this plan, as well as offering any additional team training that may be required.

The Twin Cities, like many cities nationwide, have felt the impact of the brewery and distillery explosion. With such a large pool of locations available (and the consistent availability of these spaces early in the week), there is an abundance of options for fielding this type of research. If you are interested in learning more about Brewed Insight Sessions or want to partner on a similar type of project, please feel free to reach out to me at

-Luke Cahill, Managing Principal

Consumers Continue to Court Convenience

If you haven’t heard of it yet, Instacart is an app-based service that allows customers to order groceries from a number of different retailers in their area with just a few taps of the finger. After filling a digital cart, users then arrange for home delivery at a time convenient to them. While available for larger metropolitan areas, those outside of the delivery range have been left without access to the service. However, in March 2016, Whole Foods and Instacart announced an expanded partnership with the goal of increasing the number of Whole Foods stores with dedicated Instacart shoppers up to 50% by the end of 2016 while also expanding into areas that have yet to experience the convenience.

As shoppers move towards buying less and less in stores, it will be fascinating to see how CPG companies will react to these changes. Products and their packages are often optimized to draw consumer interest, whether it’s a new product hoping to be purchased or a tried and true favorite hoping to maintain its popularity. But oftentimes, these optimizations are made to attract shoppers standing in front of a shelf. As Instacart and similar apps become more and more popular, it will be interesting to see how studies change when objectives turn from “how much shelf appeal does this product have” to “how much app-appeal does this product have?”

In a world with Amazon Prime and the even speedier PrimeNow (in some markets) shoppers are clearly enamored with the convenience of fast delivery, especially if it’s same day. With the popularity of online shopping on the rise, in-context research will have to take on a whole new lens in order to remain on top of how shoppers choose products. If people are making their purchases through an app, wouldn’t it make sense that, in time, research on these purchases will be done in the same way? With our extensive experience in online and mobile methodologies, it will be interesting to see how much more these methods will come into play, and how they will evolve as customers shop more and more from their couch.

-Jennifer Carrasco, Associate Project Director

Your Macaroni Isn’t What You Think It Is

In a surprising announcement, Kraft has revealed that their most loyal customers have been purchasing a new formula of the “Blue Box” macaroni and cheese they’ve loved for decades. The biggest revelation from this announcement? Barely anyone has noticed.

History has shown that when a new formula for a favorite product is unveiled, there’s often a backlash that may or may not be warranted (see: New Coke). When Kraft Heinz decided to remove the artificial preservatives and dyes from one of their top-selling products, they decided to keep it relatively quiet. They made a small announcement and shortly after, customers were complaining that “they thought the mac and cheese tasted different when, in reality, they were still eating the previous version.” So after that initial announcement, KH didn’t say anything further about the new formula’s roll-out.

The new formula has been on shelves since December, and unless a shopper has been diligent about reading labels, the change has gone unnoticed until now, with Kraft Heinz’s launch of a campaign announcing the change. Time will tell how consumers will react to this news as the change becomes better known, but as it stands, shoppers have been eating the new formula with no complaint.

What is so fascinating here is that while consumers are requesting less artificial ingredients in their foods, companies are concerned that these same shoppers won’t be satisfied with the new products. Just knowing that a formula is “new” is enough for consumers to project a different taste, texture, and eating experience onto a product that may not even be there. As CPG companies start to consider reformulating their products to include more natural ingredients, perhaps they will follow the macaroni and cheese model and keep quiet about it as consumers acclimate to the new product. Shoppers want to consume products that are better for them; it just might be even better if they don’t know about it.

-Sarah Morrison, Research Associate

Müller and Missed Opportunities

Four to five years ago, PepsiCo and Müller partnered to take the US  yogurt category by storm.  Müller, the name in yogurt throughout much of Europe, was bringing their sidecar cup design across the pond and using PepsiCo’s US retail expertise to steal share from an already hostile and dynamically changing yogurt category. Fast forward to present day, and it’s clear that Müller yogurt never really took off; the yogurt lost much of its distribution, and the partnership with PepsiCo ultimately disbanded.  This is fascinating to me because it represents what we are seeing all over the marketplace: consumers aren’t buying the products that are pushed on them but, rather, are pulling from the options that satisfy them.

