Cooking at the New Products Conference
During the pre-conference workshop, Scott Lutz, new president of ConAgra's (Omaha, Neb.) snacks group, explained how innovation can be simultaneously easy and difficult: The elements are easy, but sticking to them is hard. Furthermore, the most profound ideas—or the “Big A-ha,” as Lutz termed it—is rarely something totally new. “Usually, it is something you've always known but may have forgotten,” explained Lutz. Innovation is a means of converting this knowledge and key insights into solutions that create a distinct value. Nonetheless, great ideas still may fail if executed improperly, and a company needs to narrow its focus to tap the idealistic motivations. While Lutz recommended that companies develop fewer ideas, he suggested they also should develop those ideas more fully.
Detailing concepts that have been developed to fruition at the foodservice level, Diane Fox with FoodBeat Inc. (Wheaton, Ill.) offered an in-depth look at food items debuting on prominent restaurant menus. Current breakfast options include more indulgent items, and 96 new appetizers were introduced in the first half of this year. Asian and barbecue starters are making headway, with some ethnic influences making their mark. The top three most-menued appetizers (in order) are nachos, wings and quesadillas.
Dishing Up New TrendsRay Sierengowski, corporate research chef and lead scientist of culinary development at Kellogg Co. (Battle Creek, Mich.), noted that social/cultural trends are deeply held, value-based and long-term. In fact, they are so ingrained that they often are unnoticed. In his presentation, “Culinary Trends and Their Impact on New Products,” Sierengowski said that the key for new product developers is to differentiate trends from fads.
Considering that indulging is a part of nearly everyone's lifestyle, Stacey Zawel, president of Zawel Health Collaborative LLC (Martinsville, N.J.) examined an interesting query: “Do Consumers Want Healthy from Your Brand?” As she noted, not everyone is going to eat healthfully all the time, but they will sprinkle healthful items into their eating patterns.
Zawel's Healthy You! syndicated health study asked what attributes consumers want. Healthful foods make sense to consumers and are not a fad, believes Zawel. She described the “Healthy Trivergence” between science, government initiatives and consumers.
Science is advancing continually, as noted in reported studies extolling the virtues of some food options, as well as the benefits that may be found from unexpected sources. The government is taking action to make nutrition information more available, as part of efforts to reduce healthcare spending through disease prevention.
On the consumer front, more-healthful food consumption is on the rise, and some companies see an opportunity. Snapple Beverage Group (White Plains, N.Y.) has made a deal to appear in New York City schools; PepsiCo (Purchase, N.Y.) is looking to make at least half of its new products “nutritious”; and The Schwan Food Co. (Marshall, Minn.) has a new nutritious pizza that reportedly does not forego taste.
Offering an even more in-depth look at the consumer was Tim Straus, principal and marketing officer of The Turover Straus Group Inc. (St. Louis). Describing the Big Bang of food marketing, Straus believes women's changing roles have redefined family. In the process, a shift has occurred in attitudes toward food, use of ingredients and preparation of meals.
While understanding the consumer has its role, Craig Bacon, senior director of foodservice R&D with Tyson Foods (Springdale, Ark.), noted that in foodservice, knowledge of the customer is paramount. He suggested companies do their homework: understand the operations and equipment constraints before new product development commences; know the operator's customers; and as a supplier, deliver added value.
Addressing a similar topic, Bob Wotzak, senior vice president of quality and R&D at Chef Solutions (Schaumburg, Ill.), discussed “Meeting the R&D Challenges of the Foodservice Trade.” A company spends an average of 1% of food sales on R&D, so it is obvious that companies are not planning to buy their way to greatness. That will require creativity, knowing the customer and wisely using resources, he told his audience.
In addition, consumers are looking for a return to comfort items, particularly during certain times of the year. Larry Wu, director of product development, and Tom Barr, director, hot beverage, category management, with Starbucks (Seattle), discussed “Project Mistletoe: The Sweet Kiss of Success.” At the coffee giant, R&D reports to marketing, but the company recognizes that its growth potential rests in R&D. The 2002 Project Mistletoe holiday beverage launch followed an analysis that showed room for the new product on Starbucks' menu. They discovered that consumers are looking for nostalgia and relaxation in a hectic time of year. After examining holiday themes and product ideas, Starbucks initiated product development, leading to the creation of the successful Peppermint Mocha.
Less successful was the Mini-Soft mint concept developed by Cadbury Schweppes, explained Colin Gutteridge, science and technology director for Cadbury Schweppes (Reading, U.K.). Recognizing the need to be more strongly positioned for a new generation of consumers, the company opted to venture into completely new categories, hence the Mini-Soft “soft-eating mint.” Problems arose when a chief competitor raised the bar with a new offering before Cadbury's new product launched. Additionally, its packaging size resulted in fewer of the products being placed on the shelf.
Wrapping Things UpPackaging was one of the elements addressed by James Hastings, vice president of R&D with H.J. Heinz North America (Pittsburgh), during “Maximizing New Products Success.” According to Hastings, consumers dictate Heinz's efforts—innovation, product/package redesigns, value engineering and quality improvements/technical support. Hastings cited EZ Marinader, which entered a $150 million and growing market. This area had many brands but not one dominant product, and Heinz saw an opportunity to innovate. Consumers like their meats marinated, Heinz discovered, but hate the mess and inconvenience. Ultimately, though, testing told Heinz that the flavor, not the pouch, would drive repeat purchasing.
