Last year, research and development teams at most food and beverage processors were wrestling with reformulations for the healthier and organic trends. Foremost was the technical difficulty for many food manufacturers — especially bakers — to get trans fats out of their products. Labeling requirements for the presumed unhealthy fat kicked in at the beginning of 2006, and the drive was on to acquire the coveted "no trans fats" label.
Breathe a sigh of relief: Efforts for most were successful, and today little starbursts announcing "0 trans fats!" decorate the labels of most cookies and savory snacks. But the healthier-for-you impetus is here to stay, and R&D teams will remain busy reformulating or designing from scratch foods and drinks that promise more in the way of physical, mental and social health.
Who will make up those R&D teams designing healthier fare? Our annual R&D Survey indicates the push for more cross-functional teamwork continues. But whereas last year’s survey spotlighted how nutritionists, agronomists and some purchasing agents were working with the lab-coated bench workers, this year some white-collar denizens come to the fore. Marketing and sales people are playing a bigger role in the development of new products than many of us might believe.
This year’s survey results are based on 324 responses. While the marketing folks score high but two points behind R&D in product conception, they actually rank higher (by eight percentage points) than R&D as well as management in decisions on whether to take a product idea forward (see Figure 1).
Product development goals for our respondents typically are set by the triumvirate of R&D (75 percent), marketing & sales (73 percent) and corporate management (65 percent). More than half (55 percent) also noted their CEO/CFO/president is "very involved" as well.
But the folks in the plant have their say, too. More than one-third (34 percent) of respondents say those in manufacturing also are "very involved" in setting product development goals (and a higher 47 percent say the plant is "somewhat involved"). That’s virtually the same number as noted manufacturing also is "very important" in determining the products the company is to explore further (Figure 2).
Three-quarters of the respondents say marketing & sales is "very important in determining the products [their] company wants to explore further." Management is more involved, too: 60 percent say the CEO/CFO/president pitches in and 67 percent say more general segments of corporate management are in.
R&D was ranked comfortably in the middle of these titles at 64 percent. And an interesting statistic arose from this breakdown indicating nearly one in five respondents claims suppliers are "very" involved in the determining products the company should further explore. That’s a good amount of clout coming from outside.
If the shoe fits
Decision making is crucial not only to determine what the new formula goals should be but how to make them happen. A lot goes into a final "thumbs up/thumbs down" for a new or revamped product. Any stage of the decision-making process can trigger the spending or saving of thousands of dollars.
Different people get to make the call at those different stages. "Does it fit our brand?" is answered equally by marketing & sales and by top management. Not surprisingly, marketing takes over when the question is "Does it fit our marketing strategy?" I guess you gotta suspend trust in the marketing & sales folks when you decide "Can we make money on it?" – only R&D scored lower among the nine job titles (see Figure 3).
Interestingly, suppliers figured a close second to manufacturing (only half a percentage point behind) when the question was "Can we make it?" It’s our assumption those are suppliers of equipment as well as ingredients.
One question we expanded this year was where each title fits along the product development process (see Figure 4); that is, who is on the product development chain?
Click image to enlarge.
Of interest, in our chain the marketing and sales team does the majority of the brainstorming – slightly more than R&D. And of course, that group handles the lion’s share of market investigation as well. R&D gets into the driver’s seat for formulation as well as product testing and development. Then, as would be expected, the bench squad hands the reins over to plant operations for manufacturing, production and packaging.
This does not mean there’s no team effort. In fact, the differences in the breakdown are not that big – everybody in-house pitches in across the board with more or less equal voice, and a little more emphasis when the development process hits their department.
One set of survey results that came as unexpected was the degree to which the marketing & sales team is involved in product testing (more even than the manufacturing operations team) and the packaging phases (surpassed only by manufacturing operations).
This ties in to our question on whether a company makes decisions regarding new product development in a centralized or decentralized manner. When asked if decisions are made at the corporate level (centralized), almost two-thirds said yes, versus 36 percent claiming decisions at their company are decentralized – that is, made by a particular business unit.
Cross-functional team members are assumed to bring different perspectives to the product development process. A new question in our survey this year asked whether processors think there are benefits or hindrances when working in a team atmosphere.
Those surveyed were divided over the question whether cross-functional teams are successful with new products only if they have a common incentive plan. Two-thirds agreed and one-third disagreed.
But the nearly 200 additional comments we received to this query shined a light on some typical — and not so typical — pros and cons of the entire teamworking model.
"The benefits are that four heads are better than one," says Debbie Rihs, quality assurance manager for Don's Food Products (www.donssalads.com), Schwenksville, Pa. "No one person has all the answers, and a team of different disciplines helps you avoid costly mistakes. It also provides different perspectives that may help the creative process in looking at a new item."
