The virtuous cycle of trust. Unveiling clues to successful innovation in the Fast Moving Consumer Goods industry

Abstract

Purpose: This paper aims to shed light on features of successful innovation and on the role played by downstream open innovation (OI) dynamics in the Fast Moving Consumer Goods (FMCG) industry. It also explores the reasons for the decline in the number of disruptive innovations in this industry in the European Union (EU). - Design/methodology/approach: The authors interpret the data in a Kantar consumer panel dataset on disruptive innovations in Spain through an exploratory research including in-depth interviews with 19 managers in the industry.- Findings:Results show that downstream open innovation in this industry is mostly limited to the executional stage in the process and highlight the crucial role played by the point of purchase in the success of innovations. The authors build up a virtuous circle of innovation based on features such as the use of OI processes, company focus and marketing support, transparency and collaboration with retailers, as well as the product's uniqueness and its potential to become viral.- Research limitations/implications: The paper focuses on Spain and, thus, results cannot be generalised. Further research in other countries would be interesting. - Practical implications: The study describes the features of disruptive innovators and develops an extensive list of success factors.- Social implications: The development of disruptive innovation is a source of competitive advantages and one of the most relevant activities of managers today. Nevertheless, the number of disruptive innovations is in decline, and only a few succeed, negatively affecting consumer welfare.- Originality/value: Through this study, the authors provide insights on the features of successful innovators in FMCGs and describe the factors affecting the decreasing trend in the number of breakthrough innovations. Further, this paper fulfils an identified need to study OI in low-tech industries.