This past March, Procter & Gamble personnel authored an article in the Harvard Business Review telling how that product development and marketing giant is seeking concept products outside the company. These products then are developed by P&G cross-functional teams. Any feelings of “not invented here” are no longer allowed here. The concept would have been anathema a few years ago.
To no one’s surprise, the role of R&D in some major companies has changed. For many, it means less research and more development. For the people with “traditional” R&D backgrounds, they’re learning to deal with the special considerations and complications of organic and natural ingredients in order to produce organic and natural end products.
Organic as a trend is not news, of course. But when Kellogg converts a big portion of its product line to organics and Wal-Mart jumps in — both occurrences are only a few weeks old — you know it’s reached critical mass. Research departments are being charged with devising ways to trace ingredients, developing sets of additives and ingredients that are acceptable, as well as acceptable techniques for handling newfound food safety issues.
And with healthier eating impacting all food products, R&D departments are deciding which new ingredients, especially nutraceutical ones, to add and which unhealthful ones they can remove … and how. Dealing with issues from glycemic index to probiotics leads to a greater emphasis on nutritional research and its application.
The organic and healthful trends also are causing changes in the product development teams. There are some different hats on the team hat-rack, as more teams add nutritionists and even agronomists. The role of purchasing agents has expanded and become more complex, as well.
But the teams are still teams. Like those in the National Football League, they shuttle players in and out and bring in new talent every year, but it takes a collaborative effort of many and varying talents to win the Super Bowl … or to launch a whole-grain, organic, sugar-reduced Cheerios.
Teams are alive and kicking
Cross-functional teams have gotten more cross-functional. The reasons for adding nutritionists, agronomic specialists and more purchasing agents are to meet market demands for nutraceutical and organic foods.
Developing products that prevent and treat illness or improve general health requires following current nutrition research done in hospitals and academia (as well as a few food companies); thus, nutritionists have joined the team.
According to at least one director of research, nutritionists can split the team when they first join. Initially, some are anti-industrial, others are anti-marketing. But the good ones add a lot of insight to the team, improving products and growing sales. The days when “nutrition doesn’t sell” appear to be gone, and nutrition is a major selling point, especially if it’s presented well.
The other active trend, organic food, means the addition of purchasing agents and agronomic specialists to the team. Their arrival introduces new terminology to the lexicon. R&D has had to add terms like “sustainable pest management” and “soil management” to its vocabulary. Organic foods are governed by yet another set of USDA definitions that are sometimes at odds with some food safety requirements.
Most of the pioneers and the major organic brands already have agronomic expertise. They are skilled in the science of identity preservation and acreage contracting, pulling the business of food back past the farm gate into the field.
Campbell Soup Co., Camden, N.J., has been at the forefront of introducing organic versions of conventional products, including organic tomato juice, V8 vegetable juice, Prego pasta sauces, Pace picante sauces and Swanson broths. The first product, organic tomato juice, was introduced in October 2003, and was the product of joint agricultural research by Campbell and University of California at Davis.
Campbell has been at the forefront of managing pests without chemical addition and using a version of USDA’s Pest Management Program to reduce chemicals and increase the acreage of organically grown tomatoes.
“Campbell recognizes the tremendous growth in organic products, and we wanted to give consumers an organic option within the tomato juice category,” says Sean Connolly, vice president and general manager of Campbell's Beverage Div. “We are very excited about the opportunities that this new product represents.”
Steve DeMuri, Campbell’s senior manager for commercialization and improvement, credits the National Organic Program regulations of October 2002 for “leveling the playing field and making it less risky for large companies such as ourselves to enter the market. Also, the increase in organic ingredient supply, both in quantity and variety of available organic ingredients, has allowed the larger companies to develop and produce organic products on a much larger scale than previously possible.”
There’s no doubt organic foods are big. The Organic Trade Assn. reported in May organic food sales totaled nearly $14 billion in 2005, representing 2.5 percent of all retail sales of food, up from 1.9 percent in 2003. According to survey results, sales of organic foods are expected to reach nearly $16 billion by the end of 2006.
Whole grains and fruits and vegetables got a big boost from the 2005 Dietary Guidelines for Americans. Partly because of the push from ingredient companies, whole grains and phytochemicals from soy, cocoa, tomatoes and other foods are being promoted as both components of a healthy diet and as curatives for some diseases.