OpenIX, the Open Innovation Platform of the Innovation Hub in Pretoria, is currently running a challenge in the chemicals and packaging technology FMCG industry on behalf of a large competitor that offers a range of FMCG products to higher LSM categories in Sub-Saharan Africa.
The competitor is seeking new or radically different technological approaches to existing aerosol-type liquid dispensers to significantly reduce the costs associated with such products and thereby establish a profitable market position in the low LSM category.
Challenge Owner: Anonymous
Business Opportunity: Development or supply of an alternative to existing aerosol-type liquid dispensers that offers significant cost reduction in the final FMCG product
Technology Maturity: Solutions must have completed the scientific research phases, with a predictable and stable short to medium-term development framework, so as to enable market rollout in two to three years
Reward: Opportunities for procurement, outright rights purchase, joint venture or licensing agreement.
Develop or supply an alternative solution for the dispensing of liquid in FMCG-type products, (e.g. paints, drugs, cosmetics, insecticides etc.) currently performed using aerosol delivery mechanisms, where the alternative offers significant cost reductions in the final product (> 50 per cent).
Existing aerosol delivery mechanisms used in the application of paints, drugs, cosmetics, insecticides and other liquid-based FMCG products, are at a significant price disadvantage in emerging economies, such as Sub-Saharan African markets, due largely to substantial costs associated with packaging material – such as aluminium cans, glass and plastics – as well as the fabrication and assembly of such delivery mechanisms. In such emerging markets, these products are typically targeted at higher LSM FMCG consumers with raw material and components mostly imported.
The current approach to aerosol-based delivery of a liquid payload aims to produce a mist at a constant pressure over a predetermined application distance, both of which are essential in ensuring that the liquid can be dispensed in line with the final product attributes. Examples of such end-product attributes include the need for liquid to dry before hitting the surface so as to avoid running (e.g. spray paint from a hand-held canister), or the need for specific aroma characteristics to be experienced by the user in the application of fragrances (e.g. deodorants).
FMCG products utilising aerosol delivery mechanisms account for a marginal portion of sales in emerging markets, with packaging and supply chain costs the primary barriers to entry. Simply put – there is a viable market opportunity for a range of existing aerosol-type products in said markets, but that opportunity is currently not addressable in the low income LSM category due to the extent of packaging and supply chain costs
The successful solution shouldn’t detract from the normal product attributes associated with aerosol-based FMCG products, to ensure rapid market access based on utilising known product benefits and applications, and extend existing brand credibility present in higher LSM segments.
To achieve this, the successful solution should:
- Fit within the norms and expectations of existing and related FMCG liquid aerosol-based products known to the market;
- Enable easy labelling, packaging and distribution within the low LSM category in emerging markets, which may include informal traders (e.g. spaza shops), convenience stores, etc.;
- Enable clear brand positioning, communication and visibility so as to compete with other products without detracting in terms of consumer expectations in respect of quality and affordability;
- Address all applicable regulatory and statutory requirements related to FMCG products for human use, which includes requirements pertaining to labelling, packaging and distribution, as well as use of components, technologies and/or substances that are safe and appropriate for human use;
- Achieve a final product, at a significantly reduced overall cost, that still retains the minimum brand credibility and perception associated with aerosol-type FMCG products, to serve as a platform for ongoing, medium to long term brand extension into low LSM segments;
- Ideally improve, but at least meet minimum regulatory and statutory requirements, as well as consumer perceptions pertaining to environmental sustainability.
Potential cost reductions are deemed achievable through the following main avenues:
- Enabling radical changes in packaging such as eliminating the need for pressurised containers (typically steel or aluminium canisters) by replacing the gas-based propellant with a different dispensing method that achieves the same net effect;
- Using a technology or substance not currently known to the market in combination with existing aerosol dispensing methods and/or existing payload delivery technologies that can minimise the cost of the delivery mechanism or reduce the amount of payload to be dispensed through an improved user experience (e.g. using encapsulated aromas in deodorants or food that can increase the olfactory experience);
- Through an entirely novel way for reducing the cost of payload storage and delivery which could include proposals for bulk refill packaging or combining the application of the liquid with other products (e.g. mixing insecticides with floor cleaning products);
- Through the introduction of different manufacturing, product distribution and/or supply chain practices that will significantly expand market access to low LSM categories and/or reduce the costs of manufacturing, distribution and/or supply chain practices.
Solutions not of interest
- Products that don’t align with existing brand characteristics that would in effect require extensive and costly brand positioning to create new brand awareness, product understanding and ultimately, brand credibility.
- Products that include substances, mechanisms, materials or other aspects that don’t comply with the regulatory, statutory or related standards applicable to FMCG products for human use.
The following criteria will be used to evaluate submissions:
- The scientific, technical merit and the ability of the proposed solution to meet the stated specifications;
- The relative cost-effectiveness of the proposed solution;
- The relative ease of use of the proposed solution;
- The ability of the respondent to work successfully in a team with the Challenge owner’s staff;
- The capability and experience of the respondent and associated track record;
- Two to three years to commercialise.
Phase 1 – Technical evaluation of potential solution/s (two to three months)
Phase 2 – Business case and commercial readiness planning and negotiation (six months, potentially/partially in parallel with Phase 3)
Phase 3 – Development and trial/piloting of potential solution, including testing and developing commercialisation options (protecting and exploiting IP, including licensing development) (six to 12 months)
Phase 4 – Trial/pilot evaluation (one to two months)
Phase 5 – Solution acquisition and rollout
To respond to this challenge, please complete the response template online at www.openix.theinnovationhub.com.
Disclaimer and non-confidential disclosure
By submitting a response, you represent that the response does not and will not be deemed to contain any confidential information of any kind whatsoever. TIHMC and its project partners will not be held liable for loss of any IP. You also acknowledge that TIHMC and its project partners reserve the sole and absolute right and discretion to act upon all, some, or none of the responses received for this challenge.
Deadline: 9 September 2014
Helpdesk: Jonathan Muringani
Phone: +27 (0)12 844 0671