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My first innovation job was marketing dried soups for Honig, the leading Dutch brand and market leader in the Netherlands. We sold more than 50 million consumer packets in the Netherlands per year. Not a bad figure, considering the country’s population is only 16 million. Honig had a market share of more than 60 percent. There was just one problem; the dried soups market had stopped growing.
As ‘the new kid on the block’, I was invited to provide fresh input into their innovation strategy. I did field research on how consumers used our soups, researched consumer trends, investigated what our competitors, Unilever and Knorr, were working on and looked into new technologies. I concluded our current market would not be able to generate growth. Therefore I knew we had to innovate and do something unique. This was in late 1980, the era when microwave ovens were becoming commonplace in European households. A lot of other food producers were already innovating in fresh, frozen or chilled microwavable meals that took seconds to cook. Honig had to be part of this new market.
In addition to being involved in the innovation strategy, senior management also had me take on a hands-on innovation assignment. My challenge was to increase the long term sales of, Honig Vermicelli Bouillon Soup, the soup mix in our assortment with the lowest sales, some 750,000 packets sold annually. It was an old-fashioned clear soup with lots of vermicelli noodles. Studying the world of soup broths, one thing struck me. Broth cubes were a success as were clear broth beverages. However, our broth soup with vermicelli noodles was not. Why not just leave out the noodles? And that’s exactly what we did. We re-launched the soup as the first clear broth soup without noodles. Sales doubled within 1 year to 1.5 million packets and margins rose by 50 percent as we saved on the costs of producing and packaging the vermicelli.
In the meantime, I discussed our chilled soups innovation strategy with my colleagues at R&D, logistics and production on a mid-management level. None of them liked the intention to introduce ready-made chilled soups to Honig’s line of products. In their opinion we didn’t have the recipe expertise and lacked the R&D capabilities. We also did not have a clue about refrigeration logistics needed to get the product into the supermarkets. I considered my colleagues foolish for once again resisting change.
I then decided to take our plans to the top and got a two-hour time slot in the board room of Honig. We presented the board with all the consumer food trends and growth figures of ready-made microwave products worldwide. We even provided taste tests of competitive fresh chilled microwave products. The board was truly enthusiastic, up until we discussed the business case. This strategy was only going to be profitable after five years in the most optimistic scenario. Both costs and risks were huge as we had to build a new processing and packaging factory for chilled soups. I will never forget the words the CEO said to me at the end of the strategic innovation discussion: “Gijs, without any risk you doubled profits of our worst selling flavor of dried soup. Innovate the next soup flavor and you’ll realize more profits in the coming five to ten years than with an entire line of chilled soups ………”. And that’s just what Honig did. It continued to be a very successful market leader in the declining dried soups market. Fifteen years later H.J. Heinz bought the brand.
In my new book ‘The Innovation Expedition’, I share the wise lesson that you can invent on your own, but in an organization you can never innovate alone! You need an awful lot of colleagues and bosses to share your vision before a big change can truly take place. You need R&D engineers, production managers, IT staff, financial controllers, marketers, service people and salesmen to develop the product, produce it, get it on the market and service it. Therefore you have to give them a chance to discover for themselves, what different paths are possible, what can be developed and what is realistic. If you want to be an effective innovator in an organization remember the chilled soups lesson: you can’t innovate alone.
Gijs van Wulfen (The Netherlands, 1960) is the founder of the FORTH innovation method. FORTH is an effective and structured method for ideating innovative products and services. His latest book is “The Innovation Expedition: a visual toolkit to start innovation”. His clients are international companies in industry and services, as well as non-profit organizations in government and health. Gijs also trains facilitators in his method.
Gijs is a key-note speaker at international innovation conferences, chosen by Linkedin as one of their 150 Thought Leaders and the #2 in the Top 40 Innovation Bloggers of 2012.
Photo:A lone person seeks to inform the crowd from shutterstock.com