Products and their packaging come and go. 

But those that stay in the market are a simple result of balancing innovation and New Product Development (NPD).

How do you identify the winning strategy in the Consumer Packaged Goods (CPG) industry? The answer lies in building a high-performing CPG New Product Development (NPD) team. 

This guide will reflect the strategies you need to develop a winning NPD team, driving you to successful product launches and pushing your CPG brand to new heights.

Everyday challenges for NPD teams

A poor product development strategy may result in product failure, but the team can also fail with an effective strategy if its execution is weak or its budget inadequate. Some challenges faced by a New Product Development team are:

1. Innovation

Due to the high competition in the industry, one needs to keep up with the trends and provide a unique experience to the target audience. With so many other brands toiling for the same, the innovation process can be challenging and time-consuming. Another reason innovation poses a challenge in NPD teams is that the outcomes are unpredictable. You won’t know how your product or its packaging will perform in the market. 

In the early 2000s, when the first Shrek movie was released, Heinz launched its ‘Blastin Green’ ketchup. The target audience was, of course, the kids. The product line was launched in purple, pink, orange, and teal, and was called EZ Squirt.

It was a hit in the beginning but short-lived as the company had to discontinue the line after dwindling sales. Why so? 

• The target market was young kids whose attention span was naturally short and who would move on to the next interesting product. 
• Parents raised concerns about the health implications of food colors in children's products.

It’s always best to study your target audience extensively including who has the real buying power (parents, in Heinz’s case).

2. Market volatility

Markets are fluid and unpredictable. New competitors can emerge overnight, and existing ones can change strategies rapidly. Consumer preferences, emerging trends, and competitive dynamics are key elements that make up for market volatility. 

For example, there is a market shortage of wheat affecting the production of breakfast cereals. This means there is a disruption in the wheat supply chain for major cereal brands. The consequences would be delay in production, increased production costs, and price hikes.

3. Limited resources

It takes ample resources, including time, budget, and workforce, to research, develop, and test the prototype. If those are limited then it could pose significant challenges for NPD teams and tamper efficiency. Factors like inflation, war, natural calamities, and more can contribute to the scarcity of resources. 

4. Cross-functional alignment

One of the most challenging and tiring parts of developing a CPG product or any product is the collaboration across different teams and departments within the organization. Different backgrounds often mean different jargon and priorities. It is essential to ensure everyone is working towards the same goal to prevent any miscommunication or discrepancies in product development. 

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5. Risk management

NPD projects naturally involve risks, including technical challenges, regulatory compliance issues, and market uncertainties. NPD teams must proactively identify and mitigate risks throughout the product development process. Common risks faced by New Product Development teams include:

• IT and security risk: Integrating new software or technology may cause disruptions in the workflow in the absence of a tech expert. The team can also come across a bug, breach, or system compatibility issue. 
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  With ISO certification and a SOC 2 compliance badge, Artwork Flow goes beyond to ensure your data is well-secured so the teams can share sensitive files and collaborate on creatives securely.
  

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• Economic risk: Many risk factors such as timing, pricing, consumer preferences, inflation, and natural disasters could disrupt the launch of your product in the market.

• Monetary risk: Ensure you have sufficient funds to carry out the entire project and meet uncertainties like inflation and rise or decline in exchange rates.

• Compliance risk: If your CPG brand fails to comply with regulatory requirements, it could even lead to product recall. Additionally, changes in laws during the product development process can also cause disruptions in the project.

• Operational risk: Procure materials from vendors and maintain their quality with care. Additionally, there are chances of system downtime in the operations and logistics unit slowing down the project.

How to build your A-team

To remain competitive and stand out in the marketplace, not only do you need to come up with innovative ideas but also a strong CPG New Product Development team. This team should be capable of thriving in a dynamic environment. Your NPD team must learn which areas to focus on and identify the priorities to see the favorable outcome you need. 

Here are some ways to nurture the NPD team.

1. Set a clear vision 

A clear roadmap sets the foundation for any NPD team. It shows how well-defined your goals are. Establish a clear vision and set of objectives for your NPD team to align efforts and focus on delivering innovative products that meet consumer preferences and market demands. Ask yourself these questions:

• What unmet consumer needs are you targeting?
• How many new products does your brand launch in a quarter? 
• For whom and why are you developing the products? 
• How do you align these products with the overall business strategy?
• What is your company trying to achieve?
• What is your budget?
• What product categories or areas will each team or team member focus on?
• What is a realistic timeline for bringing new products to market?
• Can you use existing technology for faster development?

