Executive Summary: Incremental innovation is shown as a resource-friendly and consumer-friendly approach to growth. Three innovation strategy examples in coffee discover success with ginseng coffee in Italian coffee shops and uncover opportunity for mushroom and collagen coffee add-ins for US coffee shops and brands.
How to Convince Consumers to Enthusiastically Try Something Brand New
I recently returned from my honeymoon in Italy (what a sentence to write!), and while I was there I had a lot of coffee. Who wouldn’t? It seems like the cappuccinos in Italy are a totally different (and better) drink from the ones we can get in the States.
As I was getting hopped up on all those cappuccinos, something caught my eye: in most cafés in Italy, big or small, they offer what’s called a ginseng coffee, which is basically an espresso with powdered ginseng added to it. Apparently, ginseng coffees became popular in the 2010s, and now they are ubiquitous in Italy.
How Incremental Innovation Inspires Innovation Strategy Examples
This got me thinking: what sort of innovation strategy brings an Asian ingredient to all the small towns in Italy? I didn’t expect something like ginseng to be available in the single coffeeshop open in a tiny town on a Sunday afternoon, and yet, there it was. The answer may have to do with something called incremental innovation.
What’s the Definition of Incremental Innovation?
Incremental innovation means making small changes to existing products, as opposed to reinventing the wheel. This introduction can allow consumers to try a product which is new, yet still recognizable as something they enjoy.
On the side of a brand or a store, it decreases the financial and practical burden of offering a novel product. This is a low-risk way to innovate, as the small changes made to existing products typically require less investment. A classic example of incremental innovation is the way that Coca-Cola introduces new flavors. Ofer Attali explains Cherry Coke as an incremental innovation strategy example:
“the American beverage giant created a new range based on its best-seller by adding cherry flavoring.”
When Coke creates a new flavor, all it needs to do is add some ingredients to its existing products: it does not create a totally new product. Coke can introduce new flavors as frequently as desired, at very little cost.
But What About Coffee? 3 Incremental Innovation Strategy Examples
Moving from cold beverages to hot, we can also find incremental innovation strategy examples from the world of coffee. In this article, we’ll discuss three examples: Italy’s ginseng coffee, and two others you might see on your grocery shelves back here in the United States: the mushroom coffee, and collagen coffee.
All three of these products start with a familiar and popular base (coffee) and add a healthy twist. These incremental innovation strategy examples can provide a template for incremental innovation in the food and beverage world, and beyond.
Incremental Innovation Strategy Examples:
How Did Ginseng Coffee Come to Italy?
Let’s first explain that Italian ginseng coffee. Ginseng coffee seems to have become so widespread in Italy in part because it is an example of incremental innovation for coffee shops.
Cafés can use all their existing equipment to make this new product, just by buying some new ingredients. The process of making a ginseng coffee is not radically different from the process of making a normal espresso. However, the new product is still differentiated from the previous offerings.
Ginseng, long valued in traditional Asian medicine, adds a mild sweetness and a supposed energy boost, giving customers a reason to come back for a slightly different experience. Italians value espresso because of its perceived benefits to digestion, and ginseng also has a reputation as a digestive aid. Ginseng coffee therefore provides a small twist on a standard espresso. Yet adding ginseng has little upfront cost, and requires very little change to the existing workflow of the coffeeshop. I suspect that ginseng coffee took over Italy through the power of incremental innovation.
Incremental Innovation Strategy Examples:
Is Mushroom Coffee Good for You?
Mushroom coffee is our second of three innovation strategy examples. Mushroom coffee taps into some of the same health-consciousness that ginseng coffee does. According to Harvard Health Publishing,
“mushroom coffee is enjoying a moment in the spotlight, with fans of this fungi-infused brew claiming that mushroom coffee’s health benefits include better sleep, more energy, improved focus, immune-boosting benefits, and reduced inflammation.”
In order to enter the coffee shop environment as successfully as ginseng coffee, purveyors of mushroom coffee will need to strategize. In particular, according to Perfect Daily Grind, a coffee trade journal, keeping the principles of incremental innovation in mind could be key to getting mushroom coffee into local coffeeshops:
“café operators need to invest in practical options that baristas can easily add to drinks without disrupting service.”
To make this coffee innovation even more widespread, it is necessary to minimize the disruption it would cause to existing coffee infrastructure.
Incremental Innovation Strategy Examples:
Will Collagen Coffee Make You Feel Younger?
A final innovation strategy example comes in the form of collagen coffee. Collagen is a kind of protein found in connective tissue, and it’s a popular additive in many health products. Its purported benefits include supporting healthy skin and healthy joints, meaning it appeals to both beauty-conscious consumers and those looking to age healthily.
Just like ginseng and mushrooms, because collagen is an additive, it can be used to improve existing products and diversify existing offerings. Writers at the Tea and Coffee Trade Journal note:
“to capitalise on the collagen opportunity, coffee and tea brands might want to strongly consider expanding their brand portfolios and their assortments to include collagen-enhanced beverages.”
What’s the Main Takeaway from Coffee-Inspired Incremental Innovation Strategy Examples?
Inside and outside of the coffeeshop, what seems to be needed is not a total rehaul of coffee, but instead the subtle incorporation of these sorts of healthy ingredients.
While ginseng coffee has already taken the Italian coffeeshop by storm, I have yet to see mushrooms or collagen at Starbucks. Furthermore, in American grocery stores, collagen coffee and mushroom coffee are mostly sold by specialty brands, but in Italy ginseng coffee is available from big brand names like Nespresso.
This represents an untapped opportunity for major players in the coffee world. Because introducing mushrooms or collagen would be an example of incremental innovation, it could be a low-cost way for companies like Starbucks, Peets, and Dunkin Donuts to introduce new product lines both at the café and at the grocery store.
In this article, we’ve seen how incremental innovation can help bring new life to an existing product, and even some untapped innovation strategy examples. If you are curious to learn more about innovation strategy, the experts at Insight to Action can help. Our resources page features more articles about new products, growth strategy, innovation strategy and more. You can also contact us to speak with an ITA team member, or sign up for our newsletter to hear from us on a more regular basis.