In the past, one of the largest hurdles for a successful launch was being able to gain distribution and get products on the shelf.  That has changed.  As consumers become more open to, and at times prefer, smaller brands, retailers have started to stock those more on their shelves. They are seeking food that is perceived as “real” and more “natural” and, let’s be honest, Müller looked like a yogurt from a large company. It lacked the simplicity and health cues that yogurts such as Chobani, Noosa, and Fage have made both trendy and successful. It lacked the health equities to compete in such an on-trend and health-driven category.

Müller didn’t come up short in the US because it failed to introduce something new to the marketplace. It came up short because it didn’t understand the consumer desires in the category and failed to combine their features with the desired benefits. Chobani ran with the sidecar cup and introduced their Flips line, which more closely aligned with the “natural” equities consumers were seeking. Noosa offered a taste-first fruit option that better appealed to what shoppers were looking for. These companies took what Müller was offering and simply did a better job and are succeeding as a result.

What, now, is the implication for big businesses?  Competitive intelligence isn’t as important as consumer intelligence in today’s climate.  Instead of focusing just on the brands and companies next to you, it is critical to look at where demand is heading and to get there first. In trend-forward categories like yogurt, complacency will be costly.

-Luke Cahill, Managing Principal

Perceiving is Believing

When it comes to product ingredients, thinking about how consumers perceive them can be more beneficial than solely focusing on “proven” health benefits. In his article Identifying Health Ingredients, Keith Nunes discusses how Canadean, a market research company, conducted a global survey asking consumers to evaluate 100 common ingredients. Respondents were asked to rank ingredients –including grains, fruits, vitamins, minerals, and sweeteners—based on their perceived benefits. In the United States, whole grains, blueberries, green tea, almonds, garlic, olive oil, brown rice, potassium, pomegranate, and Greek yogurt encompassed the top ten. Canadean speculated that Americans ranked whole grains first due to the positioning and language used to talk about them. Potassium ranked high in the US, but not in other countries, which the article attributes to the language used around coconut water in particular. Looking to the future of trending “healthy” ingredients, matcha was noted to be an upcoming potential fad. Matcha, a powdered version of green tea leaves, claims strong health benefits but is relatively unknown by most consumers at this point. As with any new ingredient trend, if consumers’ knowledge around this ingredient is low, then products containing it will have a lower perceived health benefit than the product may actually deliver.

As ingredient decks change and the desire for food transparency grows, it will be important to understand what ingredients consumers perceive as healthier and which are worth the added cost.  While the survey mentioned in this article is interesting, it lacks the essential component of why? Why do consumers perceive these ingredients as healthier than others? Why do the benefits of some ingredients seem apparent while others are more confusing? While the results are a good starting point, without answering the “whys,” companies are left with educated assumptions instead of the complete picture. For example, although green tea was ranked highly, it is not clear what benefit it communicates to consumers.  By answering why consumers see green tea as healthy, a company will have a much better foothold regarding if/how to implement these products.

Qualitative research is important because it helps to answer the “why?” and fills in the complete picture of consumer perceptions and desires. In providing these “whys”, companies are then able to make informed, strategic changes to their products/packaging that best communicate their benefits. It also allows for strategic cost/benefit analysis of adding newer or trending ingredients (i.e. are consumers willing to pay more for certain ingredients due to their perceived health benefits?). Having a conversation with consumers about products on shelf builds intuition about their current brands and products. That conversation is also essential in teasing out consumers’ perceptions, and, most importantly, fills in the “why?” behind those perceptions.

-Beth Wogen, Research Associate/Bilingual Coordinator

Online on the Rise

The internet is a ubiquitous presence in our everyday lives that demands more and more of our attention over previous, traditional media sources. Jayson DeMers predicts that since our eyes are constantly glued to screens, businesses and advertisers will begin to maximize the ways in which they reach consumers by targeting marketing strategies specifically to the way we consume our content.

The Top 7 Online Marketing Trends That Will Dominate 2016

DeMers suggests that:

  • Video ads will start dominating the internet, including the Google search engine. Though a huge opportunity for online marketing, their current low prices will likely go up.
  • Apps will start to replace websites at a rising rate, even for those with mobile-optimized sites. Businesses need to develop and update apps to make life for the consumer easy, and there will be more opportunity for app-based marketing.
  • Mobile usage will completely dominate desktop usage. Google has already begun optimizing searches to prioritize mobile friendly sites.
  • As digital assistants like Siri become more and more user friendly, businesses need to make sure their information is easily accessible as consumers begin to rely more and more on voice assistants over traditional search engines.
  • Virtual reality and wearable technology devices will start to emerge and gain popularity, offering new mediums for online advertising and changing marketing tactics.

