While most companies strive to bring innovative food products to market, the reality is that the majority of new introductions fall under the “me, too” category. The result is an alarming new product failure rate of approximately 60%-80%. By contrast, companies that do succeed in realizing truly innovative products are rewarded with market leadership and, in some cases, total market ownership. Considering the results of an Accenture (New York) study, which found that consumers are disappointed by the lack of new product innovation, food and beverage manufacturers would be wise to invest in new product development that “breaks the mold.”
Breaking the mold often means developing a product that requires a new process to produce it. Creation of these products takes a multi-dimensional approach, often combining a unique shape, flavor, texture and package that cannot easily be copied by the competition. Conversely, companies that focus solely on one aspect of product development generally reap only a fraction of the development investment. In fact, the degree of innovation is usually a good measure of how profitable a product will be.
The same barriers that keep competition from copying new product innovations also make product development difficult for the companies that conceive them. These barriers may include patents, trade secrets, capital requirements and market position.
The fact that 60% of all product development efforts are abandoned long before they reach commercialization speaks for this difficulty. The trend toward outsourcing product and equipment design is reversing this fate for food and beverage companies that have great product concepts but limited resources to bring them to fruition.
An external design engineering company offers a diverse talent pool, and can apply multi-disciplinary expertise across a wide range of industries to devise completely novel solutions. These companies also offer a wealth of knowledge about developing successful products, and avoiding common project pitfalls. This article shares the practical knowledge and experience of product and equipment design firm Foster-Miller Inc. (Waltham, Mass.), gained through the development of numerous food product innovations.
Handsome Rewards for Innovative ProductsTruly innovative products endure over time, and provide almost incalculable Return on Investment (ROI). This is evident when considering the lifespan of products like Cheerios[r] and Oreo[r]. While these foods have plenty of copycats, no company has ever come close to gaining the market share or name recognition these leaders have enjoyed for decades. In many cases, these “me, too” products fade as quickly as the latest food fad.
When deciding on how to approach new product development, food manufacturers must realistically consider the lifecycle of the product, including when they expect to start seeing ROI. A “me, too” product may only outlive the point at which the company begins profiting from ROI by a few months or a year before competition has its own copycat product. In some cases, the company may never see a return on its new product investment.
True innovation is a collaborative effort, and as the heart of product development, research and development (R&D) professionals must participate in or plan for every stage of the process, from ideation to production. The need to bring new products to market faster is driving an increasing number of R&D professionals to the table to brainstorm product ideas alongside marketers, engineers, senior level management and outside engineering experts. A coordinated team effort is far better than the old “pass it over the wall” technique. However, the large number of projects abandoned during the development process indicates that more needs to be done to turn project concepts into products that can be manufactured. The R&D department can help increase the rate of success by following some important guidelines when formulating products.
Anatomy of an Innovative ProductProducts with unique shapes or structures have had much success in the food market. Yet because these types of changes often require new manufacturing methods, they are frequently swept to the side in favor of simple reformulation or packaging changes that do little more for the company than add a SKU to its product log. While product developers may consider structural changes to be superficial in comparison to formulation breakthroughs, an unusual shape can rocket a well-formulated product to the top selling spot.
One of the reasons uniquely shaped products do so well in the market is because they add “play value” and, in some cases, seasonality to extend the target consumer market to children. Making changes to a product's shape also can help manufacturers avoid potential increases in costs, because a modified structure generally does not impact the amount of ingredient required.
While shape may be considered one of the most compelling product attributes, it is a combination of novel aspects that drive consumers to the register. Beyond shape, flavor and texture, food manufacturers should look to creative packaging and even scent as a way to attract buyers, especially those who purchase on impulse. Like changes to shape, packaging and scent variations often require the development of a new and proprietary manufacturing process that may initially exceed the cost of one-dimensional product enhancements, but have been proven to be well worth the development investment upon hitting store shelves.
The addition of particulates or inclusions provides another means of achieving product differentiation and uniqueness in the market. However, some companies shy away from using particulates because they perceive the formulation and manufacturing difficulties to outweigh the benefits that this value-add might confer to the brand. While the difficulties are real and the costs potentially considerable, ROI for a successful product easily exceeds development costs. However, developers should be cautious of the cost of particulates or added ingredients. Unlike changes to shape, certain new ingredients, such as spices, can have a dramatic impact on cost. Similarly, the dispensing of added ingredients must be very accurate to avoid cost overruns.
