fast moving consumer goods

Five Steps Behind: How Ethnography Based Strategy Can Fuel Ingredient Innovation in the Early Stages of the Value Chain

MARTIN N. MILLARD ReD Associates YOSHA GARGEYA ReD Associates Global fast moving consumer goods companies are faced with significant challenges on all fronts as start-ups challenge brands, retailers’ private labels challenge margins and technology giants like Amazon and Alibaba challenge the entire business model. To survive in this environment, FMCGs must, among other things, grow on the basis of meaningful product innovation — innovation that is often outsourced to their ingredient suppliers. Based on four client engagements, this paper outlines how the existing relationship between ingredient suppliers and their customers further down the value chain is currently defined by a deterministic dynamic that results in incremental and marginal innovation and a risk for said suppliers that their products become mere commodities. We argue that by employing ethnography based innovation strategy, ingredient suppliers can establish their own opinion of the market from the vantage point of their technologies and establish a new,...