Research has found that the age-old dictum of “Kids want fun; moms want nutrition” is not entirely accurate.

AtPrepared Foods’ New Products Conference, 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 total food and drink product launches for the first half of this year (7,176 in total) were 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 believes 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 2008 Pacesetters (those new products garnering more than $7.5 million in year-one sales, among other criteria) 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 the age-old dictum, “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 changes 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 notions of gradual change 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.

Exploring dining trends, Derechowski discussed how consumer attitudes do not always match their behaviors. While NPD research has found some 60% of the population would like to lose at least 20 pounds, only 21% describe themselves as “on a diet.”

Home, Sweet Home
Home, Derechowski noted, remains the battleground for food, with 72% of meals consumed there. Some 19% are eaten in foodservice establishments, and 7% are skipped. Furthermore, he believes dining out will likely continue to suffer in the troubled economy. Restaurants are struggling, he noted, at least partially due to one simple economic fact: food spending as a percentage of total income has decreased every year since the Depression.

What in-home options will consumers seek? Some 56% now regard private label products equal in quality to their name-brand counterparts, with only 9% disagreeing with that notion. Furthermore, 26% say private label items are actually superior in quality to national brands. Less than a third (32%) favored the quality of the national brands.

In terms of meal dayparts, 75% of breakfasts are eaten in the home, where 81% of dinners are also eaten. The dinner meals are more about convenience, as the number of items being served is trending down, as is the number of ingredients used. Lunch, while most likely to be eaten away from home, is also the meal most likely to be skipped. However, Derechowski did note a trend toward taking lunch at home, while predicting growth in organic fruits and vegetables, restaurant-quality meals consumed at home, light and diet options, slow cooking and appetizers eaten at home. In terms of health-oriented foods, he finds sales of probiotics are continuing to grow and likely will continue to do so.

Bob Jones, principal with Scientia Advisors LLC, likewise foresees opportunities in functional foods. As he noted, “There is solid scientific support for the health benefits of numerous nutritional ingredients. However, they only work if the consumer consumes them.” Several macro trends do portend a positive future for these goods: an aging population will experience more chronic disorders; healthcare spending is reaching unsustainable levels; and foods delivering a medical benefit are commanding higher prices. Already, sales of infant formula fortified with DHA has been on an upward trend since 2002, and, probiotic yogurt, while it did take time to register with American consumers, has now grown to command a sizable share of total U.S. yogurt sales.

Forecasting functional foods to grow to $200 billion by 2012, Jones did make note of several disappointing past introductions which had not fared well in American stores. However, these examples did offer some valuable lessons. Manufacturers must understand and coordinate: the science, consumer preferences, regulatory requirements, formulation technologies, distribution channels and delivery systems.

Restaurant to Retail
Technomic’s Kevin Higar explored the topic of turning restaurant trends into retail products. Predicting trends through 2015, Higar sees comfort foods remaining important to consumers, as well as a focus on foods and beverages aimed at children, both in terms of their health and enjoyment. Restaurant trends to 2015 include taking the concept to the consumer, targeting non-traditional eating occasions, catering as a growth option and offering in-store restaurant concepts that will make the consumer’s life easier—while still being familiar, rewarding and convenient. The notion of restaurant-to-retail is changing: consumers are seeking restaurant experiences similar to home.

Higar advised attendees to take a walk in consumers’ daily shoes, make an attempt to understand their situational desires and limitations. Realize that the notion of “comfort food” is changing, along with the demographics of the marketplace. In that sense, quick-service restaurants and fast-casual options are expected to embrace more “ethnic” foods and then lead the mainstream growth of these items. When considering the addition of a comfort cuisine, Higar suggests the target audience be at the top of mind throughout development. In addition, the flavor road map of a comfort “ethnic” cuisine must realize a number of key factors:

* These options were created by unique cultures.
* They have been influenced by innovative chefs.
* They have been further influenced by innovative media.
* However, ultimately, the acceptance and success of these products is driven by consumers.
* Importantly, successful concepts will manage the difficult act of balancing “neophobia” (fear of the new or unfamiliar) and curiosity.

In terms of menuing, Higar noted how less is truly becoming more in several aspects: number of menu items, the number of ingredients and additives. Small portions have emerged as a significant trend in foodservice, as consumers experiment with portion control and enjoy more communal dining experiences. However, less is not always about the food itself. It also is represented in the concept of fresh, notably in the distance ingredients have to travel, as well as in the methods of preparation and the concept itself. Higar noted Haagen-Dazs’ Five™ as one such example of the trend toward fewer ingredients; Five bears a very short ingredient legend and wears it proudly on the front of the packaging.

Higar also noted what he termed as the coming “senior tsunami.” These older consumers are not willing to sacrifice anything--either in terms of culinary items or otherwise--as they age. Therefore, he suggests creating products and experiences (either on the shelf, in the restaurant or in the home) that will support nesting and relationships, while communicating quality-of-life benefits at the same time. “Blend comfort food interpretations,” he advises, “with ‘safe’ culinary adventures.”

