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Why SPC needs to Innovate or Die

Source: 7News Government denies funding to SPC

If you’ve been following the news recently you would have heard the Government has pulled the pin on Coca-Cola Amatil’s bid for $25M in federal funding to support a restructure of SPC Ardmona operations. The rejection of this funding also means that $25M pledged by the state government will also not go ahead.

The government has made claims that the resources available within the Coca-Cola Amatil organisation should be adequate to enable a restructure that will enable SPC to remain competitive. David Gonski, chairman of CCA says ” SPC have made efforts including some new packaging and clever marketing but they need more money.”

I’m saying “is that really what’s needed?”

Is it really?

The short answer is no, well yes and no…

Disclaimer: I’m going to steer away from Union conditions and wages for this discussion and instead focus on innovation!

SPC has evolved over time, thats true. And they have developed some innovative new packaging, thats great. But as we are aware, sustainable innovation means that eventually our product will exceed consumers expectations and become a premium service. Lower priced, disruptive competitors will take our place within that segment and we need to move our product to the next market.

In SPC’s case that means that the days of picking fruit and putting it into a can is over. Sure you can augment the product with awesome packaging but at the end of the day the product has run it’s lifecycle. SPC needs to take their product upmarket, appeal to the growing organic and health premium segment and take advantage of the predicted growth sector in Australian Agribusiness.

SPC needs to take their product upmarket

This will require innovation of course. SPC will first need to review it’s business model to understand how they deliver the new product at a profit. That means product innovation, what does that new market segment want? They will also need to innovate in the supply chain, it’s critical that growers understand what’s required from them. I’ve recently heard local grower Ross Turnbull comment that “new packaging means that we have an innovative culture”.

That’s almost ridiculous as this statement regarding the new pop-tarts. Unfortunately that’s the real result of the word innovation being mis-used and not widely understood!

As advocates of innovation know, the more types of innovation (there are actually 10+) that SPC can incorporate into this restructure, the greater their chances of succeeding in the market. The bottom line is that unless SPC decides to do more then shut a few plants and put some pretty packaging around it’s product, the company will die a slow horrible death.

This has been an overly simplistic summary and only based on what I’ve seen and read in the media. Obviously SPC and Coca-Cola will have plans which may or may not include the opinions I have expressed above which have been biased based on my expertise in Innovation – Simon Maselli

I’d love to hear your comments below and make sure you share this on social media.

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