Micro-Innovation in FMCG: How Small Changes Can Lead to Big Wins
Debbie Morrison • May 28, 2023

In the fast-paced world of Fast-Moving Consumer Goods (FMCG), innovation is the lifeblood of success. Companies constantly strive to bring new and exciting products to market, but often, the focus is on grand, game-changing innovations that promise revolutionary outcomes.


While these transformative breakthroughs certainly have their place, it's important not to overlook the power of micro-innovation - the small, incremental changes that can lead to significant gains. In this article, we will explore the concept of micro-innovation, why small gains (and small failures) can be advantageous, and why it is crucial to look for leaders who embrace these qualities when hiring.



What is Micro-Innovation?

Micro-innovation can be defined as the process of making small, incremental improvements or adjustments to existing products, processes, or services. It involves identifying and addressing pain points, inefficiencies, or areas for enhancement on a micro level. Instead of reinventing the wheel, micro-innovation focuses on fine-tuning the existing systems and processes to drive continuous improvement.


Consider the example of a leading FMCG company that manufactures bottled beverages. While a grand innovation may involve developing a completely new line of beverages with unique flavours and packaging, micro-innovation could involve small changes in the formulation, packaging design, or even the cap mechanism of an existing product. These small adjustments may seem inconsequential at first glance, but they can make a substantial difference in terms of customer satisfaction, operational efficiency, and ultimately, financial success.


Small Gains: The Power of Marginal Improvements

One might argue that seeking small gains is not as exciting as pursuing radical breakthroughs, but overlooking the power of marginal improvements would be a grave mistake. In fact, numerous success stories demonstrate how small gains can lead to big wins.


Take the example of Toyota, a company renowned for its continuous improvement philosophy. The concept of "
kaizen," which means "change for the better," lies at the heart of Toyota's success. By encouraging every employee to contribute to small improvements in their daily work, Toyota has achieved remarkable results. Over time, these incremental changes add up, leading to enhanced quality, increased efficiency, and reduced costs. By embracing micro-innovation, Toyota became one of the world's leading automotive manufacturers.


Similarly, in the FMCG industry,
Procter & Gamble (P&G) is known for its commitment to micro-innovation. P&G's researchers and scientists constantly work to make small, incremental improvements to their products, from laundry detergents to skincare solutions. These micro-innovations might include optimising the ingredients, refining the packaging, or enhancing the user experience. By focusing on small gains, P&G has built a portfolio of household brands that consistently deliver value to their customers.


Small Failures: Lessons in Innovation

While the concept of small gains is enticing, it is essential to recognize that micro-innovation is not a guaranteed path to success. Small failures are an inevitable part of the innovation process, but they can also be advantageous if approached with the right mindset.


Failure is often viewed as a taboo in corporate culture, with a focus on avoiding mistakes at all costs. However,
embracing small failures as learning opportunities can foster a culture of innovation and growth. When leaders encourage their teams to experiment, take calculated risks, and learn from failures, they create an environment that promotes continuous improvement.


One of the most famous examples of learning from failure comes from Thomas Edison, the inventor of the electric light bulb. When asked about his numerous failed attempts, he famously responded, "I have not failed. I've just found 10,000 ways that won't work." Edison's persistence and willingness to embrace small failures ultimately led to the breakthrough that revolutionised the world.


In the FMCG industry, the concept of embracing small failures is exemplified by companies like Coca-Cola. Despite being a global beverage giant,
Coca-Cola has had its fair share of unsuccessful product launches. One notable example is the introduction of "New Coke" in 1985, which was met with strong consumer backlash. Rather than retreating and abandoning the idea of innovation altogether, Coca-Cola listened to its customers, quickly acknowledged the failure, and reintroduced the classic formula as "Coca-Cola Classic." This strategic move not only helped the company regain consumer trust but also demonstrated the power of learning from small failures and adapting accordingly.


Leaders Who Embrace Micro-Innovation: A Valuable Asset

In a rapidly evolving business landscape, leaders who embrace the concepts of micro-innovation, small gains, and small failures are invaluable assets to any organisation. They possess the vision to recognize the potential in incremental improvements and the resilience to learn from setbacks. When hiring, it is crucial to seek out these qualities in potential leaders.


