"Market research has shown that bacon is one of the most popular sandwich proteins and that many consumers prefer sandwiches with bacon," notes Tony Schroder, the firm's president of convenience channels in a prepared statement. He cites a Technomic research report that found over a third of consumers named bacon as their protein of choice for both lunch and dinner sandwiches. More tellingly, 87 percent are prepared to pay a premium of at least 50 cents when bacon is added to a sandwich.
AdvancePierre's consumer insights team kick-started the BaconAddict project, assembling secondary research and augmenting it with primary research that defined the ability of such a sandwich to "move the needle" in C-store sales, according to Panchot. "We had seen the same potential over and over again in other channels."
"A lot of innovation starts in white tablecloth restaurants and gradually filters down to home consumption, but because we participate in so many channels, we're able to shorten the cycle and drive innovation into the slower-adoption channels," she adds. "That's a real strength of the company, and an advantage most companies we compete with don't have."
Time to market varies considerably, but line extensions like the BaconAddict Cheeseburger can move from concept to commercialization in as little as 18 weeks, according to Toller. The super-sized cheeeseburger debuted to favorable trade reviews at the vending industry's NAMA OneShow in April.
Child nutrition programs have kick-started reformulation efforts at thousands of food companies in recent years. Pierre Foods was a major supplier to school commissaries long before the Healthy Hunger-Free Kids Act of 2010 was enacted, and the successor organization has kept AdvancePierre in the vanguard with the same combination of market research and R&D that is applied to other channels.
"One of the things we continued after the merger was our directors council of school foodservice operators," Panchot says. "That provides an opportunity to ask, 'What are parents talking to you about?' Anybody that is in this segment has to be listening to the changing demands of parents and school administrators, or they'll be selected out of the cycle." Her R&D team includes two school-nutrition specialists.
Final rules for the 2010 Kids Act, which caps school lunch caloric content at 850, only came into effect in recent months, but R&D anticipated most of the regulations. Three years ago, the firm introduced the Smart Picks line at the School Nutrition Assn.'s annual conference. The five dozen school-cafeteria menu items have one or more of the following attributes: reduced sodium, reduced fat, zero trans fat, no hydrogenated oils, whole grains or a good source of protein.
AdvancePierre also was one of the original seven food processors in 2011 to join the Alliance for a Healthier Generation, a coalition founded by the William J. Clinton Foundation and the American Heart Assn. that set science-based standards for school foods, including lean protein products, low-fat entrees, reduced sodium levels and whole-grain products. "When you find a successful formulation for sodium reduction, for example, you cascade those results through the rest of the business," points out Panchot. Synergies with the C-store initiative are an example.
Regardless of which distribution channel is targeted, new products are battle tested and come with a realistic profitability expectation. "We have a full bore test going with one of the major retail chains" right now, she says by way of example. "We launched 22 items with that customer originally as a market test." The line was winnowed to 11 SKUs and now is ready for wider distribution. "We test in real market conditions and get real results" before a full-blown roll-out, she adds.
Minimum thresholds for revenue and profitability must be crossed if a new product is to be commercialized. "We are constantly changing, constantly looking at ways to optimize our resources and get every pound out of our production plants," summarizes Panchot. To help make the call on what items are dropped from the production schedule, R&D professionals embedded in the plant management teams are on hand, ensuring the need for innovation is a metric in optimized production scheduling.