Signposts for innovation

Everyone loves an inspiring innovation. Here are two of my favourites. One is creativity with dairy ingredients to provide a healthy indulgence, the other is a rare genuine innovation in plant-based, non-dairy kefir. Both of them provide some clear signposts to success for new product developers in our industry.

The brand Little Moons was originally launched in the UK but can now be found in grocery stores from France to Australia. It is inspired by Japanese mochi, a type of rice cake which is also sometimes filled with red bean paste and is known in Japan as daifuku. Little Moons mochi are bite-sized ice cream wrapped in a dough made from glutinous rice. The brand also offers gelato wrapped in mochi dough. Dairy ingredients used include, depending on the product, whole milk, double cream and full-fat soft cheese.

Little Moons was launched with no external funding in 2010 by Howard and Vivien Wong, who came from backgrounds in economics and accounting. Inspiration came from their parents’ Asian bakery business that distributed Asian patisserie products in the UK.

Little Moons initially sold to high-end restaurants and Asian foodservice chains in the UK. In 2015 it was listed in Whole Foods UK supermarkets, and became Whole Foods UK’s best-selling ice cream for the next three years.

Little Moons aims at health-aware consumers looking for indulgence. Its multiple benefits enable people who want indulgence to overlook the sugar level in the mochi, which is around 20%-25%.

The brand is currently available in most major retailers in the UK and in 28 other markets, with France, Germany and Australia the core ones. Total revenue for Little Moons was £64.5million (€76.15m) in the 18 months ended December 2022, with a £2.6 million (€3.13m) operating profit. International revenue grew 84% in the same year.

Little Moons follows a ‘healthy to indulge’ strategy. This has been a consistently successful strategy for 25 years, in almost every country and category. It’s also a strategy that’s well-suited to dairy, partly because of dairy’s taste and texture advantages and partly because dairy is, still, seen as something natural and healthy by 80% of consumers in most countries. Dairy is also a natural choice for a snack.

Little Moons had the courage to create something genuinely innovative – an entirely new type of ice cream, one that is about pleasure and enjoyment and at the same time is a healthy indulgence because of the snack-sized portions.

Plant-based innovation

In plant-based dairy alternatives, innovation has been almost non-existent. Most companies limit themselves to rolling out yet another oat milk or yet another yogurt with poor nutrition and taste challenges. So, it’s refreshing to see a start-up from Latvia provide one of the very few, genuine plant-based innovations.

The Fermentful brand is a plant-based kefir market with a unique ingredient with roots in Latvia: green buckwheat. The company’s founder, Anda Penka, understood that it was going to be necessary to provide “something that was a bit different” from oat, pea, hemp or almond in order to earn shelf-space in the plant-based segment. So she turned to green buckwheat powder. It contains the full range of essential amino-acids, which is unusual in the plants world where most protein used is low quality, and it’s naturally gluten-free. It also has a neutral taste, which works well with a wide range of ingredients and flavours. And it’s sustainable and grown in Latvia where many farmers grow green buckwheat to give back nutrients to the soil and improve biodiversity.

The company worked with microbiologists, gastroenterologists and nutritionists to establish Fermentful’s probiotic gut health and immune health credentials. The result is a kefir made from fermented green buckwheat, bean protein and cashew nuts. It comes in four flavours: natural, dark chocolate, sea buckthorn and apple/lingonberry/cinnamon. The product is free from gluten, dairy and soy.

The target market is women aged 30-45 and the brand deliberately avoids branding its product as vegan, and aiming instead for a wider market of people who are health-active. Fermentful is available in major retailers in Latvia, including RIMI and Reitan. But Latvia is a small country, with only 1.9 million people, so the brand is also in Estonia and Austria and heading to Poland, Switzerland and elsewhere.

Expansion and aspirations

For product developers in every company the reality is that often they have to focus on launching products that are little different from what is already on the market – yet another spoonable yogurt, yet another dairy drink, yet another ice cream in a 500ml pot – and then rely on marketing and price (and maybe taste) to make them work.

Dairy companies also aspire to create innovations and to build new revenue streams. Little Moons and Fermentful show what you need to do if you want to make a success. First, create a new and interesting experience for the consumer. Do not bore them with yet another spoonable yogurt. Next, ask yourself how you can create a new category, with something clearly different from everything else on the shelf. Avoid a me-too strategy!

Third is to deliver interesting flavours and texture and if you can, make the product snackable. If you can, make it healthier (not necessarily 100% healthy) and at the same time indulgent.

Finally, think beyond your home market. Where else could an innovative product succeed? In what other countries? If you are a Europe-based company, look to take your product to the parts of the world where consumer wealth is growing, such as Dubai, Singapore or wherever. Many dairy businesses, even quite small ones, already do this successfully. As European consumers’ disposable income becomes tighter in the years ahead, looking further afield may be essential.