Prepared Foods Exclusive: Gradual Changes in Food & Beverages

September 14/Bensenville, IL/Prepared Foods -- At Prepared Foods' New Products Conference over the weekend, David Houser, an investment banker with Lincoln International, predicted food companies will return to investing in research and development in the next six to 12 months. "I am starting to see food companies get out of that 'let's hoard cash' mentality," he explained just before the audience learned that total food and drink product launches for the first half of this year (7,176 in total) are down 42% from the 12,507 new items appearing on supermarket shelves in the first six months of 2008, per Mintel Global New Products Database.

Houser is seeing signs of improvement and foresees lending activity increasing as the credit market begins to thaw and investors become less risk-averse. He feels food companies will think similarly when it comes to development, introductions and innovation.

Citing Mintel and Information Resources Inc. data, Laurie Klein of Just Kid Inc. noted that 94% of IRI's Pacesetters (those new products garnering more than $7.5 million in year-one sales) were extensions, whereas the year prior had seen far more equal sales successes between extensions and new products. Klein's research has found certain perceptions about moms and children are entirely off-base. For example, the guiding force for many food manufacturers has been the notion that moms want the latest in nutrition. Klein's research, however, found they actually are looking for foods and beverages close nutritionally to what their grandmothers were buying. These moms regard it as a search for simple goodness: 74% are looking for unprocessed food for their children, although that definition of "unprocessed" can vary from mom to mom.

In addition, Klein has found that the age-old dictum of "Kids want fun; moms want nutrition" is likewise not entirely accurate. "Actually," she noted, "kid delight is nearly as important to moms as nutrition. Plus, kids do also care about health."

To stage a successful nutritional enhancement, however, Klein offered distinct advice. Notably, she does not think it wise to make radical change abruptly. Gradual changes over time would be the better option, she believes. "Ease out the sugar a gram or two per year and give kids' palates time to adjust, and layer in simple, back-to-basics nutrients."

Joe Derechowski with the NPD Group echoed those sentiments with supporting data. Since 1984, the list of the top 10 most-consumed items in Americans' diets has hardly changed at all, with only chicken and soft drinks entering the list topped by sandwiches, vegetables, potatoes, bread and fruit.

A more-detailed look at the 2009 New Products Conference will appear in a forthcoming issue of Prepared Foods, and for more information on attending a future New Products Conference, visit

From the September 14, 2009, Prepared Foods E-dition