First and foremost, leaders who champion
micro-innovation have a keen eye for detail. They understand that success lies in the fine-tuning of existing systems and processes, rather than solely relying on big, disruptive changes. Their ability to identify areas for improvement on a micro level allows them to make calculated adjustments that have a significant impact on overall performance.


Furthermore, leaders who embrace
small gains possess a growth mindset. They see failures not as roadblocks, but as stepping stones to success. Their openness to experimentation and willingness to learn from setbacks create a culture of continuous improvement within their teams. They inspire others to think creatively, take risks, and pursue innovation, knowing that even small steps forward can lead to significant breakthroughs.


Consider the case of
Satya Nadella, the CEO of Microsoft. Since taking the helm in 2014, Nadella has been a strong advocate of micro-innovation within the company. Under his leadership, Microsoft has shifted its focus towards cloud computing and subscription-based services, making small, strategic changes to its business model. This approach has resulted in remarkable growth and profitability for the company, propelling it to the forefront of the technology industry.


In addition to their attention to detail and growth mindset, leaders who embrace micro-innovation are exceptional collaborators. They understand the importance of engaging diverse perspectives and fostering cross-functional teamwork to drive innovation. By encouraging employees from various departments to contribute their insights and ideas, these leaders create a culture of collaboration that fuels continuous improvement.


When hiring, it is crucial to assess candidates not only for their technical skills but also for their ability to embrace micro-innovation and lead others in doing so. Look for individuals who have a track record of implementing small, impactful changes, who are not afraid to take risks and learn from failures, and who inspire collaboration and creativity within their teams.


While grand innovations may capture headlines and attention, the power of micro-innovation should not be underestimated. Small gains and small failures play a vital role in driving continuous improvement and long-term success in the FMCG industry. Leaders who embrace these concepts possess the vision, resilience, and collaborative spirit necessary to navigate the complex landscape of innovation. By prioritising micro-innovation and seeking leaders who embody its principles, organisations can unlock the potential for significant wins and stay ahead in a competitive market.


So, the next time you consider innovation strategies for your FMCG company, remember the profound impact of small changes. Embrace micro-innovation, encourage small gains, and learn from small failures. In doing so, you'll be paving the way for remarkable success and solidifying your position as an industry leader.


