1660319478944 Nestlestouffers

Four Breakthrough Food and Beverage Products

Nov. 13, 2015
Forget safe line extensions. These four processors took risks, developed new technologies and otherwise stretched their brands into new territory.

About a year ago, every Greek yogurt company unveiled, with much fanfare, a separate compartment for such mix-ins as fruits and cookie crumbles. Wow! A huge candy company miniaturized some of its leading chocolate bars and put them, unwrapped, in a small bag. Audacious!

Are these examples of groundbreaking new product development?

Download all 16 questions and answers (and charts) via this PDF.

The 100-year history and billion-dollar sales of the parent products seem to assure at least a modicum of success for these brand extensions. But will these ever grow into billion-dollar brands?

“Gone are the days when the big companies can create a big, sustainable success with a line extension,” says Leslie Herzog, a former Unilever product developer now in a consulting role. A longtime member of our Editorial Advisory Board, he’s now vice president of operations & research services for The Understanding & Insight Group, a strategy and business development firm for the consumer packaged goods industry, with the emphasis on consumer understanding.

“The big stores and their private label partners can knock off such a product quickly. For simple products, someone can always do it faster and cheaper. The big companies, the real food & beverage industry leaders, need to make technological breakthroughs and create real innovation, so they’re first to the marketplace and private label can’t imitate them easily.”

Perhaps because the economy is at least mildly building steam, "really new" product development gained a few points (cited by 42 percent of respondents) in our 44th Annual R&D Survey back in May. Meanwhile, line extensions were flat (at 12 percent) and cost control dropped 10 percentage points (checked off by 7.5 percent of respondents).

We acknowledge there's no denying the logic and profit in a Light version of Budweiser or even in a Straw-Ber-Rita (now, the original Lime-A-Rita was truly novel for a beer company). But let's take a moment to acknowledge the big companies that still manage to take risks and move their brands and their categories (if they fit into one) fast-forward.

Hormel Compleats breakfast microwave meals

It took seven years to make a shelf-stable egg breakfast.

All we gotta say up front is: Imagine scrambled eggs, shelf stable at ambient temperatures, safe for two or three years … ready after 60 seconds in the microwave (although technically you could eat them at room temperature right out of the tray). That's product and process innovation!

Hormel broke new ground in 2007 when it created shelf-stable meals in microwave-ready plastic trays. A new factory was built in Dubuque, Iowa, to make Compleats, which made beef stew, turkey & dressing and lasagna available in 60 seconds for lunch and dinner. They were an ideal lunch standby to keep in your desk drawer, not the office refrigerator.

But what about breakfast? The first meal of the day has garnered a lot of attention and growing market share lately, so it looked like too good an opportunity for Hormel to pass up. But was it possible to put eggs in a shelf-stable package?

"We knew from research consumers were not happy with the current offerings for breakfast: cold cereal or bars," says Jason Baskin, senior brand manager for microwave meals. "They wanted a hearty breakfast -- eggs, bacon and hash browns."

Hormel did have some breakfast competency with its meat businesses making bacon and breakfast sausages, but no real experience with eggs, although they're an ingredient in many of the company's products. And how to make eggs shelf-stable?

"This was an incredibly challenging product," Baskin continues. "We've actually been working on this project for seven years. Our R&D teams developed some proprietary technology to crack the code."

Any resulting product had to have the flavor, texture and color expected in eggs. "The egg is such a delicate ingredient, there's not a lot to hide behind," he adds. "Doing anything [extraordinary] with it is difficult. But there was a series of breakthroughs.

"First we figured out the color, but that affected the texture. Next we figured out the texture, but that affected the flavor. But the R&D team did a terrific job of bringing it all together.

"99 percent of the work was done in-house, although we did consult a little with outside experts," Baskin says. "As an industry-first product, there was not a lot of knowledge out there." The American Egg Board did help with some consumer research.

The breakfast Compleats were released in limited markets in 2013, and reached full national distribution last year. Four varieties were in the launch: Bacon Breakfast Scramble, Sausage Breakfast Scramble, Sausage Gravy & Roasted Potatoes and Apple Cinnamon Oatmeal (those last two did not contain eggs). The top seller has been Bacon Breakfast Scramble. Three more were added this year: Ham Breakfast Scramble, Turkey Bacon & Egg Whites Breakfast Scramble and Spam Breakfast Scramble.

The shelf life is similar to other entrees in the Compleats line: two to three years. The price is similar, too, at about $2.49. They heat up in 60 seconds in a microwave. Because they're fully cooked, they've been shipped to natural disasters for relief efforts – they can be eaten unheated right out of the tray.

"They really fill a consumer need for a hearty and complete meal for breakfast," concludes Baskin. "They've also brought some new consumers into the category as well as into the broader Compleats line."

Nestle/Stouffer's frozen dips (foodservice)

With 60 years of frozen experience, Stouffer's latches onto two hot trends.

Stouffer's has been putting out quality restaurant products since 1922. With a leap into frozen foods in 1954, the unit was Nestle S.A.'s first step into the frozen category when the Ohio business was acquired in 1973. But Stouffer's never forgot its restaurant roots, even as it deepened its experience with frozen products and also developed a foodservice business over the years: Nestle Professional.

Meanwhile, dips such as spinach-artichoke and queso cheese have become popular appetizers at venues like TGI Friday's and Applebee's. Hmmm … can you smell the business opportunity?

"Restaurant menus are featuring such dips, but they don't have to be made onsite," says Kevin Wassler, Stouffer's corporate chef. So Stouffer's started producing them for its foodservice business four years ago, and this summer reformulated them for another huge restaurant trend: gluten-free.

