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Why do so many new product innovations flop, even when brands invest huge sums and extensive insight? Guy White, founder and CEO of Catalyx, explains how the key to success lies in uncovering hidden consumer tensions, understanding the contradictions and unmet needs that traditional research often misses, and designing products that truly resonate. By tapping into these deeper drivers, brands can move beyond short-lived trends and create innovations that not only survive but redefine their categories.

Despite companies investing over $3 trillion annually in new product development, nearly 50% of innovations fail within two years. That is huge. A huge waste of resources, a huge waste of potential and, moreover, a huge waste of money.

A key takeaway from this is that it is clear existing reactive and trend-predictive approaches to FMCG innovation are no longer working. ‘Flash in the pan’ trend copying, such as the current rush to create Dubai Chocolate-flavoured SKUs, may create a short-term revenue boost but won’t last any longer than the hype that surrounds it, unlike category-shifting innovations such as Tony's Chocolonely. By failing to align with genuine consumer needs or emotions, brands are falling short of delivering meaningful, long-lasting products that hit the mark.

So why do so many new innovations fail, even when backed by significant resources and insight?

Tension-led innovation is key

Today’s FMCG landscape is fast, noisy and shaped by more empowered, fragmented consumers. Existing insight methods simply aren’t reaching far enough into their lives, motivations and decision making, and are failing to reveal the deeper drivers that shape their purchasing behaviour. The trouble is, consumers rarely articulate their needs in full and getting to the core of their needs is never easy work. It is tempting to take consumers at face value – but remember, that is what the competition is doing as well.

We increasingly find ourselves caught between a rock and a hard place. On one side, companies face mounting pressure to jump on the bandwagon and deliver the next ‘big thing’. On the other, they often lack a genuinely consumer-centric innovation process agile enough to determine whether they should. True insight requires more than collecting what consumers say – it demands deeper exploration of their contradictions, inconsistencies and unspoken desires to truly understand what drives their behaviour.

This is where tension-led innovation comes in. Highly accurate and insightful, it uncovers what consumers really need – often even before they know it themselves. This is possible to do at speed, but it requires companies to have the right approach and mindset for innovation development. Hardly any do.

Broadly speaking, consumer tensions are the emotional or functional frictions consumers experience. Those unmet needs, or compromises that have to be made because consumers are caught between conflicting desires. For example, they want an indulgent treat but are driven by health goals or need a convenient ready meal but are sustainability conscious.

These tensions are where innovation opportunities truly lie. Focussing on measuring what people say (or how they react to boxes on surveys), not what they feel or avoid, traditional methods often rely on predictable measures – past sales, category norms or unrepresentative focus groups – that fail to push the boundaries.

This is why we often see a sea of flavours within an ocean of copycat formats, but it is rare to see the disruptive new offer that pushes a category forward. To do this, you have to dive deep into the desires that are really driving consumer thoughts, behaviours and decisions. And then be bold and have the courage to launch the disruptive design into the marketplace. True innovation is about setting the agenda… not following the latest trends.

But in big companies, it is hard to push that fragile innovation balloon down a corridor lined with stakeholder razor blades ready to rubbish it for its audacity.

Let consumers shape innovation

For real success, brands need to tap into consumer culture. They need to gain a real understanding of lifestyles, aspirations, dislikes, ethical priorities and emotional triggers before spending on new product development. Ultimately, innovation is about fit. The real question isn’t whether an idea is new, but whether it’s the right kind of new, one that suits your brand, connects with your customer and makes sense in the context you’re in.

Take the soft drinks market. Challenger brands like Dash Water, Trip and Moju have done a brilliant job infiltrating the market and gaining share. That’s because they’ve identified specific niches, such as gut health, calm or hydration with a twist, and solved a real consumer tension with something that genuinely helps. They’re agile, targeted and completely aligned with what consumers want. But they will only survive and thrive if they have a consumer-centric insight engine supporting them to develop the difficult second album and not be just a one-hit wonder.

Product innovation isn’t the only type of innovation that exists here, either. Ingredient innovation –changing what’s inside the product to reshape how people think about the category – can unlock new relevance. Packaging innovation – designing formats that drive choice and solve friction – is equally powerful, just look at how the introduction of milk sticks on airlines has eliminated mess, simplified service and elevated the in-flight experience.

Service innovation is another area full of potential. It’s about adding layers of value beyond the product itself – through convenience, confidence or curation. Blue Apron didn’t just sell food; they solved decision fatigue. Instead of competing on-shelf, they delivered everything: ingredients, recipes, portions and instructions. The result? Consumers who felt like cooks, not just customers.

Brand identity matters too. Consumers are drawn to brands that feel authentic, socially conscious and aligned with their values. If a brand is seen as performative, inauthentic or slow to change, it’s tough for them to make that connection — no matter how strong the name recognition is. The gut health start-up, Poppi, recently bought by Pepsi for $1.5 billion, used to be called Mother. It kept what was inside the same and changed everything else…And the rest is history.

Redefining relevance

Brands that build on consumer tensions can redefine categories – not just compete within them. Innovation rooted in tension helps such niches and desires to be identified, enabling brands to develop products that customers feel emotionally connected to. When a product truly meets these needs, it gains relevance, encouraging repeat purchase and increased loyalty. Brands that tap into real frictions – and resolve them in inspiring ways – won’t just stay relevant. They’ll define what relevance means.

The rules of the game have not necessarily changed, but more people have figured them out, and the barriers to entry to both the category and to doing truly world-class consumer-centric innovation have dropped. So to win in this cutthroat world, you must always be on your innovation ‘A’ game. Throwing mud at the wall and hoping 50% of it is still there in two years is not a recipe for success.

In short, FMCG innovation is changing. Success now depends on moving from reacting to leading – not by guessing where consumers are going, but by understanding what’s holding them back. By uncovering and resolving hidden consumer tensions, brands can move beyond trends and beyond imitation. In a world where private labels are raising the bar, that’s not just a nice-to-have. It’s survival.

Success lies in knowing when to renovate, reframe or rethink entirely – and having a clear Desire, Define, Develop process that ensures your innovation fits your brand, your consumer and the moment you’re in.