By John Elliott June 26, 2025
You don’t hear about it on the nightly news. There’s no breaking story. No panic. No protests. Just rows of vegetables being pulled out of the ground with no plan to replant. Just farmers who no longer believe there’s a future for them here. Just quiet decisions — to sell, to walk away, to stop. And if you ask around the industry, they’ll tell you the same thing: It’s not just one bad season. It’s a slow death by a thousand margins. 1 in 3 growers are preparing to leaveIn September 2024, AUSVEG released a national sentiment report with a statistic that should have set off alarms in every capital city: 34% of Australian vegetable growers were considering exiting the industry in the next 12 months. Another one-third said they’d leave if offered a fair price for their farm. Source: AUSVEG Industry Sentiment Report 2024 (PDF) These aren’t abstract hypotheticals. These are real decisions, already in motion. For many, it’s not about profitability anymore, it’s about survival. This isn’t burnout. It’s entrapment. Behind the numbers are people whose entire identity is tied to a profession that no longer feeds them. Many are asset-rich but cash-poor. They own the land. But the land owns them back. Selling means walking away from decades of history. Staying means bleeding capital, month by month, in a system where working harder delivers less. Every year, input costs rise, fuel, fertiliser, compliance. But the farmgate price doesn’t move. Or worse, it drops. Retail World Magazine reports that even though national vegetable production increased 3% in 2023–24, the total farmgate value fell by $140 million. Growers produced more and earned less. That’s not a market. That’s a trap. What no one wants to say aloud The truth is this: many growers are only staying because they can’t leave. If you’re deep in debt, if your farm is tied to multi-generational ownership, if you’ve invested everything in equipment, infrastructure, or land access, walking away isn’t easy. It’s a last resort. So instead, you stay. You cut your hours. Delay maintenance. Avoid upgrades. Cancel the next round of planting. You wait for something to shift, interest rates, weather, prices and you pretend that waiting is strategy. According to the latest fruitnet.com survey, over 50% of vegetable growers say they’re financially worse off than a year ago. And nearly 40% expect conditions to deteriorate further. This isn’t about optimism or resilience. It’s about dignity and the quiet erosion of it. Supermarkets won’t save them, and they never planned to In the current model, supermarket pricing doesn’t reflect real-world farm economics. Retailers demand year-round consistency, aesthetic perfection, and lower prices. They don’t absorb rising input costs, they externalise them. They offer promotions funded not by their marketing budgets, but by the growers’ margins. Farmers take the risk. Retailers take the profit. And because the power imbalance is so deeply entrenched, there’s no real negotiation, just quiet coercion dressed up as "category planning." Let’s talk about what’s actually broken This isn’t just a market failure. It’s a policy failure. Australia’s horticulture system has been built on: Decades of deregulated wholesale markets Lack of collective bargaining power for growers Retailer consolidation that has created a virtual duopoly Export-focused incentives that bypass smaller domestic producers There’s no meaningful floor price for key produce lines. No national enforcement of fair dealing. No public database that links supermarket shelf price to farmgate return. Which means growers, like James, can be driven into loss-making supply contracts without ever seeing the true economics of their product downstream. But the real silence? It’s from consumers. Here’s what no one wants to admit: We say we care about “buying local.” We say we value the farmer’s role. We share those viral posts about strawberries going unsold or milk prices being unfair. And then we complain about a $4 lettuce. We opt for the cheapest bag of carrots. We walk past the "imperfect" produce bin. We frown at the cost of organic and click “Add to Cart” on whatever’s half price. We’re not just bystanders. We’re part of the equation. What happens when the growers go? At first, very little. Supermarkets will find substitutes. Importers will fill gaps. Large agribusinesses will expand into spaces vacated by smaller players. Prices will stay low, until they don’t. But over time, we’ll notice: Produce that travels further and lasts less. Fewer independent growers at farmer’s markets. Entire regions losing their growing identity. National food security becoming a campaign promise instead of a reality. And when the climate throws something serious at us, drought, flood, global supply shock, we’ll realise how little resilience we’ve preserved. So what do we do? We start by telling the truth. Australia is not food secure. Not if 1 in 3 growers are planning to exit. The market isn’t working. Not when prices rise at the shelf and fall at the farmgate. The solution isn’t scale. It’s fairness, visibility, and rebalancing power. That means: Mandating cost-reflective contracts between retailers and suppliers Enabling collective bargaining rights for growers Building transparent data systems linking production costs to consumer prices Introducing transition finance for smaller producers navigating reform and climate pressure And holding supermarkets publicly accountable for margin extraction But more than anything, it means recognising what we’re losing, before it's gone. Final word If you ate a vegetable today, it likely came from someone who’s considered giving up in the past year. Not because they don’t care. But because caring doesn’t pay. This isn’t about nostalgia. It’s about sovereignty, over what we eat, how we grow it, and who gets to stay in the system.  Because the next time you see rows of green stretching to the horizon, you might want to ask: How many of these fields are already planning their last harvest?
By John Elliott June 20, 2025
If you're leading an FMCG or food manufacturing business right now, you're probably still talking about growth. Your board might be chasing headcount approvals. Your marketing team’s pitching a new brand campaign. Your category team’s assuming spend will bounce. But your customer? They’ve already moved on. Quietly. Like they always do. The illusion of resilience FMCG has always felt protected, “essential” by nature. People still eat, wash, shop. It’s easy to assume downturns pass around us, not through us. But this isn’t 2020. Recessions in 2025 won’t look like lockdowns. They’ll look like volume drops that no promo can fix. Shrinking margins on products that no longer carry their premium. Quiet shelf deletions you weren’t warned about. The data’s already there. According to the Australian Bureau of Statistics, consumer spending is slowing in real terms , even as inflation eases. The Reserve Bank confirmed in May: household consumption remains subdued amid weak real income growth . And over 80% of Australians have cut back on discretionary food spending , according to Finder. They’re still shopping, just not like they used to. A managing director at a national food manufacturer told me recently: “We won a new product listing in April. By July, it was marked for deletion. The velocity wasn’t there, but neither was the shopper. We’d forecasted like 2022 never ended. Rookie mistake.” That one stuck with me. Because I’ve heard it before, just in different words.