A key to marketing healthy foods to consumers is building a relationship with them. Valerie Skala Walker with IRI noted how natural and organic brands have done a great job doing this by communicating their products' authenticity. She cited Simply Orange, a juice within Coca-Cola's stable, as a particular example, which registered 52-week sales of $264 million for the period ending July 15, 2007.

For its 25th incarnation, the Prepared Foods’ New Products Conference featured speakers highlighting the latest in the world of product development. During opening remarks, Prepared Foods’ publisher Peter Havens explained that the event had two goals: for attendees to take away at least two good, new ideas from the presentations and for the new ideas and possibilities that can stem from the networking opportunities during the conference.

Those ideas are integral to new product development, and they can be found literally anywhere, explained the first speaker during this year’s Innovation Panel, Lynn Gordon. Advising the audience that learning and innovation should never stop within a company, the president of French Meadow Bakery & Café observed that ideas can be found everywhere, so be open to new concepts, pay attention and notice details. Her innovation recipe consists of one part idea seed (which requires taking a risk and a willingness to be a trendsetter), three parts determination (listening to intuition and being relentless, yet patient), a pinch of deafness (ignoring the naysayers and owning the idea), with three parts knowledge (utilizing the resources available to you and taking the time to use them wisely).

Those resources may come from within a company or, as seen from a number of companies referenced at this year’s conference, from the outside. Jeff Bellairs, director of General Mills’ Worldwide Innovation Network (G-WIN), explained the company’s efforts to “enhance innovation through greater connectedness.” The simple facts: there is a rapidly changing marketplace, a shrinking “mass middle” due to changing demographics and a growth in new channels (club stores). The average consumer selects only 40-50 SKUs out of the 40,000 in a typical supermarket, meaning breakthrough products are few and far between. Complicating matters for developers is the projected shortage in the workforce, Bellairs claims, leading to smaller companies doing more of the innovative R&D.

Recognizing this, General Mills set forth the goal of G-WIN: to be a nimble organization capable of bringing concepts to market more quickly. This can be accomplished in several ways. Internally, cross-platform collaboration can leverage the technology from other areas of the company. For instance, lowering sodium in a line of soup helped bring about a lower-sodium cereal. Working with suppliers has also proven beneficial, as has working with new partners: it is all a matter of realizing that there is not a monopoly on expertise. The projects move forward through an innovation process, and the network allows the company to funnel new technologies, solutions and products to help solve any problems along the way.

The effort also involves a technology submission process, to work with partners who have patented products that might be of help. General Mills evaluates the submissions according to several criteria: the fit for a particular brand or line, uniqueness and expansion or growth potential. This led to a carbonated yogurt submission from Brigham Young University. The school had developed and patented a “sparking yogurt,” a proven hit among students in the campus creamery, but the school did not have the expertise to take it to its potential in the retail marketplace; General Mills acquired the U.S. license for it and is launching it as Fizzix under the GoGurt brand. As Bellairs notes, “Fizzix is a great example of the power of open innovation for our company. The goal of our G-WIN program is to combine unique innovations from outside our four walls—whether from universities, small companies or entrepreneurs—with the tremendous brands and resources at General Mills to create exciting new products for the marketplace.” The effort has led to tech licensing, in-bound licensing, novel ingredients, finished products and trademark licensing.

Recognizing that no company has a monopoly on expertise, General Mills has established the Worldwide Innovation Network, an effort to enhance innovation through greater connectedness—internally and with outside partners.

A Pattern Emerges

Innovation can follow distinctive patterns, Phil Roos has found. Roos, president and CEO of Arbor Strategy Group, has identified what he terms the “Evolution of Innovation Model:” first come products that deliver against category needs. After that comes a wave of new products that advance those core benefits. Then, a wave of new items fuses the core benefits—speaking to the consumers who do not want to trade off benefits and want it all. Next is a fourth wave of successful innovation that fuses a secondary benefit to the product. This new product then spins off new “trees” of its own, following a similar path of added benefits, Roos concludes. He has found that trees can be compared across segments, and even categories, to identify the next stages of innovative progression.

Notice that the initial effort begins in the rational, but advances lead the product and developers more toward emotional fulfillment. As Roos explains, cornerstone motivators compel the consumer: wellness (performance, natural, holistic, cosmetic), safety (personal, communal, environmental), gratification (ensuring consumers that they are indeed worth the premium) and convenience (saving time, energy or space). However, he made one point quite clear: consumers do not respond well to innovations that seem to have dropped from the sky; a new product, no matter how innovative, requires some form of familiarity.

