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"In 2008, Jeff challenged us with a new goal -- by 2012 to hit $2 billion in sales from new products introduced since 2000. That not only built on the original Billion Dollar Challenge, but emphasized the importance of innovation to our company's future growth. Hormel's brands are developed to satisfy consumer trends over time. Many of our brands have been established for decades and we have a faithful consumer base. Our new brands are built with that vision in mind. We don't respond to fads with short life cycles."
Every company has a product development process. "We formalized what we call our 6D process – direct, discover design, develop, deploy and delight," says Minerich. "It's our methodologies and collaborative infrastructure that differentiate us from our competition. Our innovation funnel is full, so our goal is focusing our efforts on higher priority opportunities and allocating our resources to the projects that will have the greatest opportunity in the marketplace."
Asked what the general timeline for coming up with a new product, Minerich kidded, "Between one day and 10 years." Zeroing in, he explained, "Our foodservice projects are very customer-oriented, so we respond quickly to our customers' needs to keep their menus current with fresh ideas. Competition is stiff, so everyone wants to refresh their menus several times a year.
"Some of our longer-term projects, where technology or science innovations are deployed, literally take years. Our goal there is to identify key customer or consumer needs and be sure the product reflects, meets or exceeds those needs, but also gives us a marketable point of difference. We want to do it right," he says emphatically.
"We have both food scientists and chefs on staff, and try to partner those skill sets together during the development process," Minerich continues. "A scientist develops a food product from ingredients up. A chef develops from a finished product backward. The chef is always modifying his creation until it is right and then he looks back at what he did to get there, whereas the scientist tends to develop via formulation. You are really merging left brain and right brain thinking.
Sometimes it's a crash, but it's an exciting crash," he says, laughing.
It is sometimes challenging for a large company to come up with innovative new products because there are so many management layers to sift through. That problem really doesn't exist at Hormel Foods. "It goes back to our management style," says Minerich. "The layers are on an organizational chart, but it's not uncommon for our CEO and vice presidents to talk directly with our scientists. Communication barriers don't exist. Our founder's (George A. Hormel) philosophy of ‘Innovate, don't imitate' is prevalent not only through R&D, but through the entire organization. Our innovative culture goes across the board, and we are very proud of that."
From prematurely right to sweet success
"New product ideas fall into our lap because we have a tremendous consumer insights team that mines consumers for ideas all the time," says Minerich. "There are very unique skill sets involved in questioning consumers and analyzing what they are telling you. Consumers don't give you new product ideas, they tell you what problems, challenges and issues they are trying to work around. Between the marketing and the R&D teams, we have to use our creativity to understand where the consumers are coming from and what opportunities can be mined."
One such product and project Minerich is particularly proud of is the Natural Choice lunch meat line. "I can honestly say we caught our competition off guard," reflects Minerich. HPP uses high pressure, not temperature, to pasteurize food, and Hormel Foods was the first to apply it to lunchmeats on a national basis.
"Many companies were aware Hormel was working with high-pressure processing from a food safety perspective. Internally, we identified the opportunity to remove preservatives and artificial or synthetic ingredients and address the natural foods and minimally processed foods initiative that our consumers were asking for. This technology helped us bridge that opportunity, and I heard from many of my colleagues that they never saw it coming when our products hit the retail shelves."
He is also proud of Hormel Compeats. "It started out as Top Shelf and then merged into Dinty Moore American Classics," he says. "It was one of those products way ahead of its time. Richard Knowlton, our CEO at the time, was quite a visionary and saw the consumer opportunity for convenient, shelf stable meals. He identified this as being ‘prematurely right.'
"The concept was perfect, but food processing and packaging technologies weren't up to speed, so product quality wasn't optimized. Technology had to catch up. It was also a very new idea for consumers to have a shelf-stable ready meal that wasn't refrigerated, so it took some time. [The final success came] when we literally took the packaged food out of the box. We showed consumers it was a tray, they understood the concept, all the pieces came together, and it was a great success."
Minerich is also proud of the company's Café H foodservice line. "Foodservice customers also are time constrained," he says. "This product allows the operator to put his own sauce or our sauce onto prepared meats, whether it is pulled chicken, beef or pork. The line has been a great success. This year we introduced Always Tender Oven Roasted Fully Cooked Pork Loin, another extension of foodservice convenience," he says.
"We own the consumer market with our Hormel Microwave Ready Bacon – four slices of raw bacon per packet and four packets per package. It's a very convenience-driven product, and growth has primarily been through consumer word of mouth," he says. "Our Hormel fully cooked entrees have also been a great success.They deliver easy to prepare, center-of-plate meats to consumers, allowing them to build the rest of their meal around it. Our Hormel Always Tender Case Ready line delivers a patented process guaranteeing quality. Hormel Always Tender is the only fresh meat in the market guaranteed to deliver an always tender eating experience or your money back."
Talking turkey about wellness
"The most important attribute in new products is balance," says Minerich, who believes the wellness trend is here to stay and emphasizes Hormel Foods will continue to build on it. "When you look at a product like Hormel Compleats, you are talking about a balanced nutritional portfolio of proteins, fats and carbohydrates. You are also looking at portion and calorie control. We try to help our customers balance their lifestyle with our product offerings.
"Our fully cooked entrees help balance their meal because we provide that center-of-the-plate experience, and they can build around it with vegetables, starches or salads. Our Hormel Natural Choice line of lunchmeats meets the needs of those consumers looking for naturally healthy products.
"Looking at all Hormel products across the board, more than 80 percent are at or below the RDI for sodium," he says adding, "Our portfolio is far reaching, and sodium is a key issue. We also own Jennie-O Turkey Store, and turkey is a very healthy protein. In general, lean protein offers satiety. When you balance your diet with lean protein, it gives you a sense of satisfaction and fullness that discourages over eating and snacking. Lean pork is as lean as lean chicken now. Convenience and package functionality – easy open, recloseable, portion size -- is also important."
A matter of trust
"We are very much a career oriented company, in fact, the top 10 percent of R&D has over 33 years of seniority," says Minerich proudly. "It's not unusual for our company to have that kind of institutional knowledge, which gives us a unique competitive advantage. A consultant once asked how we could get anything done with so many meetings. I told him that's exactly how we get things done.
We have to have to be efficient with our meetings: have an agenda, get right to task, and get the job done in 30 minutes or less. Questions are asked, there are no holds barred, everyone walks away with action assignments, and we all trust each other to get our tasks done. We all have work to do, so we get down to it and make sure we are advancing the project.
"It goes back to the long-term relationships that have been built on trust. This is the Hormel Foods family, everyone is proud of each other's accomplishments. I've worked for four CEOs, and they, along with all the other employees have integrity. With integrity, trust and teamwork in place, we can focus our efforts on being relevant to the customer or consumer."
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