When it comes to meeting the needs of children and young consumers, Higar echoed the sentiments of many, namely the difficult act of balancing parents’ nutritional concerns with creating products that please children’s palates. One suggestion was to offer items that reflect adult options, realizing that many young people support social responsibility at least as much as their parents. While the goal should be to make the food decisions easy for the parents, manufacturers and operators must be forewarned that nutritional information, ingredients and sourcing are going to be increasingly scrutinized.

One effort to simplify that goal has been the Smart Choices Program, the topic for Sarah Krol, general manager with NSF International’s Smart Choices Program. Krol delved into the creation of the program, the partnership with the American Society for Nutrition and the coalition-based approach. Noting the proliferation of labels with little uniformity, which ultimately served to confuse the consumer, Krol described Smart Choices as an effort to simplify the purchasing of foods and beverages. The program, Krol explained, was designed to be dynamic and change as a new consensus was reached. At the time, the program’s structure was derived from the 2005 Dietary Guidelines, FDA’s definition of “healthy” and USDA’s definition of “extra lean,” but it would be “updated per authoritative guidance, including the 2010 Dietary Guidelines,” she explained.

The goal was to provide clarity, consistency and smarter food and beverage choices through a front-of-pack symbol and front-of-pack calorie information. In the process, developers examined three categories: components to limit (fat, saturated fat, etc.), nutrients to encourage and food groups to encourage. While the program has come under fire in recent months, information remains available at

Values to Value
With authenticity as a key to creating the comfort foods that are an intrinsic part of Americans’ diets, Mario Valdovinos, CEC, director of Culinary Services Research & Development at Tyson Foods Inc., discussed “Driving Authenticity Through Ideation, Process, and the Consumer,” beginning by explaining the two phases of joint value creation.

The divergent phase involves scoping and planning (discovery, focus and research), consumer insight into their behaviors and needs, industry foresight into the market trends and the identification of opportunities (both in the near and long term). The convergent phase encompasses opportunity prioritization and development to identify requirements for success, a refinement and validation of those opportunities in building the business case and, finally, the execution of the product. Ideation, Valdovinos explained, bridges the gap between these two phases, and he then identified the top six trends on Tyson’s radar:

1. Fresh factor:He believes fresh will be “a foremost factor in menu and restaurant concept developments.”
2. Simplicity:Convenience means more than simply ease. He advises eliminating the clutter and reducing the “noise.” Convenience also means assistance and products that may not be fast, but that reduce preparation steps.
3. Health and wellness:Though focused in the U.S., the trend is growing in Europe, Valdovinos explained.
4. Absence of negatives:Helping to eliminate the clutter.
5. Customization:Offering consumers the chance to make a coffee drink into their specific, individual coffee drink.
6. Locavore:Local sourcing can allow consumers to reconnect to the food they are eating; their diets consist of foods harvested within an area (most commonly, a 100-mile radius).

To capitalize on those trends, Valdovinos advised companies to know their consumer; establish an innovative playing field and generate ideas; develop, test and screen the concepts; ask questions; and consistently introduce new products.

The latter served as the subject for Lynn Dornblaser and David Jago, directors of the Custom Solutions Group with Mintel International, and they paid special focus to a product introduction concept they described as “mashups:” merging two different products to create a third. In the U.K., for instance, Mars Planets are deconstructed Mars Bars that have been phenomenally successful, Jago noted. For ideas, they advised developers to:

* Identify transformative concepts.
* Think about how those might apply to their business.
* Steal with pride: copy and improve.
* Do not make it too much of a disconnect, which risks confusing consumers.
* The end result has to be real, with tangible benefits.

They also offered a few glimpses into the future, with their consumer packaged goods predictions for 2010.
* Making simple special: Packaging and positioning can elevate everyday items into a new level.
* Multi-purpose making inroads: There is growth in products that serve several needs or can be used in a variety of ways. Busy lives demand products that do more than ever.
* Small moves in eco-friendly: Companies are taking smaller, yet significant steps regarding the environment. Subtle changes are easier for the consumer to accept.
* Local gets stretched: “Local” is expanding as a concept, resulting in a more practical approach to local as a positioning statement. Some 43% of U.S. consumers say they buy local whenever possible. Truly local, however, is not possible from major national companies, so some are taking a different tack on the concept; for instance, chip-tracking in Lay’s potato chips is a step toward transparency.
* Real, fresh foods: “Fresh” continues to grow beyond its current categories, but can mean many things.
* Fitter products: Lighter, slimmer, easier. Smaller sizes and quantities. Less packaging. Easy to

For more information on attending a future New Products Conference, visit or contact Marge Whalen at 630-694-4347.

Website Resources: “Kids Apparently Like Healthy Foods” fromPrepared FoodsE-dition “Formulating Products for Kids” fromPrepared Foods Case studies performed by Just Kid Inc.