That need for familiarity in food preferences appears particularly in young people, Bryan Urbick has found. The CEO and chairman of Consumer Knowledge Centre Ltd. explained that children, young adults and teens are innately afraid of new foods. He regards neophobia as the major propensity affecting food choice: liking equals familiar. To reach that “liking” level requires time, patience and persistence. “Eight to 13 exposures are required before liking sets in,” he finds.

Urbick began his presentation with a group of teens from an area high school. The group offered their own particular insight into their food choices: food has to fit within their lives. They frequently skip breakfasts and opt for snacks instead of meals. Food is an expense, and be aware of the setting for the teen lunch: they typically have less than 30 minutes to eat in the cafeteria, so the meal has to be quick.

However, their notions of “quick” have evolved to mean virtually immediate. They regard TV dinners as “a great concept, but inconvenient for people in a hurry, frequently failing to live up to the promised taste and a too-frequent source of spillage.” Most did not cook, so even quickly prepared meals were something of a foreign concept. If they have to make their own food, preparation remains a nonissue, as they noted a preference for Pop-Tarts, Soup at Hand and Lunchables.

The group offered advice for selling to teens: the package must catch the eye and be colorful; popular brand names are important (they trust them, Urbick explains); convenience, advertising, price/quantity, nutritional facts and demographics must always be considered. They want foods to fit their lives, healthy and easy; however, as Urbick related after the panel departed, food manufacturers have a huge task to create a connection between teens and food, as teens “just don’t get it,” Urbick finds. He would like to see a trend that would seek to connect teens to food. Packaging may be one step toward that goal. Urbick estimates the package is twice as important in reaching this group than when trying to reach adult consumers.

Simply put, their lives do not revolve around food: it has to fit in their lives. Convenience has been redefined: five minutes in a microwave is not convenient, nor is messiness, a package failure or a taste that falls short of expectations.

Perhaps most telling, Urbick has noticed more and more teens desiring to “be a kid again,” a return to the safety and security of youth. What is their biggest nutritional concern? Urbick has found that they do not understand “nutrition” (neither do adults, for that matter, he notes), but they do grasp “fat.” When it comes to nutrition and healthy eating, there is a serious disconnect with their lives. “Calories” means bad to them, as they perceive caloric content as most responsible for skyrocketing obesity rates.

Mattson's Barb Stuckey queried consumers about their belief in the product claims of a number of products on the market. Of the respondents, 54% believed Enviga's claim to help burn calories, well short of the 68% who trusted Garden Harvest Toasted Chips to deliver a half serving of vegetables in each 1oz serving.

Growing Problem

Concerns about obesity are not confined to teens. Barb Stuckey, executive vice president of marketing with Mattson, noted that 65%-70% of all Americans are overweight or obese, while noting that obese and overweight Americans are looking to incorporate fruits and vegetables into their diet—notably strawberries, apples, bananas, blueberries and oranges—with broccoli leading the vegetable pack. Whole-wheat and multi-grain pasta are also favored options. While the dietary choices clearly imply an effort to eat better, these individuals are not necessarily regarding it as “dieting.” Stuckey has found that 65% say they are not on a particular diet but are trying to eat healthy. Of those who claim they are on a diet, 84% say they cheat. However, the most frequently noted dietary description is “eating healthier,” followed by eating smaller portions and more fruits and vegetables.

Stuckey explained how a variety of products recently had been launched claiming one promise or another, but the consumer does not always trust the claim. She consumer-tested a variety of products for consumer belief in fulfilling the claim: Enviga (a beverage) for boosting metabolism, Lightfull (likewise a beverage) for satiety, Corazonas (a snack) for heart health, and Flat Earth and Garden Harvest (both vegetable-based snacks) for delivering a half-serving of vegetables per serving. Consumers most trusted the Garden Harvest claim, followed in order by Flat Earth, Lightfull, Enviga and Corazonas.

So how can these products better communicate their healthy aspects to the consumer? Valerie Skala Walker, vice president of Consumer & Shopper Insights with Information Resources Inc. (IRI), addressed this question by noting it is imperative to deliver on taste and experience first. Then, make the product easy, with more satisfaction and nutrition per calorie, and sell it at the shelf with the package—while building a relationship with the consumer through trust and education. She cited a number of different products to exemplify each of these imperatives: Hershey’s Extra Dark and Special Dark, antioxidant-rich chocolate delivered an experience en route to $88 million in sales for the 52 weeks ending July 15.

