Consumer packaged goods companies are under constant pressure to adapt to shifting market demands and consumer expectations. Traditional innovation models, where teams work in isolation, hinder the ability to respond quickly. To stay competitive, CPG companies must rethink their approach to innovation.

A local innovation hub is the solution: an environment where internal teams, external partners, and even consumers collaborate to create products that resonate with global audiences.

The innovation challenge in consumer goods

CPG companies are facing increasing competition from agile brands that can respond quickly to market changes. However, many large CPG companies are still burdened by siloed teams, where brand divisions rarely collaborate and R&D is disconnected from consumer feedback. This approach delays product development and hampers the ability to meet evolving consumer needs. According to a BCG survey, 79% of CPG executives see innovation as a top priority, but internal barriers still prevent them from achieving their goals. The result is a lack of speed and market fit. Moreover, CPG companies struggle to engage with startups and the broader tech ecosystem, where the gap between innovative technologies, consumer demand, and production capabilities remains wide. These technologies and research lack the real-world testing and production infrastructure required to move from concept to market-ready solutions.

 The challenge is clear: CPG companies need to overcome internal and external silos and move faster to stay relevant in an ever-changing market.

The role of local innovation hubs in global product development

A local innovation hub creates the conditions necessary for rapid, cross-functional collaboration. These hubs bring together internal teams (R&D, Marketing, Operations, consumer insights), external partners (startups, universities, research institutions), and consumers in a shared space. Rather than working in isolation, brand teams, R&D scientists, and external collaborators are encouraged to work side by side, facilitating the flow of ideas across functions and categories.

In these hubs, teams have access to the tools they need to move from concept to prototype quickly. Open workspaces, testing kitchens, and pilot production lines enable real-time feedback from both colleagues and consumers. This collaborative environment is ideal for addressing challenges that demand diverse expertise, such as sustainability, packaging innovation, or new ingredient formulations.

By fostering collaboration between different divisions, CPG companies can tap into new ideas that would not emerge in traditional R&D settings. For example, a startup developing a novel ingredient or packaging material could work side by side with the company’s product and R&D teams to co-develop a market-ready solution. This type of real-time collaboration allows both sides to iterate quickly, align on consumer needs, and bring forward innovations that neither could deliver alone.

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Innovation hubs delivering business results

Leading companies are already seeing significant business impact from their investment in innovation hubs. Nestlé’s Accelerator in Lausanne, Switzerland, is an example of a successful model. The accelerator allows startups and Nestlé’s teams to co-create products using state-of-the-art R&D facilities. The accelerator program has tested over 80 products in real market conditions, helping Nestlé launch plant-based food products that meet consumer demand.

Unilever’s Hive in the Netherlands also demonstrates the value of a collaborative innovation environment. Strategically located near the company’s manufacturing plant and embedded in the foodtech epicenter of the Netherlands, it offers close proximity to key stakeholders including researchers, startups, and consumers. By bringing together product teams, scientists, and external partners in one location, Unilever accelerates the development of new food concepts that align with shifting consumer preferences. This setup strengthens the link between product development, production, and market relevance, helping the company stay ahead of trends and make informed decisions faster.

Another notable example is MISTA, a food innovation hub created by Givaudan. This 7,000 square-foot facility in San Francisco brings together CPG giants like Danone, Mars, and Ingredion to work alongside startups on projects such as sustainable packaging and alternative proteins. By sharing resources and knowledge, these companies are addressing industry challenges together, accelerating progress toward sustainable solutions.

Why now is the time for innovation hubs

Local innovation hubs are becoming a practical priority for CPG companies looking to improve how they develop, test, and scale new products. Consumer expectations are evolving, and CPG companies must innovate faster to meet these demands. A physical hub that allows for continuous feedback from consumers and external partners ensures that products are aligned with market needs. With rapid shifts in consumer trends, the ability to iterate quickly and experiment is essential. Innovation hubs create the environment for this agility.

Additionally, the rise of regulatory pressure on sustainability and health standards makes collaborative innovation more important. For example, the EU Packaging and Packaging Waste Regulation is raising the bar for recyclability and reuse. CPG companies that embrace external expertise and feedback will be better equipped to meet new regulations and address complex challenges such as waste reduction and supply chain adaptation.

Outlook for the future of collaborative innovation

Looking ahead, the role of innovation hubs will only grow. The integration of digital and physical collaboration will become more prominent, allowing teams to gather insights remotely and integrate them into the development process. As CPG companies expand their networks of innovation hubs globally, they will be able to collaborate on a larger scale, sharing knowledge across regions and categories.

The future of CPG innovation will involve creating products in partnership with consumers, not just for them. This ongoing collaboration will allow companies to stay ahead of emerging trends and develop solutions that truly meet market demands.

How SOSA helps companies lead in CPG innovation

For CPG companies looking to develop a co-creation hub, SOSA offers end-to-end support grounded in global experience. We help identify high-impact opportunities and the stakeholders needed—whether it’s scouting startups, connecting with research institutions, or engaging consumer communities for feedback.

Through our global network of startups, research institutions, and technology partners, SOSA ensures that CPG companies have access to the latest innovations that can enhance their product development process. We bring best practices from leading innovation hubs worldwide to help companies design spaces that foster collaboration and generate real business value.

SOSA empowers CPG leaders to stay ahead of the curve by embedding the collaborative innovation mindset that is essential for success. Whether accelerating product development or introducing disruptive technologies, SOSA ensures that your company has the right resources and partnerships to lead the next era of CPG innovation.

Get the full picture: Insights from our latest report

Understanding how to balance incremental, sustaining, radical, and disruptive innovation is critical for long-term success. Our latest report explores how leading CPG companies are leveraging open innovation to stay competitive in a rapidly evolving landscape.

• How companies using open innovation models see 33% higher revenue growth
• Why 95% of executives say consumer demands are shifting faster than they can adapt
• The key technologies shaping the next decade of CPG

Download the full report now and discover how open innovation can transform your business.