Technology is quickly advancing and always changing. Trying to imagine what will come next is nearly impossible, but businesses and marketers need to keep up with the trends if they have a chance at competing with other companies and appealing to the masses. There will be a day in the not-so-distant future when online and mobile advertising tops television commercials. We recently ran a study where a number of participants mentioned seeing a television commercial that led them to purchase the particular product in question. As it were, the ad was never aired on TV, but instead as an advertisement on a streaming platform.  Already, the media lines of advertising are blurring, and while  online ads are still relatively inexpensive for the moment, they have huge profit potential in the future.

Moving forward, marketers need to consider research into how and where their target markets are getting their information.  A brilliant TV commercial is rendered ineffective if their audience is streaming reruns on Netflix. By staying on top of these trends, researchers can develop methodologies that reach consumers on their preferred avenues and will be able to better form relevant insights in regards to project objectives.

-Jennifer Carrasco, Associate Project Director

Does “Selling Out” Mean What It Used To?

In the world of business, the acquisition of smaller companies by larger corporate entities is commonplace. While often a smart business move for both parties, the risk of alienating customers and losing a brand’s founding identity is a strong concern. When Kellogg’s acquired Kashi in 2000, Kashi was allowed its autonomy for a short while and sales soared until it’s parent company began to encroach on their values, of which the brand’s fans were fervent. Sales declined sharply upon the increased intervention, and the brand is still recovering, in spite of returning to a more independent coexistence with Kellogg’s. Yet, Kashi is just one drop in the corporate merger landscape.

David Gelles paints a different picture in his article “How the Social Mission of Ben & Jerry’s Survived Being Gobbled Up,” which explains the growth of the Ben & Jerry’s brand and ultimate Unilever takeover in 2000. What makes this buyout of a small company by a giant, multinational corporation unique, Gelles states, is the autonomy Ben & Jerry’s preserved in regards to their social mission, a stipulation that was written directly into the acquisition agreement. While likened to a “marriage” that warranted adjustment on both sides from the start, the rocky beginning developed into a dynamic that allows Ben & Jerry’s the authority to advance their own agenda and push back against Unilever policies that contradict their mission and values.

Is this good news for small brand lovers everywhere? Perhaps. While David did not slay Goliath in this example, they did find a way to be allies and to allow for compromise when appropriate. Currently, small, local, successful organic brands are the objects of desire for many large corporations, but are healthy, stable “marriages” realistic? By the time of the acquisition, Ben & Jerry’s was a cultural force with a well-established following; their social mission was largely built into their brand recognition. Not all small brands have this luxury, nor the long history, to provide them the clout to negotiate on a higher corporate level. Will the Ben & Jerry’s/Unilever relationship be an exception to the rule or is this the story of a new model to be applied elsewhere?

Gelles doesn’t answer these questions and that is smart; there remain too many unknowns to make generalizations and predictions regarding the future of acquisitions. Ben & Jerry’s has proven itself an asset to Unilever and, with tripled revenues, they are able to leverage their worth as a company. So long as the shareholders are happy, the marriage is happy. But what of the smaller brands that have similar missions but less brand recognition? The broader question might then be: how much to meddle?

Frequently, when smaller brands are bought out by the larger companies, there is a minor public backlash. Fears of products changing and values being abandoned overshadow the potential benefits of such a merger. Maintaining a relationship with current customers is a key component of a successful acquisition, and part of that is truly understanding what they love about a brand and their products. How do all of the headlines affect consumers when they are actually at the grocery store making a purchase decision? Though they might have just heard that their favorite little company was bought out, if the product they want looks/tastes the same, does the acquisition matter?

Not every small brand is Ben & Jerry’s, but their model is admirable to follow. By recognizing what makes a brand popular and researching their steps forward, larger companies will be able to strategize the extent of their influence in order to increase their market share while minimizing the casualties of the acquisition.

-Mary Dolan O’Brien and Sarah Morrison