Gourmet-Garden's award-winning herb system broke new ground in the US last year and in the UK just last month. Head of Innovation & Marketing, Jacqui Wilson-Smith, speaker at our LIVE industry forum in August, talks about the journey to disruptive innovation.
I often get asked, “What is disruptive innovation”? So I researched the terminology. According to Wikipedia, Disruptive Innovation is innovation that helps create a new market and eventually disrupts an existing market, displacing an earlier technology. It's a term often used to describe innovations that improve a product in ways that the market does not expect.
In contrast, Sustaining Innovation does not create new markets but rather only evolves existing ones with better value, allowing businesses to compete better. Sustaining innovations may be either "transformational" or "evolutionary". Sustaining innovations are typically innovations in technology, whereas disruptive innovations cause significant changes to markets.
In 1999, Gourmet Garden launched prepared herbs and spices in tubes using a revolutionary new eva-fresh hurdle technology, which meant that “almost” fresh herbs, packed with protected essential oils and flavour, could be on hand for weeks in a convenient squeezy tube. I believe this was primarily an example of sustaining innovation vs disruptive innovation.
Let me share with you the story about busy scratch cooks before Gourmet Garden was launched. They loved using fresh herbs & spices in cooking, and mainly reserved that treat for special occasions or weekends. Dried or jarred herbs & spices or none at all, were mainly on the menu for these busy scratch cooks during the hectic working week.
When the Gourmet Garden pastes in tubes were launched back in 1999, these busy cooks slowly discovered them over the following years and realised that although the herb tubes were not the same as fresh herbs, they were the next best thing, and were much more convenient to have on hand for midweek occasions. A niche incremental occasion for prepared herbs evolved.
Although the ‘eva-fresh herbs in tube’ innovation gained incremental growth for the total herb category, offered a huge improvement in freshness quality, and the tube pack format offered convenience, the innovation still only managed to penetrate about 15% of households. In essence the innovation primarily encouraged existing heavy herb users to use more. It wasn’t really a game changer to the herb and spice marketplace.
In March 2014, Gourmet Garden launched in Australia a new fridge system of herbs & spices in an attempt to disrupt the herb & spice marketplace and change the way mainstream consumers cook with herbs. The system has been designed for a broader segment of consumers: light users of herbs, who aspire to cook more from scratch, as opposed the existing heavy herb users and scratch cooks. The system also flaunts a disruptive communication platform in advertising that highlights consumer dissatisfaction with fresh herb waste (a major barrier to purchase).
However, the system itself is comprised mainly of sustaining innovation aspects including: evolved tube packaging with varietal led, colour coding, alongside revolutionary aspects too such as storage solution and features, offers retailer choice in pack formats (pouches or pots), and the amazing new Lightly Dried herb technology. The new Lightly Dried herbs (which are prepared, washed & roughly chopped) offer home cooks the ability to have nearly fresh herbs always on hand in the fridge as they stay fresh for four weeks once opened.
A disruptive innovation strategy comes with many risks. Apart from the big unknown of 'will it actually sell and was it worth the investment?', Gourmet Garden also grappled with the potentially cannibalistic nature of such a launch on its perfectly good business model of selling herbs pastes in tubes. This included many detailed considerations including pricing, margins, production capacity expansion timings and portfolio mix impact.
It’s early days for Gourmet Garden to truly assess our success at innovative disruption or at least sustaining innovation, however, initial results are promising with just five new SKUs now in market since March 2014 in Australia, October 2014 in the US and May 2015 in the UK. Our benchmark measures of “like for like” SKU sales are typically more than double in total, with about 20% cannibalisation or less – however not all SKUS are alike!
Rollout plans continue as production capacity builds with 7500-10,000 store stockists anticipated by the end of this year in the States and launches planned for Canada and strategic pockets in Europe by early 2016.
I believe that it’s a “process of playing with different approaches” that can lead to true disruptive innovation. At the Food & Drink Business + PKN Live Disruptive Innovation Industry Forum I plan to share the journey so far on the road to disruption.
