Are we really that bad at innovation?

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Our observations show that the wine industry is full of new ideas, but consumers often aren’t interested
The wine industry is often accused on being slow to react to market trends and consumer demands. Lots of excuses tend to be trotted out: it’s an agricultural product at the mercy of weather and climate, it requires long and capital intensive production process, there is a production-focused mentality among many producers, most businesses are small-scale and under-resourced, and so on. Occasionally we also still come across the traditional high-handed attitude to consumer needs, paraphrased: “we first create the wines, we then think who to sell them to”.
However I am beginning to wonder if this convenient narrative is a bit misleading, or perhaps even out of date.
When speaking about progress in any field, be it consumer goods or culture, it’s useful to remember that there are three elements at play:
  1. Invention: the process of creating something completely new
  2. Copying: the process of reproducing a version of something existing
  3. Innovation: improving something that already exists
One could argue that Invention is the hardest and rarest process. Whenever I think I have had a genius moment of invention, I find that a quick Google search normally uncovers something that already exists that was pretty much what I have thought of. Annoying though the phrase is, I am increasingly a believer in “there is nothing new under the sun”.
Copying is easier to recognise as it’s arguably everywhere and it’s what drives human culture forward. The very definition of culture is one of shared (copied) ideas, customs and behaviours. Our ability to copy or “outsource the cognitive load” to those around us is what makes us thrive as a species. The wine industry certainly knows much about copying as we all share similar production methods, similar packaging and very tight language to communicate about wine. The wine culture has been transmitted (copied) for generations. Sometimes the copying is subtle, sometimes the relationship to other well known brands is quite obvious.
Innovation is a combination of the two concepts above: it is the process of taking what exists and making it better. This process involves listening to what the needs really are as when in 1943 Edwin Land’s 3-year-old daughter asked him why the camera that they used couldn’t produce a photo immediately. Edwin Land went on to launch the Polaroid camera four years later.
The paradox of innovation in the wine industry is that consumers can be the main barrier for great innovations to succeed and at the same time the source of inspiration just as Land’s daughter was to his father. On one hand, consumers may penalise producers who offer something far too removed from what they expect. This is what Dawar and Bagga call product centrality, when a product innovation moves too far away from what consumers expect, sales suffer whether it’s a concept like wine in a can or a label with a colour not seemed suitable for wine. On the other hand, listening to consumers is what underpins what the needs and expectations are.
In a way, I find the wine industry to be very innovative (and even quite inventive). Walking down the aisles of any wine fair is a great way of spotting new packaging, labels and concepts. But at the end only those innovations that manage to combine a degree of centrality/expectation and solve a consumer problem are the ones that really make a mark. Coravin is a great example of a new product that manages to win on both fronts. Screw-cap is only successful in the markets where consumers have primed its ability to solve a problem over how much removed it is from the norm but it’s less successful where consumers feel is too removed from what wine should be.
Our recipe for innovation is to segment the market, understand what drives consumer demand, listen to what they need that doesn’t exist at the moment and ultimately test to measure how ready your target consumers are for the new product. As they say, it’s as much about the execution as about having an innovative idea.
Author: Juan Park
Email: juan@wineintelligence.com
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