Appetizer dips are a stretch for Nestle/Stouffer's, although Wassler claims, "We're not entirely new to dips; we've done cheese sauces for a while." And while this is not a retail product, yet, "It could be at some point," the chef adds.

For now, the spinach-artichoke and queso cheese dips come frozen in 64-oz. pouches, four to a box. Restaurants need to only heat and serve them, although some outlets are adding some unique touches to call them their own.

The regular versions of these immediately did well, but recently there have been many requests for gluten-free versions – which required only minor tweaks to the recipes. "We had to replace some minor ingredients, traces of wheat and rye, and produce them in a certified gluten-free facility," says Wassler. "And of course we suggest they're served with gluten-free crackers or chips.

"Solon (Ohio) has a lot of experience with frozen foods, but we received a lot of help from the many food scientists and chefs Nestle has all over the globe, especially in reformulating the original versions to be gluten-free," says Wassler. However, Solon could be offering more help than receiving it from now on, as the locale was chosen for a Nestle R&D Center of Excellence -- for refrigerated and frozen foods -- which just opened this past summer.

The gluten-free versions just launched in July. "The demand has been good," says Chef Wassler, who notes gluten-free menu callouts are expected to grow 180 percent during the next four years, according to Mintel. "There's no discernible difference in taste between these and the gluten-containing products. So with these products, restaurants don't need to have two versions. A gluten-free one is all you need."

Johnsonville Grillers

The best of bratwurst and hamburger.

For 70 years, Johnsonville Sausage has been packing meats – mostly pork and more recently turkey – into casings to create some of the tastiest bratwursts and other sausages. Three years ago, the company's product developers scrapped the casing and flattened the brat to produce a patty, a branded, boxed burger in three flavors. The result, Grillers, is the only brat-burger available, the company believes.

"Pork is a great carrier for flavors," explains Jim Mueller, group marketing director. Grillers' pork is carrying such flavors as bacon-cheddar and mushroom & Swiss cheese. Steakhouse onion was added this year. Italian sausage was tried but dropped this year.

It wasn't quite as simple as forgoing the casing and flattening the brat meat. "We worked with a number of spice and flavor companies to perfect the flavor. A little came from their R&D labs, but most of it was done by our R&D department," says Steve Bembinista, associate brand manager.

Then came the manufacturing. "We developed a unique process to manufacture them and had to spend a little capex [capital expenditures] for new equipment," says Mueller. "For a while, we used some contract packers, but it took off so well we brought it all in-house. Now all Grillers are made in Johnsonville plants."

Actually, Grillers evolved from bratwurst patties first produced nearly 30 years, but they were fresh. Five years ago Johnsonville created frozen brat burgers, but they were in the typical foam tray packaging. The marketing department felt a picturesque box and unique name would help the product take off.

"We looked at a number of trends," says Bembinista. "Simple burgers were evolving into gourmet ones. A lot were mixing meats – adding bacon or pork – and adding unique flavors. Consumer research showed people were open to not just different flavors but also different [meat] proteins. Turkey burgers were catching on."

More than just the flavor of bacon or Swiss cheese, these brat-burgers have inclusions, so the added ingredients are clearly seen by the consumer – just as some bratwursts do. But they remain brats at heart with a spicy pork mix being the main ingredient and the only meat.
And they're doing well. "Grillers sales are up 30 percent over a year ago," says Bembinista. "Research tells us it has the highest 'net promoter' score of any Johnsonville product," a measure of consumer satisfaction paired with recommendations. "In accounts that have added Grillers to their burger department, it's grown the whole category."

And more versions and variations are possible. "We think we're on to something with this product," says Mueller. "We think it has legs for growth."

Snyder's-Lance Quick Starts

Taking Lance's cracker-sandwiches to breakfast.

For more than 100 years, Lance has been feeding America's between-meals hunger pangs with its sandwich crackers. No vending machine would be complete without slots for the little six-packs of Toasty and ToastChee, which are just tips of an iceberg that now includes more than 20 varieties.

The formula was simple and successful: cheese or peanut butter between two crackers. The occasion was always between-meal snacking. But about the time Lance merged with Snyder's (December 2010), the combined company began making the little cracker-sandwiches more wholesome, baking whole grains or malt into the crackers and cream cheese or honey in between. Lance made a small step into sweet products with vanilla or chocolate sandwich cookies.

With the recent interest in the morning meal, especially breakfast on the go, the company early this year introduced Quick Starts, a Lance cracker-sandwich made for the A.M. “The flavors for Quickstarts were selected based on popular breakfast flavors across food types – blueberry muffin, maple french toast, cinnamon roll, raspberry Greek yogurt for example,” says Eric Van de Wal, vice president of innovation.

He says there was no debate about whether this was a logical extension of the Lance brand. “Given our leadership in wholesome sandwich crackers and the trends in a.m. snacking, Quickstarts was a natural extension of our brand.”

All the R&D was done in-house; likewise, the company leveraged existing assets to manufacture the new platform.

All Quick Starts products provide good sources of fiber and B vitamins, 13g of whole grain per serving and 3g of protein.

Lance officials say the line is tied to the meteoric rise of the breakfast biscuit category, which surged 43 percent to $172 million in sales from March 2014 to March 2015, according to Nielsen data. Mondelez broke ground with BelVita, General Mills followed with a Nature Valley product and Post recently entered the race.

The new line was itself a quick start and was expanded “just in time for National Breakfast Month in September” with five new flavors: Everything Bagel, Vanilla Greek Yogurt, Raspberry Greek Yogurt, Granola with Chocolate Crème and Bacon Cheddar.

“The brand is doing well and some retailers have even asked for additional flavors,” says Van de Wal.

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