In response to the damage and overnight transformations due to COVID-19, multiple consumer companies have recently announced cutbacks in their innovation pipeline. These announcements may signal a new era for the consumer packaged goods (CPG) sector, one in which the innovation agenda can escape the endless line extensions of the past several years. The lower-value launches that pervaded prepandemic innovation portfolios have failed to drive meaningful growth or return of investment for many CPGs (Exhibit 1). The average first-year sales for new product pacesetters declined by an astonishing 50 percent between 2012 and 2018. 1 1. Joan Driggs and Larry Levin, New product pacesetters: Product innovation and the pace of change, IRI, May 2019, iriworldwide.com. Innovation will be more important than ever as we move toward the next normal given changing consumer needs and occasions. Companies can rethink their innovation agendas to more efficiently address those needs and drive growth. However, many executives see barriers to boosting innovation performance, including the complexity of multifunctional organizational dynamics and the difficulty of predicting consumer preferences and behaviors. In addition, these innovations seem to be changing faster than ever. Disruption due to the pandemic lends even greater urgency to ensuring that innovation strategies adapt well to changes in consumer needs and retail environments.While challenges exist, they can be overcome. CPG companies can significantly boost the performance of innovation by managing it more strategically, including measuring it more effectively. Understanding the true, incremental, impact of innovation is fundamental to developing a pipeline that delivers on the strategic objectives of the company....

Months after the novel coronavirus was first detected in the United States, the COVID-19 crisis continues to upend Americans’ lives and livelihoods. The pandemic has disrupted nearly every routine in day-to-day life. The extent and duration of mandated lockdowns and business closures have forced people to give up even some of their most deeply ingrained habits—whether spending an hour at the gym after dropping the kids off at school, going to a coffee shop for a midday break, or enjoying Saturday night at the movies.Such disruptions in daily experiences present a rare moment. In ordinary times, consumers tend to stick stubbornly to their habits, resulting in very slow adoption (if any) of beneficial innovations that require behavior change. Now, the COVID-19 crisis has caused consumers everywhere to change their behaviors—rapidly and in large numbers. In the United States, for example, 75 percent of consumers have tried a new store, brand, or different way of shopping during the pandemic. Even though the impetus for that behavior change may be specific to the pandemic and transient, consumer companies would do well to find ways to meet consumers where they are today and satisfy their needs in the postcrisis period.Behavioral science tells us that identifying consumers’ new beliefs, habits, and “peak moments” is central to driving behavioral change. Five actions can help companies influence consumer behavior for the longer term:...