Most food innovation dashboards report success rates above 50 percent. However, shelf data tells a different story, with the large majority of new products disappearing within two years.
In a new article for Food Industry Executive, Clareo’s Wiles Kase and Justin Kanthak of Lesaffre argue that the reported figure is a vanity metric. Their working estimate of the real underlying hit rate for food innovation is 5 to 10 percent, and teams that chase a higher number usually get there by padding the pipeline with safe line extensions instead of sound bets.
The more useful measure, they argue, is conversion rate rather than hit rate. Using the more reliable conversion rate calls for three shifts: measuring what actually drives growth rather than what flatters the dashboard, judging failures by the quality of the bet rather than the outcome, and setting elimination criteria upfront so zombie projects are retired early. They point to well known and understood case studies – Pepsi, Yoplait and others.
A 10 percent success rate is not a failing to be corrected; in fact, teams should be rewarded for failing right. This is what real innovation costs, provided the wrong ideas are killed fast enough for the right ones to thrive.
Read the full article at Food Industry Executive.