You can gather information using the above questions and analyze the market trends to develop an action plan. By setting SMART goals, strengthen the team’s actionables and keep track of your team’s progress to achieve your expected results. 

For e.g., breaking down a question like, “What percentage of your NPD budget should be allotted to developing new products versus line extensions in this quarter?" to a SMART goal can be :

Allocate 60% of the NPD budget to developing new, innovative products with the potential to capture significant market share of 10% in this quarter, while leaving 40% for strategic line extensions that use your existing brand strengths. (This goal is specific, measurable, achievable, relevant to innovation, and has a timeframe for implementation).

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2. Streamline cross-functional collaboration

Once you set a clear goal, it creates a sense of direction and purpose for the rest of the team. Especially, within NPD teams, you foster collaboration between various departments such as marketing, Research and Development (R&D), design, supply chain, legal, and sales. Managing teams within a team can be overwhelming when the following issues can arise:

• Silos cause teams to miss out on valuable insights from other teams.
• It is difficult to keep track of multiple projects, their tasks, and the person responsible for each task.
• Designing complex project workflows.
• Meeting project specifications and deadlines when each team has its own interpretation of the brief.
• Wasting budget on unnecessary hiring and training.
• A project management or design collaboration tool that isn’t user-friendly.
• People may choose to self-censor themselves to avoid expressing their concerns on critical issues to avoid negative consequences.
• Giving underwhelming feedback.

With these roadblocks, accelerating product launch projects in a dynamic environment can be difficult. You need to find ways to conquer to boost team productivity and ensure everything is in motion. Here’s how you can do it:

1. Establish clear roles and goals: Define decision-making processes, workflows, roles, responsibilities, and SMART goals for the project. Assign a team leader who is capable of driving the launch to success.
2. Cross-training teams: Foster cross-training and team-building exercises for a better understanding among team members to collaborate.
3. Resource allocation: Ensure teams have sufficient budget, workforce, and technology to execute the entire project.
4. Right tools: Establish proper communication channels to collaborate, starting from the ideation phase till the launch and post-launch. There are tools for design collaboration, project management, specification, packaging and label management, and more. To automate the project workflow and collate all the communication under one roof, considering a top workflow automation software is a good option. It gives the entire team complete transparency and tracks all the activities.
5. Ongoing feedback: Streamline collaboration with a proper feedback process for sharing reviews and insights.
6. Celebrate milestones: Acknowledge and celebrate successes to motivate and reward team members.

A clear roadmap encourages the entire team to work on the same track and collaboratively, bringing their unique expertise and insights to the table, and contributing to the success of new product launches. 

3. Bring together diverse skill sets

When you observe from the outside, you see a team of product designers, market researchers, engineers, and project managers in NPD. A well-rounded team can approach challenges from different angles. To build such a diverse team, you need to look for candidates with a range of skill sets and backgrounds. To hire the right personnel, you need to first evaluate what’s lacking in the team. 

For instance, to do extensive research to develop your new CPG product, you need someone who knows in and out of the market; Somebody who can provide accurate data on the current trends. Similarly, you need someone well-versed in product knowledge and design to give you a nod to the product development project. But at the same time, one among them should be a pro in communicating ideas and concerns. A CPG NPD team involves various members with soft skills and hard skills. Here are some of the mandatory skills for each department.

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4. Communication is the key

Establish transparent communication channels within the team from the beginning to welcome ideas, feedback exchange, and decision-making. Clear communication ensures alignment on project goals and improves collaboration across departments leaving no room for errors. But how can you do it effortlessly? Here’s an example. Your CPG brand wants to expand by launching a line of flavored yogurts that are preservative-free for young adults. Imagine that the new product development team comprises marketing, R&D, design, and product management. Here’s how the communication flow works:

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Here, we can see how the communication is transparent between different teams under NPD leading to a quicker review of the design and sharing feedback. 

• Weekly/periodic meetings include all the teams to brainstorm and share product and market insights.
• An effective project management tool keeps stakeholders informed about the design progress and streamlines feedback.
• Quick feedback helps in the early identification of any mistakes.

