"Labor costs are of vital concern right now, and an increase in the federal minimum wage will be catastrophic," wrote one man, who earlier indicated cost control was his top priority for the year. "We are adding additional R & D resources, both people and bricks and mortar," commented another. "Our company spent more resources in the R&D function, and I got more training and opportunities to develop myself," said one appreciative product developer.
On the other hand, one person mentioned "increasing competition from China" as a concern.
Despite the fact the Dietary Guidelines are two years old, they still have an impact: 18 percent – 1.5 points more than last year – said the guidelines are "huge." But those noting they are "reasonably important" to R&D efforts dropped from 58 percent to 53 percent.
As for which ingredients you're most interested in adding or removing, salt/sodium remains public enemy No. 1 with 39 percent – that's 8 points lower than last year, perhaps indicating many of you already have made progress on that front. Reducing sugar was second at 27, about where it was last year. All three suggested additions – fiber, whole grains, fruits & vegetables – scored around 20 percent.
"We already removed transfat and reduced sodium. Other issues aren't a big deal," wrote one respondent.
There were quite a lot of write-ins and "others" for this question. Top add-ins were protein, probiotics and omega oils, while favorite removals were gluten and other allergens.
Who's calling the shots?
Our readership is pretty evenly split between larger companies (more than 100 employees at the location to which we mail the magazine) and smaller ones. That diversity is apparent in many of the organizational questions.
62 percent of you have a formal product development team, a number that has been shrinking, perhaps insignificantly, in recent years (it was 70 percent in 2011 and 68 percent in last year's survey). (By the way, 7.5 percent say "sort of.")
Likewise, the dominance of the R&D Dept. on that team shrank a little, too, although it's still powerful at 82 percent. "Who's on that team?" is one of those questions where you can select more than one answer and, ironically, every category except R&D increased. The big gainers were representatives from corporate management (up 12 points), purchasing (up 10), finance (up 7 points) and manufacturing (up 7).
As our February cover story attested, open innovation is catching on. 23 percent of you count multiple suppliers as parts of your product development team (up from 18 percent), and 17 percent include outside consultants (up 6 percentage points).
But all the remarkable numbers were merely returns to 2011 levels, so maybe last year's poll was an anomaly.
The same goes for who influences annual goal-setting in product development. The R&D Dept. dropped an insignificant bit, but every other category (top management, mid-level management, and manufacturing/plant operations) made significant gains. Marketing and sales scored the same.
If you have a formal product development team, you've got to have meetings, right? Well, yes, for three-quarters of you. The biggest plurality meets at least weekly (27 percent). And 5 percent of you say the meetings are often virtual because of so many offsite folks.
Internal research is still the main element of identifying new product ideas, but here, too, the open door is apparent. 42 percent of you rely somewhat on research provided by suppliers, and 16 percent use an external product development company. 43 percent say you practice open innovation.
So after all the research and meetings and input, how long does it take to get that baby from concept to the grocery store? Looks like the pace is quickening. The longer wait times dropped, but six months picked up 7 percentage points and three months increased 4 points.
Our final question is a catch-all: Is there anything we missed or anything you care to add? A couple of the answers are worth noting:
- Reducing product lead times.
- Communicating and measuring performance once the product is commercialized.
- Switching to natural colors and flavors.
- On the manufacturing side, reducing SKUs saves us on changeover times and waste and saves potential customers on cost.
- Self reliance on green power – we're looking at self generation, i.e., solar.
- Instead of looking for diamonds amongst the stones, we need to polish the stones first. We need to catch up and finish."
And maybe the best advice, from a guy at a North Carolina microbrewer: "Focus on core product and values, and don't get sidetracked."