This transcript has been lightly edited for clarity.
Scott Woodruff: We're seeing a range of trends that are changing, and in some cases disrupting, the way companies develop and commercialize products.
One trend is the influx of technology. Advances in AI and generative AI are really having an impact across the end-to-end development process, driving faster time to market and better product results.
The second trend is packaging rising to the top as a C-suite priority, as leaders look for new ways to generate margin and revenue growth.
The third trend we're seeing is companies developing and building muscles around new mechanisms to bring bold ideas to market in a safe and low-investment way.
AI and gen AI are revolutionizing end-to-end product development and the commercialization process
Scott Woodruff: In some cases in consumer packaged goods (CPG), we're seeing 18- to 24-month development timelines for product renovations. We’re now seeing that being accelerated by up to 60 percent when companies are embedding new technology tools and new ways of working.
Dmitry Mishustin: New AI and gen AI tools are increasing the ability to cast a wide net to understand consumer sentiment. Emerging trends and behaviors, and the competitive landscape, can be rapidly synthesized into actionable design briefs. Next, you could use gen AI tools to translate those consumer insights into visually stunning tangible concepts, and, finally, test those new concepts with gen-AI-enabled synthetic personas. It’s end-to-end optimization of the timeline and the effectiveness of product development.
Jan Henrich: One interesting development we’re watching is how gen AI models in general have leveled the playing field between larger and smaller corporations. It used to be that larger corporations had the opportunity to spot trends, identify them, synthesize them, then also disseminate them at a much faster pace and more comprehensively than smaller peers.
Now with large language models, smaller corporations can actually do the same work, with much fewer resources, at the same speed, and with the same quality.
Packaging is increasingly being viewed as a strategic lever
Scott Woodruff: Companies are investing more and more energy in trying to bring some newness to the aisle by taking heritage brands and contemporizing them. Additionally, we’re seeing companies invest in packaging redesigns that can enable them to get into untapped channels—getting into the dollar store, convenience store, and other channels with very fit-for-purpose products and packaging.
Another value driver is packaging as a way to reduce overall product costs. For example, companies are looking at decisions that could affect pallet packout and freight optimization, which are new levers that are often able to produce significant cost savings for companies.
Bringing bold ideas to market quickly and effectively is a growing priority
Scott Woodruff: One recent example is the CPG food company that wanted to develop and launch a new line of products.
Through the development of advanced analytics, small-batch manufacturing capabilities, and partnering with retailers in a way it hadn’t before, the company was able to test multiple concepts in 15 stores over the span of three months using around 1000 product samples.
Jan Henrich: Recently we’ve been asked many times to build end-to-end perspectives on the ROI of innovation. And what we discovered across categories is that the return on investment is actually quite challenged. We’re quite excited about the potential of AI and gen AI and what they can do to make the internal resources more efficient, the whole process faster, the feedback loop quicker, and ultimately the effectiveness higher of also scanning and understanding what might or might not be successful in the marketplace earlier than before.