Also read: 5 Tips To Create Effective Design Feedback Loops

5. Agile approach

An NPD team faces issues such as shortage of specific parts, product recall due to a missing barcode, inflexibility to iterate the project, and more. To quickly act in such cases, consider adopting an agile approach to new product development as a viable solution. You can continuously improve and adapt your team by following these steps:

Foundational mindset

Right from the start, move with a flexible approach and prioritize delivering the highest-value features to customers quickly. Keep in mind that you have to make changes to your project on any occasion to improve the product functionalities. 

Sprint

Implement short, time-boxed development cycles (sprints) with clear goals and user stories. Conduct sprint planning sessions to define deliverables for each sprint.

Daily scrum or standups

Hold brief daily stand-up meetings for team members to share progress, identify roadblocks, and seek help if needed.

Team review

Actively seek feedback from stakeholders throughout the development process to ensure the product remains relevant and valuable. This also helps you to practice adapting to the changes you have to make as per feedback. 

Tools and communication 

Establish clear communication channels for sharing information, feedback, and collaboration. This could include project management tools like Artwork Flow, instant messaging platforms, and face-to-face meetings.

You can also include visual management tools in your toolkit like Kanban boards and Gantt charts to track progress, identify bottlenecks, and ensure transparency.

Develop a sourcing strategy

As you constantly review and adapt your sourcing strategy throughout sprints, you can proactively identify and mitigate supply chain risks. For e.g., having multiple suppliers across geographical locations helps you substitute crucial parts of your supply if you face any shortages.

Other critical factors that contribute to success include rapid prototyping, testing, and design iteration, allowing for a faster time-to-market and giving your brand a competitive advantage.

Roles and responsibilities to consider

Consumer Brands Association data indicate that consumer product employment is 5% higher than pre-pandemic levels in January 2020, revealing that a larger workforce is required to meet increasing consumer demand. 

Companies nowadays aim to provide their customers with the best experience possible rather than being more of a feature-oriented product. Depending on the nature of your CPG product, the roles in the team may differ. In the US, the average annual salary for a product manager is $149,043.

Your goal is to bring together a diverse team that understands your target audience and is flexible with the competitive landscape. Here are some key players in an NPD team:

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1. Product manager

Being the captain of the ship, a product manager acts as a liaison between different departments. They oversee the overall product development process ensuring everyone is aligned with business objectives. A product manager usually hails from a marketing background and grows with years of experience. A senior product manager can earn an average of $160228 per year.

2. Market researcher

The market researcher is the insights guru in the team. They provide insights to inform new product development decisions and strategies. From laying the foundation to preparing market strategies to driving results for the company, a market researcher is a unique lens to the NPD team. They must have a strong understanding of analytics and the product.

3. Designer/engineer

By combining creative and technical elements, they transform conceptual ideas into tangible prototypes and products. They also work closely with the Research & Development (R&D) team to ensure product feasibility and manufacturability. Entry-level positions start at $95,275 annually while most experienced workers earn approximately an annual salary of $190,000.

4. Supply chain manager

Supply chain managers oversee the coordination between production facilities, suppliers, and logistics providers to ensure that products are delivered smoothly. They work closely with a team of experts, including engineers, to assist the daily operations team. The supply chain and logistics team work together to ensure consistent product availability and prevent production errors in the supply chain. A background in logistics, operations analysis, or operations engineering is significant for those interested in applying for this role. On average, the base salary for a supply chain manager is $124,996.

5. Sales and marketing team

Once your product is ready, it has to be introduced in the market with a zing. That’s where the sales and marketing team step in. A brand marketer can earn from $110,634 to $147,638 on an NPD team average. Most sales and marketing managers have experience in business analytics, marketing finance, or economics.

Collaborating in the CPG new product development environment 

Now it’s time to use your team’s strengths and seek each member’s opinions and views. Collaboration is a major factor during new product development. One slip in feedback can even cause a recall. Let's look at the key stages of NPD and learn how different departments collaborate to create market-winning products.

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1. Ideation and concept development

Here's to the first step in collaboration - brewing ideas. Marketing, R&D, product, and design teams collaborate to brainstorm ideas, conceptualize product features, provide legal advice, and create prototypes or mock-ups.

‍Marketing: Backed with consumer insights and current market trends, the team identifies the gaps and opportunities. SWOT analysis is the best way to analyze your brand’s competitive position and create a strategy. 

‍Research and Development: They bring their expertise to evaluate whether the potential product features are feasible to develop.

‍Product management: The product team takes charge of setting product specifications based on the reports and suggestions received from other teams. Product specs sheet is a reference for making informed decisions regarding product design, functionality, and development processes.