"A cross-functional team allows you to call out issues in product development early on," stresses the associate marketing manager for a large frozen food company. "If you don't bring finance, operation or procurement, etc., into the game early, and rely only on marketing and R&D, a lot of problems usually arise. You need operations to let you know if it's feasible for the company to process the product or if you need to look into co-packing. Finance needs to look to see if a profit can made. Everyone's role is important in product development."
Putting the "cons" succinctly, Betty Jo Steel, president of Steel's Gourmet Foods (www.steelsgourmet.com) Bridgeport, Pa., says "Marketing [might] see opportunity in a category; R&D may find it uninspiring. Consensus within a team can help everyone, but it can also blunt creativity."
"The benefit allows specific departmental team members to understand the larger scope of the project in terms of both development and impact," wrote the technical director of a development lab. "One hindrance is the challenge of ensuring each department continues to maintain the broad perspective throughout the discussion."
"The volume of group development input is greater," noted one respondent, "but it takes longer to finish a project with so many different ideas. Yet we do end up with a better product."
Praising the cross-functional model, Robin Robinson, vice president of marketing for Bell-Carter Foods Inc. (www.bellcarter.com), Lafayette, Calif., notes, "Teams reduce [the chances of missing] key executional elements; issues are identified by experts in specific areas. Ideas are better defined and products are ultimately better with diverse groups involved."
"The benefits far outweigh the hindrances," lauds Scott Selman, director of operations for Traditions Meal Solutions (www.traditionsi.com), a frozen and shelf-stable meals manufacturer in Jackson, Miss. "By having a cross-functional team in place at the beginning of the product development process, all parties are on the same page and know the goal. Each function needs to have input and then needs to make sure their part of the process is delivered. This approach can predict issues with functions that a single R&D team might miss."
Many respondents tendered valuable tips for smoother operation of cross-functional teams: "You must limit the amount of feedback and number of people for each phase of the product development stage," said one. "They must be led by the proper individual," said a second. A third noted that such teams "need a system and process for the meetings all parties need to agree to the process. [Teams provide a] broad base for information hindrances. Someone needs to decide and own it, and everyone needs to buy in. Otherwise, you can second-guess things to death."
So, where do our processors turn for information and help in identifying new product ideas once product development goals have been set? In the 2005 and 2006 surveys, about 40 percent and more than 50 percent, respectively, gleaned information and help from their suppliers — either in addition to or instead of relying on internal research.
This year, processors are also relying on the standard input from customers, competitors and industry journals in the research stage of research and development. Of course, sometimes it just takes good old-fashioned legwork: One respondent answered that he gets ideas for new products from "what we see or do not see in the marketplace, grocery or club stores."
Another source of info from outside continues a developing trend of the past few years – that of outsourcing. More than a quarter of respondents said they use an external product development company to help them identify new product ideas after setting their product development goals.
And we can’t forget our colleagues. "Many times we are reacting to competitive pressures or attempting to improve functionalities not present in a competitive offering," reminded one respondent. Moreover, well over half – 56 percent – of those surveyed noted they use suppliers as an important source of information and help for identifying new-product ideas.
In early June we sent survey links to Food Processing and Wellness Foods readers who hold administrative and R&D titles. The 324 respondents included vice presidents of research and/or R&D, research directors, directors of quality control/assurance, marketing directors and management.
Some of the responses included verbatim comments, plus personal interviews were conducted with those who provided specific information. In all cases where individuals were quoted by name, permission was secured. As with all Food Processing surveys, all personal information is kept strictly confidential and is used only for research purposes.
I read it in a magazine
"We produce sugar-free and low-sugar, high-end products for diabetics, dieters, heart patients and healthy eaters. For the past 15 years we have relied on trade journals and ingredient suppliers to help us use cutting-edge ingredients to achieve our nutritional and taste objectives. Sweeteners have been one of our challenges, as have gums, pectins, fiber products (inulin, fat substitutes, etc.).
"Our foray into organics created special challenges: As a small company, we brainstorm for ideals of products that our end customers need. We then do R&D with small recipes, using a variety of ingredients and from classic recipes. When it looks and tastes right, we scale up three times- 5-10 gallons, 40 and 80 gallons. We adjust, settle on a taste, run the nutritionals on the computer and, if they are acceptable, we send samples to the lab.
"We settle on packaging and labels and try to send samples to key customers for their reaction. If it is positive, we move forward. Combining organic and sugar-free in one product was a mistake a year ago. Today, it has worked out to great functional and market advantage.
"We have often been ahead of market trends in the diet food category. Our assumption was always that diet foods should be trendy, gourmet and taste great. 'Big food' has not yet fully embraced the idea of expensive ingredients and great flavor in this category. Thus, there are low expectations that must be overcome by the small innovative companies."
- Betty Jo Steel, Steel's Gourmet Foods, Bridgeport, Pa.