Get ready for an onslaught of truly new products – not safe line extensions or just "cleaned-up" products – from your product development team … as well as the R&D departments of your competitors.
At least, that's what the numbers seem to indicate in our 42nd annual R&D Survey. The 48 percent of respondents who voted truly new products as their top priority for 2013 (up 8 percentage points from last year) was the highest number for that subject since our 2010 survey, and, it's hoped, is one more indication that the nasty recession is behind us and food companies are ready to resume aggressive growth.
"Improving existing products is always mandatory, but new products are our focus," as one respondent put it. Wrote another: "We will continue to look for cost-saving ideas through our research, but this year we will focus more on expanding in a new direction to achieve future growth."
Not that you ever stopped growing. As our annual Top 100© list shows every year, food and beverage processors never stopped making money, undoubtedly because American and Canadian consumers never stopped eating. Maybe it wasn't enough money or maybe things just seemed too dicey to invest, but R&D departments had to suck it in over the past couple of years.
Which doesn't mean the corporate suite is throwing money at your team in 2013. One of the questions we ask every year is, "What's happened to your R&D department's budget this year?" While those answering "It's been increased" went down 2 percentage points from last year, respondents saying "It's been cut" also dropped, by 3 points (meaning more than half said "It's about the same").
So, net, maybe you've got the same amount of funding to work with, but at least you'll be spending it on truly new products. New products as a priority took 2 points away from "cleaning up" current products (10 percent). Improving existing products gained a little (18 percent, up 4 percentage points), while cost control was flat, at 13 percent. Product line extensions dropped the most, down 7 points to 8.6 percent.
Actually, they're all priorities, aren't they? "Although my main focus within the department is new product development, I still spend time on product improvement, cleaner product decs, ingredient consolidation and line extensions," said Teresa Kloch, a food technologist at Perry's Ice Cream, Akron, N.Y.
"Continued improvement should never be short changed; you must find ways to service your customer needs without increasing their cost," wrote a guy at a poultry company.
Cleaned-up or simplified ingredient statements were mentioned by several respondents. "Our No. 1 goal is clean labeling; another is reducing carbon footprint," said one respondent in the write-in portion of our first group of questions. "We need to convey the simplicity of our products' ingredients. We have narrowed them down well, we just need to get the word out," said another. "We've had noticeable and worthwhile success with R&D in 2012, which helped us to decide to push it further in 2013," wrote one optimist. Perhaps the real answer to what your priorities are for 2013 was written-in by No. 391: "It depends on how busy we are."
Before we forget: This year, we had 514 responses to the survey, quite an increase over last year's 409 responses, and the highest number since we went direct to the R&D people, rather than to company spokespeople, in 2006. This survey was taken via a web poll during March.
Priorities for the year
There's a tiny contradiction in our survey answers – maybe it's the way we constructed it -- when it comes to cost control. While that answer stayed flat in our "prioritize" question, it made a strong showing as No. 2 (behind food safety) in another question that asks, "How strongly will the following impact your R&D strategy this year?"
Food safety does tend to overwhelm any discussion of operational priorities. At least in one case, Figure 1 also shows how a subject (Sustainable/Eco-friendly/Fair trade) can draw fewer first-place votes than other subjects but score higher than them in second- and third-place voting – that's what our "total score" column is about.
As for bigger-picture issues that will impact your product development team beyond the current year, there were two significant changes this year: more concern over staffing and less concern over going global.
While healthier/better-for-you foods, following consumer trends and regulatory issues kept their same positions as last year, all around 50 percent (respondents could vote for more than one concern), "personnel/labor issues" shot up from 17 percent in 2012 to nearly 28 percent this year. "Going global" moved in the opposite direction, from 25 percent last year to 18 percent this year.