- At-home product testing company Highlight raised $18 million in Series A funding, led by Acre Venture Partners and HearstLab. Highlight has raised more than $30 million so far.
- The company, which streamlines the product testing process for CPG companies such as Nestlé, Kraft Heinz and Mondelēz International, said the money will be used to grow the business and hire additional employees.
- As food and beverage companies look to accelerate their pace of innovation, product testing has become an important part of the research and development process.
With 90% of the 30,000 new CPG products launched every year failing, Highlight is aiming to help companies reduce this rate and save millions of dollars.
Highlight, which said it more than tripled its sales in 2022 from the prior year, estimated it has worked with hundreds of brands and tested thousands of products.
A valuable tool for CPG businesses, product testing helps companies try out and refine products before deciding whether and how to launch them in the marketplace. Highlight sends the products out on a company’s behalf from a preapproved list of more than 20,000 people and uploads the consumer feedback.
Product testing is a $24 billion market, the company estimated. Highlight’s goal is to automate the product testing process so that brands can recruit product testers, ship products and collect and analyze data in one place. Performing product research currently involves multiple vendors, several hundred emails, many months and tens of thousands of dollars, the company told TechCrunch.
As food manufacturers scramble to remain competitive, innovate faster and meet consumers’ insatiable demand for new tastes and experiences, changing how they go about testing may increase the likelihood that a product succeeds — enabling corporations to earn more revenue while saving valuable time and resources.
Highlight noted that online user research has “transformed” in recent years, but the tools and processes available to physical product developers, such as testing through focus groups, remain largely the same as they did more than 40 years ago.
“Physical product companies face many challenges to understanding customer needs and collecting critical feedback to create exceptional, enduring products,” Dana Kim and Ethan Kellough, Highlight’s founders, said in a blog post. “We’ve felt the pain firsthand — spending far too many hours recruiting specific audiences, combing through fraudulent panelist lists, programming and reprogramming surveys, ensuring the assembly and delivery of shipments, and manually managing this clunky process from end-to end.”
Some companies have already changed how they go about testing their products.
Conagra Brands, whose portfolio includes products such as Healthy Choice and Banquet, decided a few years ago to abandon traditional product testing and market research in favor of buying huge quantities of behavioral data. Executives were convinced the data could do a better job of predicting eventual product success than consumers sitting in an artificial setting offering feedback.
Other companies such as Ferrara have used online communities to see how people react to products, including those from competitors, that are sent to them. Ferrara also had people either video record themselves shopping or write down their experience.