Taking a look at the latest launches, Lynn Dornblaser and Dave Jago, both directors of GNPD Consulting Services (Chicago), noted that recent new-product activity shows a 38% growth in snacks; 28% growth in fruits/vegetables due to some value-added packaging; and a 25% growth in beverages.
Investigating products introduced over the last year or so and making “The Supermarket Bestsellers List,” Valerie Skala, vice president of analytic product management and development with Information Resources Inc. (Chicago), noted that 973 new food and beverage products were introduced in 2001-2002, and of these, 229 exceeded $7.5 million in first-year sales. Among the 2003 top sellers have been Vanilla Coke, Pillsbury Home Baked Classics, Slim Fast, Meal on the Go, Oreo Double Delight, Bacardi Silver and Skyy Blue.
Skala recommended that developers adhere to several trends currently affecting the food industry: bite-sized pieces; resealable packaging; more healthful versions of favorites; and “Five a Day” (five to nine servings daily) of fruits and vegetables—with labels stressing their importance.
Steven Steinborn, partner with Hogan & Hartson LLP (Washington), discussed labeling during his examination of “Minimizing Product Liabilities at the Product Development Stage: The Consequences of Unintended Outcomes.” Steinborn suggested caution with ingredients—some may not be permitted in foods, even though they are used in supplements or herbals, while some ingredients used in other countries may not be permitted in the U.S. Furthermore, a health-related claim requires proof, while a taste claim requires consumer verification.
Reflecting upon a trend that has gained prominence in product introductions over the past several months, Steinborn noted that low-carb is a claim that should be defined by the government. Interestingly, the government has not yet offered a definition.
The Counsel of EldersBrian Urbick, director of the Consumer Knowledge Centre (Middlesex, U.K.), shared “Lessons Learned: Young People and Prime Timers,” offering a comparison of the attitudes of young teens and Prime Timers (senior citizens) toward food. Children are not only the adult consumers of tomorrow; they already influence nearly $200 billion in U.S. food purchases.
An important thing to remember about children, Urbick believes, is that they are neophobic—afraid of new food. However, familiarity breeds a liking, he has found, and 10-15 positive exposures can result in liking.
Similarly, Prime Timers' food choices are driven by a preference for the familiar, and their comments indicated an opportunity to bring “real” food values back to processed food. Urbick has found two major sectors of Prime Timers: one is the group physically and mentally involved in life. The other is mentally involved and think of themselves as older and less physically able, but may face too many brand choices, particularly if the packaging of the products they use has changed over the years.
While young teens and Prime Timers comprise a sizable market, a hidden Baby Boom may be poised to alter the landscape of America's supermarkets. In describing “The New Baby Boom: Hispanic Trends,” Marcia Mogelonsky, consumer analyst (Ithaca, N.Y.), noted that the new Baby Boom (comprising the children of Baby Boomers and early Generation Xers) is more ethnically diverse—almost 62% of this group is classified as non-Hispanic White. Currently, 12.5% of the population is Hispanic, making it the largest ethnic group in the U.S. The presence of Hispanics is increasing across the country: 81% more Hispanics in the Midwest in 2000 versus 1990, 40% more in the Northeast. As a whole, she predicts, they will comprise 52.5% of the population by 2050.
Hispanic households buy and eat more bakery and cereal products than their American counterparts. Bolillos and pan dulces (freshly baked) rival tortillas as examples of major bread products in grocery stores frequented by Hispanics. Mogelonsky said Hispanics' biggest influence to now has been Tex-Mex cooking. However, authentic Hispanic foods and beverages are still ripe for exploitation and discovery.
The 2004 New Products Conference will be held at the Fairmont Princess Resort in Scottsdale, Ariz., from October 10-13, 2004. For more information, contact Marge Whalen at firstname.lastname@example.org or 630-694-4347.
Sidebar: The Fab FiveDornblaser and Jago noted five big trends expected to have increasing impact over the next five years.
1. Natural versus organic: Natural is a U.S. phenomenon; organic is more of an EU issue, noted Jago.
2. Authenticity: This can mean authentic ethnic, which is likely to grow in the U.S., particularly in Indian food.
3. Think globally, act locally. Frito-Lay Crispy Rice Seaweed snack in Thailand; Doritos topped with tomatoes and turkey seed in Turkey. Teriyaki Pringles in Japan—products tailored for local markets.
4. A disregard for current categories: For instance, Raging Cow could be a milk, a carbonated soft drink, or a refreshment beverage.
5. Brand leverage: Lunch Specials are Lunchables for adults but without that brand name. In addition, a pasta salad kit in clubstores uses the DiGiorno pizza/pasta brand. In the U.K., Sainsbury's has multi-faceted private label offerings.
Sidebar Setting the StyleStraus also defined food-style—the reason consumers prefer a particular product, their thinking and values regarding food—and its four components:
1. Confidence and skill: Many do not have confidence in their cooking abilities. This affects their food and ingredient selections.
2. Interest in cooking: Some do not enjoy preparing meals,
but feedback from others also plays a role in their appreciation of cooking.
3. Time availability and schedules.
4. Values of “good” food: Nutritional considerations; interest in organic foods; where the consumer shops; packaging systems; and placement of food items in the store.