Cover Story - Part II: The Ultimate Support
An inside look at Kraft Foods North America's (KFNA) R&D and quality efforts provides clues as to how one company not only meets these technological challenges, but makes them its own to increase consumer satisfaction and drive business growth.
Structuring “R” and “D”“One of our strengths lies in how we are organized,” says John Ruff, senior vice president of R&D and Quality for KFNA. Ruff oversees Kraft's technology functions including basic research; product, package and process development; quality assurance and scientific relations. “The structure of the R&D and Quality department allows us to operate as a single function, but we also leverage our strengths across the company worldwide.”
Research, or the “R” in R&D, is an integral part of the corporate long-term strategy and is centralized in the Chicago area. “Our core R&D competencies include ingredients, flavor and aroma, preservation, assembly, and package design,” says Ruff. Kraft's acquisition of Nabisco adds strength in baking and forming technologies.
A key tactic, however, is in how the technologies are applied. For example, creating mini versions of Ritz crackers, Oreo cookies and other Nabisco products seems easy, but the company heavily relied on expertise in ingredient as well as baking and forming technologies.
One science-driven product, rising crust DiGiorno Pizza, used Kraft's skills in ingredients, preservation (i.e., modified atmosphere packaging) and forming technology to create a fresh pizza experience for the customer. It reinvented the frozen pizza category, which underwent rapid growth as a result.
Innovative RatiosOrganic acids such as citric, lactic and benzoic acids are commonly found in nature. They vary in their ability to inhibit microbial growth and also as to the types of microorganisms they inhibit. For example, citric acid is a very weak antimicrobial at best, while benzoic, sorbic and proprionic acids are so effective that the FDA regulates them as “preservatives.”
In May, Kraft's Oscar Mayer Foods Division announced a new ingredient technology involving organic acids (or their salts) that retards Listeria growth. For years, sodium and potassium lactate and sodium diacetate have been USDA-approved ingredients used in cured ready-to-eat meats to improve flavor, color and quality. In 1980, Oscar Mayer initiated the use of sodium lactate as an anti-botulism ingredient, which is now a common meat industry practice.
Recently, Kraft Foods researchers determined that a specific combination of sodium and potassium lactate and sodium diacetate in product formulation effectively inhibits Listeria growth. “We have a strong food safety system, which we continuously evaluate and improve, and using these ingredients is yet another step to further improve food safety,” says Rick Searer, president, Oscar Mayer.
Realizing that improving food safety of the processed meat category overall also directly benefits Kraft Foods, the division entered into an agreement with PURAC, America Inc., a supplier of the three compounds, to distribute a CD that provided information on the ingredient technology. The CD is available to the industry without restrictions. Each individual meat company has the discretion to determine how appropriate the technology will be for its manufacturing process.
The “D” in R&D at Kraft is focused more by business sector and, as a result, is somewhat decentralized. For example, Tarrytown, N.Y., has global expertise in desserts and beverages including coffee. The Glenview, Ill. facility concentrates on cheese and meal technologies. Technical prowess in confectionery, snacks and biscuits resides in East Hanover, N.J., while fundamental knowledge in the meat business is based in Madison, Wisc.
The majority of the people at these sites focus on development, says Ruff. However, the top manager at each location also has responsibility for cross-company initiatives, such as organizational effectiveness or new product platforms, with the over 2,000 technical professionals located around the world.
Product Development and EnhancementProduct development itself is a strategic business advantage that Ruff's department brings to Kraft. “In the last year, new products that did not exist five years ago contributed more than $4 billion in revenue to the company,” notes Ruff.
Multi-discipline teams of R&D, marketing, finance and operations are all involved in the early stages of the product development process, in order to set priorities and insure that all are aware of the goals. During the development, hurdles must be passed. That is, evaluations are conducted along the way to determine how successful the new product is likely to be. This helps guarantee that the time being invested by various functions is applied to efforts that will be most successful. As for a new product's time frame…“That is like asking 'How long is a piece of string?'” muses Ruff. “Three months, a year…it depends on the project.”
Another strategic emphasis of R&D involves working with the businesses to improve product quality and consumer satisfaction. For example, formulation and process improvements in Oscar Mayer's ham products, many which have been around for years, produced double-digit growth in the business for the first time in 10 years.
Natural and Healthful“Functional foods” are buzzwords in the food industry today. Ruff, however, doesn't regard them as new phenomena. “C.W. Post (originator of Kraft's Post cereal brand) created a functional food—cereal—100 years ago. It's a trend that evolves and changes shape. We want to add the right nutritional benefits to our products. For example, Kraft Singles with added calcium is a natural extension that makes sense.”
Prerequisites for incorporating a new nutritional ingredient in a formula is that it is safe in the food application, that it is effective and also that is really is a consumer benefit. “We can't justify investment in a short term 'fad of the week,'” says Ruff.
Maximizing ResourcesOne of Ruff's passions is managing resources and he advises, “focus, focus, focus.” Rather than saying you don't have enough resources, it is better to “FBI” (Focus on Big Ideas) to drive the company's future. “No matter how many resources you can harness, you will never have enough. It's a matter of understanding your core strengths and investing in those technologies,” says Ruff. “Also, no matter how brilliant your scientists are, and Kraft has many, it's a matter of how to leverage Kraft's brilliant scientists with brilliant scientists at universities, institutions and suppliers around the world.”
Ruff also advises industry colleagues to maximize relationships with suppliers. “We used to look at cost as a top criterion in supplier selection,” says Ruff. “Now we look to suppliers for consistent quality and for what innovation they can bring to us.” When the tone of the relationship is established, a “best practices” approach is taken where the two companies work together to improve quality and drive out costs. “With key suppliers we have top level managerial meetings to align priorities for the next six to 12 months.”
Food companies also will face changing technological landscapes. How a food scientist fits within that landscape is the subject of a parting piece of advice from Ruff.
“I tell new recruits to first leverage your education and integrate into your new environment. Secondly, leverage the fact that your skills and strengths are different from others. At the end of the day, think, “This happened because of what I could do.”
At the end of the proverbial day, KFNA's R&D and Quality function can similarly contemplate, “This happened at Kraft because of what we could do.”