2011 Processor of the Year H.J. Heinz Co: Pittsburgh Product Development Touches the World

Six-year-old innovation center, plus distributed centers of excellence, keep the global pipeline full.

By Dave Fusaro, Editor in Chief

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Heinz has health and wellness goals for all its products, but they're clearly second to taste. Nevertheless, sodium has been reduced in Ore-Ida products and even in the sacred ketchup recipe; palm oil has been eliminated on French fries in the U.S.; there's less fat and more protein in most of the T.G.I. Friday's products; ingredient lists have been shortened on Classico sauces; calories and fat have been reduced in the new Light versions of Classico alfredo sauces; and whole grains have been added to Weight Watchers Smart Ones and Bagel Bites snacks.

Heinz recently disclosed that in North America, one-third of the company's new product innovations in the 2010 calendar year met its criteria for healthy nutrition innovation. The target for 2011 is 100 percent.

Matthews is just getting comfortable with his role as a coordinator of international product development efforts. "Product development is regionally deployed. Tastes are different country by country. We understand and embrace that," he says.

Thus the R&D centers in Netherlands and, soon to be, China.

In almost every international market, the company is focused on building its local brands, like Quero tomato sauces in Brazil and Master soy sauces in China, while driving the growth of the Heinz brand globally.

And while the suburban Pittsburgh center supports both objectives, Matthews also embraces a point made by Johnson. Counter to what other food executives may think, the Heinz chairman sees an untapped opportunity to take successful products and innovations from the emerging world and adapt them for consumer preferences and tastes in the developed world, rather than vice versa.

As for emerging markets, despite rising incomes and increasing curiosity for Western products, Johnson and Matthews say Heinz will continue to offer products that are tailored to localized tastes and habits. On the other hand, Heinz believes that the U.S. market is open to new tastes, products and packaging inspired by other regions of the world.

"Quero [the recent acquisition in Brazil] has some interesting packaging formats that we're looking at bringing here, and Heinz will offer U.S. consumers a flexible stand-up ketchup pouch with a spout that was developed for emerging markets," Matthews says. "We are also launching Heinz Ketchup blended with balsamic vinegar in the U.S. after this great new variety of our flagship product made a big splash with consumers in the U.K."

Heinz officials won't disclose exactly what's in the pipeline, but Matthews says the company is unveiling new packaging and sizes that will offer compelling price points for U.S. consumers with tight budgets, including Heinz ketchup and mustard at suggested retail prices of 99 cents — as well as affordable varieties of Heinz Worcestershire sauce and Heinz 57 Sauce and a one-pound bag of Ore-Ida French fries.

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