‍Supply chain: Supply chain specialists set a supply chain strategy in the beginning stages to avoid any incidents related to resources or supplies needed to assemble the product. 

‍Regulatory: Legal teams can provide input on the general regulatory landscape for your new product or any restrictions regarding specific ingredients or functionalities. 

‍Design: Once the ideas are approved, designers create a mock-up.

Also read: Creative Collaboration In 2024: Expectations And How You Can Meet Them‍

2. Product development and testing

Now, you’ve to refine the ideas that were discussed and approved. R&D, engineering, and quality assurance teams work together to develop product prototypes, conduct testing and validation, and refine product specifications based on feedback. 

‍Supply chain: They source materials, negotiate with vendors, and ensure a smooth flow of materials.

‍Research and Development: Works closely with the engineering team to develop functional prototypes, ensuring the product works as anticipated.

‍Engineering: Addresses technical challenges and turns prototypes into manufacturable designs along with materials.

‍Quality assurance: Ensures prototypes meet all safety and performance standards.

3. Manufacturing and production

With a completed design, the supply chain, operations, and production teams collaborate to run manufacturing processes, ensuring efficient production scale-up and quality control.

‍Supply chain: The team ensures cost efficiency and end-to-end supply by coordinating with the external manufacturers throughout the entire production process.

‍Operations: Plans and executes manufacturing operations, providing feedback on product bottlenecks while adhering to production timelines.

‍Production: The production team heads the manufacturing plan, ensuring consistent quality and meeting production targets.

4. Launch and commercialization

Cross-functional alignment is essential for a successful product launch and market entry. Sales, marketing, and product management teams collaborate to develop launch plans, promotional strategies, and sales forecasts. 

‍Sales: The sales team closely works with the product team to understand the features and benefits, preparing them to pitch the product to retailers and distributors.

‍Marketing: The marketing team develops a brand story and creates promotional campaigns to generate interest and demand within the target market.

‍Product management: The product management team oversees the launch including distribution and price strategy and ensuring retail availability.

Innovating with tech and AI in NPD teams

By adopting modern practices throughout the NPD process, product managers can unlock the full potential of their team members. According to PWC, over 50% of companies have started integrating AI into their daily operations. This means that CPG brands could potentially grow even faster with the help of AI and other advanced technologies. However, implementing these technologies can be challenging, especially when it comes to scaling for higher ROI, making long-term investments, and ensuring that the right workforce and tools are in place for the job. 

With proper training and knowledge of advanced technologies, your team gains numerous opportunities that can improve efficiency and productivity.

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“Technology and AI are changing how new products are made. AI tools can look at lots of data to find out what people want. This helps teams make better choices faster. Using tech and AI in product development helps companies save time and money, and create products people really want.”

Yatin Patil,
Manager - Engineering & NPD, Desworks

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Here are the key areas where you can see the power of tech and AI:

1. Choosing the right technology

It is important to consider your budget, usability, and scalability while selecting the right software or technology. To create physical models or modify your product, software like CAD and 3D printing helps you finish the job quicker. There are also various AI-powered tools for collaboration, packaging design, data analytics, content creation, and more that can easily integrate with your existing workflows which are time-savers. 

2. Streamlining communication

A team with both technical and non-technical experts may find it difficult to collaborate one-on-one and come to the same conclusion. With project management tools, it’s easy to streamline your project communications helping you to launch products on time. Again, choose the right tool that suits your team’s requirements and has a fine customer support service. Using Artwork Flow, you can customize workflows, tailor your team's needs, track their activities, and ensure the right people review and approve the creative at every stage. 

‍Learn how Jones Dairy Farm achieved 75% higher efficiency with Artwork Flow

‍3. Analyzing data

Using AI you can find the recurring patterns and unforeseen trends in the market, helping you to strategize better and make smart decisions. It can also:

• Automate repetitive tasks like data entry, scaling, and basic customer interactions.
• Analyze social media and reviews to measure customer feelings and preferences.
• Personalize experiences and make accurate predictions.

4. Experimenting 

Approach experiments with a ‘test and learn’ mindset. Conduct A/B testing and rapid experiments to improve your product. Such experiments help you analyze where things have gone wrong and suggest working on the drawbacks. 

5. Internet of Things (IoT)

With the advent of IoT technologies, you will be able to develop connected and smart products that enhance the user experience

6. VR and AR  

Testing and prototyping in virtual and augmented reality enables immersive experiences and real-time feedback.

