Are we done yet?
January 14, 2009
So are we done with the recession, mini-depression, whatever you want to call it today? Listen, I already know the answer, but I’m afraid that a recessionary mindset has begun to establish itself amongst not only consumers, but all of us actively engaged in what we call an “honest day’s work.”
The most recent analyses (and I’m talking late December 2008 now) suggest that the U.S. economy – and like it or not, it still drives the global engine – should begin to muddle out of its morass sometime second quarter.
But don’t expect any sudden surges, the economists counsel us. A lot will depend on what kind of stimulus package President-elect Barack Obama will present to Congress and how quickly it moves through those hallowed halls.
At the same time, we also need to keep an eye on commodity prices, everything from those now reasonably priced barrels of oil to the ever-volatile cocoa bean surges. With talk of deflation and inflation swirling about, it’s really difficult to keep one’s eye on the prize these days.
So when I sat down to peer into my snow-covered crystal ball – as you might suspect, we’re having a real winter here in Chicago so far – I decided to review what confectionery trends were predicted for last year, and whether any of those remain relevant today.
Last year at our European Suppliers Roundtable gathering in London, Lee Linthicum from Euromonitor talked about four key confectionery trends affecting markets globally: health, premiumization, innovation and organic.
In retrospect, I would say that three out of those four remain strong. The only one I’m a bit unsure of – and it depends how one defines it – is innovation. It’s a word that’s bandied about everywhere, but I have to admit, I’m not sure there was that much “true” innovation in confectionery last year. Hence, can it be called a trend?
Now, some experts claim that true innovation only surfaces when ones’ backs are against the wall – like so many businesses these past nine months. One such expert, Clayton Christensen, a Harvard Business School professor who focuses on innovation and has written several books on the subject, recently chatted with MIT Sloan Management Review senior editor Martha Mangelsdorf for the Wall Street Journal’s Business Insight.
In the interview, Christensen said that the financial crisis and economic downturn will have “an unmitigated positive effect on innovation.”
He justifies his prediction by noting that 93% of all successful innovations started off in the wrong direction before getting it right. Christensen goes on to point out that good times enable such largess while tough times not only keep the cost of innovation low; they force innovators to get it correct right off the bat.
The breakthrough innovations come when the tension is greatest and the resources are most limited,” he says. “That’s when people are actually a lot more open to rethinking the fundamental way they do business.”
Christensen estimates it will take about five years for those innovations to surface, although he suspects that some “home runs” will emerge within two years.
I suppose there’s some validity to the Harvard professor’s comments, although methinks there are just enough examples involving tensions and limited resources that have brought about disaster instead of innovation.
So I toss out my queries to readers: Has this most recent recession stimulated innovation at your company? And have you seen an increase in innovative confectionery products during the past six months?
As for confectionery trends that I foresee in 2009 that will emerge as factors for the coming years: value, authenticity and intensity. Got to run, there’s an ISM show to see, where I hope to prove my prognosticating powers are right on. More on this in a forthcoming issue.