Kraft seeks disruptive innovation

23 February 2011

NORTHFIELD, Illinois: Kraft, the US food group, is entering a new product category for the first time in over a decade, having developed an innovative "liquid water enhancer".

The owner of Oreo and Kool-Aid is launching MiO into a market worth approximately $1bn (€731m; £619m) annually at present.

MiO, named for the Italian word for "mine", offers flavours like Berry Pomegranate and Strawberry Watermelon in teardrop-shaped bottles.

Each unit will cost $3.99, and could make roughly 24 servings depending on the amount customers add to a glass of water.

MiO, conceived during an "innovation day" in 2010, should officially be introduced in the US next month.

It marks a step-change for Kraft, which last pursued such a disruptive initiative around 15 years ago, and is expected to become one of the largest rollouts in Kraft's history.

DiGiorno Rising Crust pizza was the most recent similar effort from the company, hitting stores in 1995.

The target audience for MiO is the 18-39 year old demographic, with an emphasis on personalisation and experiences.

"This is the next big thing," Roxanne Bernstein, MiO's brand director, told USA Today. "It's an entirely new category."

Focus group feedback regarding the latest addition to Kraft's portfolio has been highly positive, Liza Laibe, the organisation's senior brand R&D manager, beverages, revealed.

"Consumers tell us they can't believe nobody has thought of this before," she said.

Capella Flavours currently manufactures over fifty enhancer variants for water, coffee, tea and protein shakes, all of which are free from fat, calories, carbohydrates and sweeteners.

While its Capella Drops lack the potential support Kraft can provide for MiO, the company hopes health benefits might yield a competitive advantage.

"The little guys are taking this concept and doing it right," said Tom Cangley, co-founder of Capella Flavors.

Lynn Dornblaser, Mintel's director, innovation and insight, predicted MiO may be particularly popular with women, as was the case concerning Crystal Light powdered beverage mix.

Dornblaser also sounded a note of caution, however.

"How many different ways do consumers need to change a plain bottle of water?" she asked.

Data sourced from USA Today; additional content by Warc staff