2005 Annual R&D Survey

Our R&D readers see themselves making small product improvements in 2006 with an emphasis on health and nutrition.

By Frances Katz, Senior Technical Editor

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Editor's Note: Food Processing apologizes to Kraft Foods and to our readers for an error that appeared in the print version of this article and, until Nov. 7, in the text below. The article had stated, "From the extensive list of new patents, these products could well be cheese with 'surprising new flavors' based on ricin, a bacteriostatic material that will positively affect food safety." The correct spelling of that bacteriostatic material is nisin; the text below has been corrected accordingly.

In 2006, food processors will focus on cranking out healthful products.

2006 and the following couple of years likely will be a time of incremental product improvement with the emphasis on functional foods, fortified foods and natural/wholesome foods, according to respondents to our 34th annual Top 100© R&D Survey.

As for day-to-day worries, R&D department heads will most closely be watching the development of more healthful foods in 2006, with an identical percentage also concerned about staffing and personnel issues.

Our annual R&D Survey was sent to all companies in the Food Processing Top 100© list of the largest food and beverage processors in the U.S. and Canada. Recipients were vice presidents of research and/or R&D, research directors, directors of quality control/assurance and managers of specific research projects. (Editor's Note: To access all the graphics that illustrate the survey findings, click the Download Now button at the end of the page.)

The survey was taken via e-mail in July and August, about the time most recipients were beginning budget planning for their departments in 2006. Our survey found research departments:
  • Participating more on cross-functional product (and process) development teams.

  • With slightly less of an emphasis on cost-cutting than our survey found last year and slightly more emphasis on incremental product improvement.

  • Coping with shorter development cycles – nearly two-thirds indicated most product developments are expected in nine months or less.

  • Making more use of outside resources, especially supplier expertise.
The R&D departments at the companies we talked to always are charged with product development (of course), but frequently also are involved with pilot plants for some engineering activities, and about half are involved with initial plant runs. A little more than half of the departments are involved with regulatory activities, and R&D departments at a few companies get involved with some market research.

About half are involved with the research impact of food safety, but we did not consider quality control as part of the department (although some volunteered they were spending considerable time on it).

Who's on the team?

Most firms say they use cross-functional teams for a variety of activities: cost cutting, product improvement, new product development, developing prototypes and package design. There appears to be more product improvement going on and a little less cost cutting this year compared to last year's survey responses. That's certainly a good sign.

A couple of respondents mentioned their companies sometimes develop the product outside and put a team together to bring it into the plant. When asked if this caused a problem with team members not knowing the product from the beginning, they didn't think so.

"We're doing more outsourcing," noted one R&D head, whose company had entered into an agreement with a new firm that designs proprietary flavors, flavor enhancers and taste modulators for special products. While that's on the more aggressive end of outsourcing, it seems just about everybody does at least some.

Who is on the product development team provided some interesting answers. Manufacturing is just as heavily represented as is R&D (about the same ratio as last year's responses) and marketing remains a close third, but finance appears to have gained some more representation and suppliers are now on a remarkable 46 percent of all these teams.

There are a few more international companies in this year's panel, and a few more teams include international members. In addition to outsourced development, there are several companies that have entered joint ventures to develop proprietary ingredients, such as grains.

We noted an increase in outsourcing of specific parts of a project, to identify flavors or textures that are unique to that product. "We're too busy to spend more team time on a problem than we have to," said one respondent. "Team members understand that and welcome the help." In some cases the outsourcing is outside the team structure, especially if the technology is proprietary.

Cross-functional teams are evolving. According to at least one research director, cross-functional teams now take less time, as just about everyone is trained, and many team members handle multiple team assignments. "There's less bickering than there used to be."

Where do researchers go for help?

We know the sources of assistance are changing. The appearance of companies like Senomyx Inc., a firm that studies flavor receptors and similar work for selected companies, and Renessen, a joint venture between Monsanto and Cargill that is charged with developing specialty traits in crops, changes the supplier dynamic.

Suppliers, too, commented on the changing dynamic: "We're more selective about who we work with. It's too expensive to provide specialty ingredients to companies that don't have a good track record of new product introductions." Further complicating the dynamic is suppliers who are also manufacturers.

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