Disruption and Categories Ripe for Innovation: Q&A With Hartman Group’s Shelley Balanko
“My first love has always been understanding people and the social and cultural influences impacting the marketplace of today and tomorrow,” Shelley Balanko told Hartbeat in a conversation about her role in guiding The Hartman Group’s business development efforts. Okay, she has a Ph.D. in Applied Social Psychology, so the listening, questioning and observation skills she applied to understanding consumers’ struggles and desires are applied to understanding industry challenges and needs.
Shelley looks forward to opportunities where she can share leading-edge insight from the field and an understanding of the evolving consumer culture, and effectively communicate the implications to diverse audiences across the consumer packaged goods and retailing marketplace. Read on for Shelley’s views on disruption and opportunity spaces in today’s food and beverage marketplace.
Many would characterize the food and beverage industry as undergoing fundamental disruption on many fronts: retail, packaged goods, food service, fresh foods and technology. What priorities do you think marketers and innovators should have when addressing change in the marketplace?
Staying closely connected to consumer desires and needs is a priority in today’s demand-driven marketplace. The consumer-creator is a much more influential player in the industry than ever before, and if industry is not meeting their expectations, consumers can circumvent existing structures and practices to meet their own desires and demands, given digital technologies and sharing economies. This is how many disruptive new brands have come to market.
We know that consumers are demanding more from the brands they buy today. What are some of the leading characteristics that you think inspire consumers to get involved with contemporary food and beverage brands?
Superior experiences inspire consumers to engage with food and beverage brands. Well-designed products and packaging, ingredients that are sourced with the highest standards around quality and ethics, innovative flavors and formats, experiences that fit with modern lives (on-the-go, heightened physical and cognitive performance demands, etc.) and eating patterns (alone, snacking) and brands with a purpose/mission resonate with contemporary consumers.
Small, emerging food and beverage brands have become a major source of growth within packaged goods, yet the industry is still largely dominated by large, established companies. What do you think iconic brands need to do to stay relevant with consumers?
Iconic brands will need to learn how to innovate more rapidly, be more nimble to course-correct quickly and be more connected to consumer culture (e.g., values, definitions of quality). Iconic brands will also need to learn how to manage emerging businesses differently and create new partnerships, as traditional routes and practices may no longer be adaptive.
Are there any categories of foods and beverages that you believe are underserved by R&D, innovators and marketers today?
Despite the growing importance of the fresh perimeter in terms of providing revenue growth for grocery stores and satisfying consumer demand for items that support aspirations for health and culinary exploration, there are a number of refrigerated categories that still could use revitalization:
- Refrigerated Meals and Sandwiches. 5-yr CAGR for refrigerated meals is negative (-1.2%), and many of offerings found in mainstream deli and prepared foods are underwhelming, making this category ideal for innovation as stores reinvest in their prepared sections in pursuit of the grocerant trend.
- Refrigerated Dips. Despite the consumer interest in all things “dippable” and spreadable and the unique innovation in the restaurant space, product variety is limited, and a number of products smack of hyper-processing and uninspired flavors.
- Refrigerated Multi-Serve Entrees. As the meal kit category takes off and consumers seek more semi-prepared solutions to the nightly dinner conundrum, these products must go beyond the highly processed, meat-driven traditional recipes that are currently present.
- Crackers. An ideal vehicle and proverbial “blank slate” for innovation that incorporates unique ingredients that deliver on wellness or culinary benefits and, depending on brand and target segment, can tap the full range of dayparts, eating occasions and mid- to upmarket positioning.
- Dry Dinner Mixes. A relic of the 1980s “dinner hack,” dry dinner mixes may be ripe for reinvention; otherwise, they are likely destined for a long and slow death as the center store contracts.
What about consumer-driven trends? What demand-side beliefs or behaviors do you think marketers least understand?
Contemporary health and wellness is still hard for many to fully understand. The notion that health and pleasure are intertwined is challenging for many marketers who “grew up” in the industry when it was a binary choice. Today there are no trade-offs, and what is healthy is pleasurable, and what is pleasurable can be healthy. The trend around collective nutrition wisdom is challenging to many marketers who insist that consumers need education and should be confronted with nutrition facts when consumers today are taking a more intuitive approach to nutrition and rely on the “expertise” of their social networks more than they rely on science.
How would you define innovation in terms of packaged goods today?
Innovation in packaged goods today is rethinking how business gets done. It’s not just innovating new products and marketing, although those are key components. Innovation today requires a demand-centric point of view and a willingness to work outside or break existing organizational structures and partnerships to forge entirely new paths forward. It requires a commitment to a product-attribute level focus and a willingness for “brand” to be a supporting character and secondary driver of innovation.
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