This is where R&D's involvement in planning becomes crucial. A team approach to evaluating the business case for using certain ingredients will ensure that projects stay on track and as close to budget as possible. Without R&D's role in early-stage planning, projects can quickly start down the wrong path.
Product developers also must be mindful of the ultimate manufacturing process. Some experts recommend testing products using real inclusions as opposed to substitutes, especially in the case of fruit. Real particulates may perform differently under test conditions than they do in the lab. For example, product developers may find that fruit inclusions spoil, discolor or lose their flavor under actual manufacturing conditions.
It also is imperative that food companies run prototype tests at full line speed. Many food companies have been unpleasantly surprised to find that the integrity of both the particulate and the product were compromised when the product went to full-scale production. Since the idea is to simulate real world conditions, developers should also conduct tests using a pilot line running at full production speed in the manufacturing plant to effectively mimic different environmental conditions, such as temperature.
Keeping Pace with Healthy TrendsFood trends seem to follow the same course as clothing fashions--they keep coming back! The steady trend toward healthier eating and living suggests that nutritional enhancement will be a permanent part of product development. Since sugar, salt, and a variety of unhealthy fats are always going to be targeted for elimination or reduction, it is reasonable to assume that these ingredients will be the source of a revolving door of food fads. The good news is that with each go-round, formulators get better at achieving nutrition label goals, while keeping the product's overall sensory attributes intact. The fact that “reduced” and “free” versions of well-known food products taste more and more like their original brands provides evidence of this. However, the success of these products is not merely the result of fancy formulating, but rather the work of food scientists who have the foresight to avoid or at least warn production of impending manufacturing problems caused by the absence of certain ingredients.
While some problems show up in the lab, like the failure of certain low-carb bread formulations to leaven, other problems only surface during production. Fat removal is a common cause of manufacturing problems due to the absence of lubrication in the product, which can make it very difficult to cut and process. It is up to the R&D team to share its knowledge of food chemistry and how a given product will behave during production.
Food scientists also can help reduce development costs by formulating products that solidify quickly. Any product that requires the extraction of solvents, or a chemical reaction to harden will add significant time and cost to the manufacturing process. If an expedient hardening process is not possible, then it is R&D's job to help production plan for a longer set time.
One concern that echoes from the lab all the way to the plant is the threat of intellectual property (IP) being compromised. Many great ideas have been prevented from becoming commercial products because collaboration with an outside engineering firm was not considered a safe solution. However, today's food manufacturers are discovering that utilizing the right contract research and design firm can ensure even greater IP protection than using a wide circle of in-house resources to develop products.
An engineering firm is not an obvious target for personnel recruitment by competitors, and therefore carries a reduced risk of employee disloyalty. A firm that functions as a neutral party with no interest in marketing and producing the innovations it develops for customers provides an important measure of protection. Therefore, food companies should look for an engineering firm that operates on the principle that all work funded by the food company becomes the intellectual property of that food company.
Collaboration is the Key to Product SuccessIt is becoming increasingly difficult for manufacturers to distinguish their products amid the growing universe of exotic flavors, unique package styles, new product categories, nutritional enhancements and diet-specific brands. To rise above the sea of product varieties, food and beverage manufacturers must combine the collective resources of their R&D staff, marketers, engineers and production team with the multi-disciplinary expertise of an outside engineering firm to realize true innovation.
Collaboration with an outside engineering firm not only brings new ideas and perspectives into the fold, but it also enables technologies that have been proven in other fields to be uniquely applied to the food industry. Some of the greatest innovations have been developed by outside resources working closely with the company that has both the technical staff and market position to sell the product.
Edward J. Goldman is senior vice president of Foster-Miller Inc., which develops products, equipment and custom machine systems for a varied group of commercial clients. Goldman has been responsible for conducting and directing commercial and government-sponsored design and development work in mechanical engineering and materials processing. Some of his areas of expertise are: food product manufacturing systems, quick service restaurant and point-of-sale (POS) equipment, industrial production techniques, vibration test equipment and welding and joining techniques. He can be reached at 781-684-4145 or egoldman@ foster-miller.com.
Sidebar: Considerations for True Innovation