In this increasingly consumer-driven economy, chief marketing officers (CMOs) in the food and beverage industry are driving organizational transformations beyond conventional advertising, point-of-purchase promotions and brand building. They have an increasingly large impact on product development.
Senior marketing managers create new visions, strategies and business models, while staying ahead of constantly changing consumer trends and social media, globalization and digital technology. They contribute new ways of thinking. In almost all companies with CMOs, the marketing department is closely aligned with product development; in many cases, R&D reports to the CMO.
Food companies look to their CMOs to drive an agenda that, in today’s dynamic environment, include responsibilities and expertise atypical of the traditional marketing position. They often manage social media and internet communications, which provide important information to and gather it from consumers, both positive and negative, which can have a dramatic impact on product innovation.
“In recent years, America’s food companies have tried to increase consumer sales by either lowering prices or cutting costs -- often both. This is a death spiral for most companies,” says John Stanton, a highly regarded professor of food marketing at Saint Joseph’s University in Philadelphia and our monthly Market View columnist (see his column from the July issue). “This has led companies to view marketing as a solution to the death spiral; that is, making products that consumers want to buy and not making consumers buy the products the company wants to sell.
“This has led the migration of power – ever so slowly – from the CFO to the CMO. The marketing officer will do whatever is possible to make the products that consumers want to and will buy. But in order for that to happen, two functions in the firm must get more resources: Marketing Research and R&D.
“In the new world of the CMO with more corporate influence, we should see greater emphasis on consumer-directed R&D and consumer marketing research,” Stanton continues. “We may not see all firms making that change but then again, we might not see those firms at all in the future!”
Some oversee R&D
"At Ready Pac Foods, R&D reports into the CMO," explains Galit Feinreich, relatively new CMO at Ready Pac Foods, Irwindale, Calif. a wholly owned subsidiary of France's Bonduelle. With 20-plus years of innovation and strategy experience, 12 of them at Nestlé USA's confections and snacks division, Feinreich joined the company in July 2016 as director of innovation.
Ready Pac has been moving up the value chain. Starting with pre-cut, fresh produce, it now offers salad kits in bowls that add meats, cheeses, fruits, even tortilla chips to the greens. "We are in lock-step [with R&D], able to act on consumer and culinary trends and develop products and innovation consumers want and need," she says. "At Ready Pac, the consumer comes first, so we have a nice balance of working on very applicable projects in addition to exploring and developing future innovation. I really enjoy working closely with our executive chef and food scientists."
During the past year, Feinreich led an R&D group of food scientists and culinary experts she says helped make substantial progress and delicious products in a relatively short timeframe. She says Ready Pac is most excited about trends driven by millennials and openness to ethnic cuisines. The company recently added a limited-edition roasted corn and pulled pork salad to its Bistro Bowl lineup in time for the summer grilling season.
"The genesis for that concept was elote, or grilled Mexican street corn," Feinreich says. "The response from customers and consumers has been incredibly positive. We now have the green light to move into more ethnic cuisines, regional flavors and more adventurous eating in general, which is a lot of fun for us."
The fresh category is at the center of today’s consumer needs, what she calls the intersection of healthy, delicious and convenient. "I was incredibly intrigued with the fresh meal segment, for which I have immense personal passion. I love salads more than the average person should, making it even more attractive.