Industry Attitudes About New Product Development


A survey of food industry marketing and R&D executives.


A few months ago, I asked you to complete a survey to help us gauge the industry’s attitudes about innovation. I’d like to thank everyone who took the time to do so. Ron Spinner of Kraft and Roger Hammond of Wild Flavors were the winning respondents in our drawing for two $100 gift certificates.

We got input from 92 executives from some of the food industry’s most respected companies, including Kraft, Nestle, ConAgra, Coke, Pepsi, Hormel, General Mills, Kellogg, McCormick, Cargill, Starbucks, and others. The respondents were about evenly split between R&D and Marketing disciplines. Here are a few of the learnings:

Thirty percent of you said that the potential size of the business was the #1 qualification for new product development. This is not a surprise given the size of the companies represented. Thankfully, though, there are companies that believe there’s nothing wrong with a profitable $5 Million idea. Size is in the eye of the beholder. This assures we don’t end up with an entirely vanilla market basket.

63% of you think that your teams are too busy to focus on new projects. Too busy doing what? If my observations are any indicator, you’re too busy attending too many meetings! I see people scheduling themselves so tightly into back-to-back meetings that they spend half their time in Meeting A preparing to leave to go to Meeting B. Or Blackberrying. Fewer meetings and more focused concentration during them would be a productivity boon to the industry.

Most of you feel well-equipped to handle new product development in terms of expertise. But 55% believe that your budgets are too small.

The single most important consumer measure for 42% of the respondents was taste. This aligns perfectly with other research we’ve conducted with consumers—who tell us taste is #1 for them, too. Cost was far behind, with 27% ranking it #1. Convenience and health tied for third place.

Curiously, only 37% of you think you are developing the best products you can. Not everyone answered our open-ended “why?” so I’d like to hear more about this from you! A few cited unrealistic margin and volume targets as a serious concern. Joseph Cincotta, of HJ Heinz, makes a great point:
“Relaxing financial targets for the first year of a new product introduction would allow us to introduce a superior product and gauge its likes and dislikes. This will allow time to determine product success, optimize the manufacturing processes and improve product margins.”

We asked you which packaged food company you think does the best job innovating. Kraft, Nestle, Kelloggs, and P&G were at the top of the list. P&G has done such a fantastic job innovating in non-food categories (like Crest White Strips, Swiffer, and Febreeze) I’ll bet this is why they made our list. After all, they only have 2 food platforms left in their portfolio!

A few people mentioned Jones Soda as an innovator, which is interesting to me. Jones has used the cloak of innovation to generate PR, but I’m guessing their turkey and gravy soda didn’t win any consumer taste preference awards. They probably only sell a few hundred bottles a year. But, boy, this really shows how impactful an “out there” product introduction can be! Imagine the press the big guys could generate with a few wacko PR stunts. I can see it now: Chicken-Flavored Oreos! Cheddar Cheese Nesquik! Broccoli Haagen Daaz! Eat your heart out, Jones.

We asked you whether the best new product ideas come from consumers or innovative companies. A whopping 70% said innovative companies. I was encouraged to read this. It confirms our (Mattson’s) belief that the best learning comes from putting new product hypotheses – otherwise known as concepts and products -- in front of consumers and letting them taste them. ConAgra’s Pam Gaik says:
“Consumers aren’t always able to articulate unmet needs or desires for new products. Too often we look to consumers to tell us what they want in a new product. This is impossible. It’s up to (us) to help translate what consumers say and do into areas of opportunity…”

Exactly. I love to quote Henry Ford on this topic:
"If we had asked the public what they wanted, they would have said faster horses."

If you would like more information on our results, email me at morningcup@foodcom.com
or attend my speech at the annual IFT meeting in New Orleans July 17th.

Posted: Sat - August 13, 2005 at 03:36 PM        

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