In terms of ease, Bertolli Skillet Dinners for Two garnered $88 million in year-one sales following its 2005 launch and has picked up steam since, with sales at $155 million for the 52 weeks ending July 15. Smart Balance Spread met consumer demand for satisfaction coupled with nutrition, while Pom Wonderful and Pom Tea sell themselves at the shelf through package design and messaging. Natural and organic brands have done well on the authenticity front, with Walker citing Simply Orange, Amy’s Frozen Dinners & Pizzas, Activia and Stonyfield Farm’s spoonable yogurt as particular standouts.

Yogurt also proved representative of all of the key elements mentioned in Arnie Schwartz’ presentation. Schwartz, president of the NPD Group, explained “Fads and Fundamental Changes.” Change is slow, he has found: the top 10 categories in 1996 are almost exactly the same today—the only change being salty snacks replacing bread. Most meals are consumed in the home (seven out of 10), and there is more in-home preparation now than in 2002.

The number-one reason for serving a particular main dish is “ease,” also the factor that has led to fewer meal components and dropping part of the meal completely. Consumers are carrying more meals from home, but it is this convenient aspect that is leading to fewer skipped meals. At the same time, concerns about fat, cholesterol, trans fat, etc. have been on the increase and are leading to an increased consumption of more “better for you” items. Yogurt, Schwartz found, comprises the largest share of carried breakfasts, is eaten at home and in restaurants, and meets all the criteria on his list. Most importantly, he explained, eating habits are driven by taste, and tastes do not change quickly. Big changes are about making things easier or cheaper for consumers.

Three generations (Boomers, Generation X and Millennials) have dinner notions that differ dramatically. Take lasagna: for Boomers, it is made with a jar of sauce, a package of pasta and cottage cheese. For Generation X, a frozen entrée is sufficient, but for Millennials, Larry Wu has noticed a desire for “from-scratch” preparation, including freshly made pasta and sauce.

Generation Gap

Those consumers can vary greatly by generation, however, as Larry Wu Jr. explained during his presentation “Convenience as Defined by the Generations.” Wu, vice president, consumer strategist, Food and Beverage with Iconoculture, contrasted the generations by their respective approaches to dinner preparation.

Boomers, 43-61 years of age, number 78 million and are cooking-competent, though the younger ones with families are seeking “merely to survive dinner.” The older portion is making the transition to Empty Nesters, and the Food Network has introduced them to new skills, ethnic cuisines and food-centric travel. They have the 1970s view of convenience.

Generation X, 30-42 years old, is media savvy, individualistic and worry about money (though they do not appear to be acting on these concerns). They are cooking-incompetent (though Wu regards it more as cooking “inconfident”), and they are families looking for help—they use slow cookers, the burgeoning dinner-prep business and restaurants (“my other dining room”). They watch the Food Network mainly for aspiration, entertainment and to improve their eye for quality.

Millennials, those 29 and younger, number 113.4 million and are tech-native and media-immersed. Valuing identity, diversity and connectivity, they are cooking-curious and are rediscovering scratch cooking. On weekdays, they want convenience, but on weekends, they will try the from-scratch way. They are learning and applying the culturally diverse foods they see on the Food Network and will even cook socially.

Wu compared the demographics by their approaches to preparing a lasagna dinner:

  • Boomers: Beef, a jar of sauce, a package of pasta, cottage cheese; lettuce and tomato in a salad; and a package of Italian bread.

  • Generation X: Frozen lasagna; frozen garlic bread; and a bagged salad.

  • Millennials: Prepared by a big group, with each member assigned to a different component—freshly made pasta, sauce from scratch, ricotta cheese, Italian sausage; ciabatta bread; and an antipasti tray.

    Lynn Dornblaser and David Jago, directors of the Custom Solutions Group with Mintel International, likewise delved into demographics, but they did not group consumers by generation. Adventurers, they explained, are consumers looking for more than flavor: they also seek mood enhancement and authentic, specific ethnic foods. Women are a particular target for products purporting to wellness and beauty: Essensis is a cosmetic yogurt in Italy, and Beautia is available from Minute Maid in Japan, a trend toward better-for-you indulgences. Products for children are about obesity, performance and junk-free. A quarter of all foods launched in the U.K. tout “additive free,” while Hip Hop cereal bars in Australia promise “no junk,” as companies continue to walk the fine line between what kids want and what moms want them to have. The environmentalist group is into more natural/local items, less-processed foods and products promising an ethical treatment of animals, all issues affecting the entire food chain, while “Health Seeker” consumers are minimizing negatives and enhancing positives via fortification and foods naturally rich in certain beneficial components.

    While omega-3-enhanced products continue to debut, Dornblaser and Jago foresee a potential omega-3 backlash. However, there is promise in better-for-you ingredients and natural functionality. Weight management, they believe, will gradually move toward satiety.