One year ago, Kraft did something it hadn’t done in nearly a quarter of a century: It launched a new brand that created a new category. A year later MiO, a liquid water enhancer whose name means “mine” in Italian, achieved an impressive milestone when it reached $100 million in sales.
With its 2011 corporate revenue estimated at $54 billion and brands in practically every aisle of the grocery store, Kraft is the largest producer of branded, packaged food and beverages in America. So it’s hard to believe that before MiO, the last new category Kraft created was DiGiorno frozen pizza in 1995 and its last new beverage brand was Crystal Light, launched in 1988.
“Like a lot of other CPG companies, Kraft had gotten in the rut of gravitating to the safer, closer-in, lowest risk type of innovation–small line extensions with minimal downside but also limited upside,” explains Barry Calpino, vice president of innovation at Kraft Foods.
Kraft isn’t alone. Creating a new brand is an expensive and difficult task and innovation of any kind is too often associated with blind risks and leaps of faith. The data speaks to the challenges: According to a leading market research firm, only 25% of new consumer and retail products generate more than $7.5 million in sales in their first year, and only 3% achieve $50 million or more.