Real-life applications in CPG brands

1. Production

PepsiCo is shifting to machine learning to improve the quality of its Cheetos snacks. This involves achieving accuracy in various factors such as size, shape, flavor, and aeration of the Cheetos. As a result of the implementation of autonomous systems, the company can now monitor the products that come off its Cheetos extruder lines and alert it to any problems in real time. PepsiCo plans to expand this technology across its Cheetos production footprint after successful trial runs.

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2. Product innovation

Milka, known for its innovation, wanted to develop a new product that would excite its consumers. That’s how Kraft Heinz/Mondelez approached Foodpairing AI, an AI-powered tool that pairs food products, to create a pairing that would match the aroma of Milka. 

From studying the competitor products and market insights to ingredient matches, Foodpairing AI came up with the idea of a low-fat chocolate-cheese spread. The response to the new product was overwhelmingly positive and 74% of consumers agreed that chocolate cream cheese is a pleasing product.

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3. Personalization

L'Oréal took skin and beauty care to another level by introducing Perso, an AI-powered at-home system for skincare and cosmetics. The Perso app assesses your skincare and its concerns and environment to provide you with personalized, on-the-spot skincare products. How cool is that? 

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4. Brand campaigns

With its partners in India, Mondelez International released an impressive Diwali festival campaign using AI. To create this digital ad for the Indian market, Repeecher, an AI voice cloning software, collaborated with Mondelez, Oglivy, and Wavemaker. 

In a unique video, a digital avatar of the famous Indian celebrity Shahrukh Khan represents small business vendors in four categories - fashion, footwear, electronics, and grocery. Respeecher's AI algorithm analyzes the actor’s voice and creates a target model. Local shop owners submit their business names, and when the facial and voice cloning models are ready, voiceovers of the local store names are fed into the system. This generates SRK's cloned voice, making it seem like he represents thousands of local vendors. This benefits the vendors by allowing them to spend less on video ads.

Watch this genius video ad here.

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So, be it cross-collaboration, encountering shifting trends, or devising a brand campaign, AI will help you keep up with the market pace. It will help you polish your tasks in the NPD process such as in the consumer department, ingredient discovery, formulation, personalization, and logistics.

And the benefits? Streamlined operations, faster go-to-market products, and improved customer experiences. 

Remember, AI will never replace anybody but helps automate repetitive tasks and uplifts the new development process of your CPG brand.

NPD management made smarter with Artwork Flow

Bringing together a team of talented individuals is similar to building a machine. Every gear and cog plays a specific role, but together they make the machine function at its best. You need to learn each member’s strengths and abilities before assigning them the tasks. Once you have your team ready, work towards the goal with clarity and prepare them to move with an agile approach and collaborate effectively. 

Maintaining a large team in this dynamic environment can be complicated. With an AI-powered platform like Artwork Flow, make your CPG New Product Development process smoother.

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1. Automated workflows: Collaborate between teams easily through flexible workflows, assign tasks diligently, and bring all the stakeholders up to speed with real-time notifications.

Discover how Havmor improved its retail speed to market by over 70% with Artwork Flow.

2. Label management: From letting you create detailed label checklists to inspecting label prints, Artwork Flow’s label management software makes sure you send out error-free packaging labels.  

3. ComplyAI: Meet complex label regulations and find out if you have any undeclared allergen information or missing images with automated compliance checks to avoid mass recalls. 

4. AI-enabled proofing: Cut your review time by half and send your creatives error-free by leaving feedback using smart proofing features such as annotation tools, spell check, version comparison, and more. 

5. Version control: Track all the changes made to your packaging design and stay up-to-date with version control feature. Never fear about losing a design again!

6. AI background generator: Create themed backgrounds for your CPG product marketing campaigns. With an instant AI-background generation tool like this, streamline design workflows and save cost and time. 

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Here’s what one of our customers has to say:

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“What stands out most about Artwork Flow is its simplicity and effectiveness. It’s remarkably user-friendly, turning the complex dance of artwork management into a breeze. Overall, the platform has been instrumental in cutting down the approval time and boosting our go-to-market speed with a fun and efficient workflow.”

Valentine F.,
Innovation Project Manager, LA VIE™

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Market trends are shifting in the blink of an eye and it is vital to act quickly and smartly. Be it a small-scale or large-scale CPG brand, Artwork Flow is a good pick to simplify the collaboration process among various NPD teams. To learn more, book a demo with us.