Key Issues in New Product Development
In the context of the down turn in the world economy we need to separate the macro economy from the micro economy at corporate level. As a result of the impact of the down turn, affecting some countries more than others, the corporate world at micro level is reacting in a self protective manner and “many business plans are now actually restructuring plans” (Boland 2010) with divestments and downsizing the order of the day.
This reaction, while understandable, will not get us back to where we were in early 2007. That world no longer exists and the sooner we accept that the sooner we will effectively grow our economies again. New product development (NPD) and innovation needs to be part of the strategic planning. NPD is a critical factor for building competitive advantage in the domestic or global food market suggests a recent business insight report of Data Monitor. This gives an insight into future innovations in food and drinks up to 2015 outlining trend convergence and emerging growth opportunities.
The corporate food and drinks industry on occasion may be dismayed with returns on investment achieved through new product investment. Building on the existing product range through incremental innovation and category repositioning should be considered as a more effective strategy in the current climate. Engaging in a single-minded policy focus on profit runs the risk of losing the opportunity to make any profit at all.
Where then does the process of new product development (NPD) lie in the business plan? It is worth remembering when markets work they do so because new product ideas are being constantly tried out. Most products may fail but those that succeed, cause older products to fail instead. In the USA 10 % of businesses disappear each year. Consequently NPD and innovation must be part of the strategic planning and this activity is what will restore profitability and ensure the survival of companies.
Companies engaged in the food processing industry, whether primary or secondary manufacturers, achieve their corporate objectives through the satisfaction of the perceived needs of both their customers and consumers. This innovative process is achieved through the NPD process.
To appreciate and understand this process fully we need initially to be clear as to what constitutes a new product. Fuller (1994) addresses the basis of this issue and suggests that a definition of a new product is “a product not previously marketed or manufactured by a company”, The process of NPD, he suggests, may be further elaborated: “...either the development and introduction of a product not previously manufactured by a company into the marketplace or the presentation of an old product into a new market not previously explored by the company”.
The term NPD is not simply about the creation, manufacture and marketing of absolutely new products rather it may also be applied to old products in new sizes or new or different types of packaging, not previously employed, or an original product presented in a package suitable for an alternative way of re-heating or cooking.
The reality of course is that NPD is all of these things and should be seen as the lifeline of the company. It is nevertheless an extremely risky business and the number of introductions is increasing at an exponential rate targeted at an ever more discriminating consumer whose demands are ever increasing. Products must be nutritious, support wellness and wellbeing and possess positive health properties. Convenience, safety, competitive pricing, ease of container disposal for recycling are also demanded but to a greater extent are now taken as a given.
Companies engaging in NPD fall into a number of categories. This continuum is from the very small owner / sole trader types of business, through the small / medium employers (SME) to large and multinational conglomerates.
Corporate size may affect the NPD success rate achieved, though not necessarily in favour of larger / multinational companies. In large / multinational companies there are separate fully staffed departments engaged in managing marketing, consumer product research and development, legislation, container evaluation, environmental compliance and processing. This ensures that all issues impacting on the product are properly evaluated thereby minimising or reducing the risk of failure.
In this paper I will deal with some aspects of NPD which impact on the smaller operation and which I consider of critical importance. If taken into consideration they may have a favourable influence and increase the success rate. In practice I have used the NPD model contained in Kotler (1976). This book is years old but the model is still realistic.
All of the following pitfalls ought to be avoided at all costs as their negative impact on NPD can render the process null and void.
While there may be a multitude of sources of ideas for NPD when brainstorming is used to generate ideas ‘in-house’, care should be taken not to have the brainstorming team overloaded with experts, be they marketing or technical. Neither should the rank of individuals who participate in the brainstorming team, to generate new product ideas, be allowed to put the process at risk. If rank is allowed to influence proceedings it may be counter-productive with some ‘good’ ideas failing to be included in the list. Neither should ideas requiring processing technologies not currently part of the company processing portfolio be discarded, especially if considered ‘white hot’ certainties, if there is ever such a thing. All products can be manufactured elsewhere under brand licensing agreements or joint ventures. If the product becomes a huge success the company could at a later stage develop or acquire the facilities needed to bring the product in-house should it wish to do so.
On occasion sales penetration of new products in the market place may suffer from an indirect branding issue which may have more to do with both customer perception rather than consumer perception. If the company packs branded canned meats and it introduces a dessert product such as peaches in syrup under the same brand, sales may struggle to become established because this product may be seen by retailers as not fitting in to their perception of the company’s product portfolio, although the canning process used for meats is similar though more severe in terms of heat sterilisation than that required for canned fruit products.
Developing a brand name can also present difficulties with so many product names now patented. A serendipitous approach may help. Many, many years ago a wine producer of cabernet sauvignon reserved for himself an exclusive batch of this wine. To keep thieves away from his private reserve he spread the rumour that the devil was frequently seen in the cellar where these fine wines were laid down. Subsequently it became known as casillero del diablo (cellar of the devil). In more modern times his descendants in that particular company decided to brand this reserve wine as Casillero del Diablo and it is now a highly acclaimed international brand.
In another case a company introduced a concentrated juice drink product which required the consumer to add 4 times the quantity of water to the concentrate to reconstitute it into a ready-to-drink form. In describing the manufacture of orange juice from concentrate (OJFC) a minute taker incorrectly spelt the word squeeze as ‘sqeez’ and it ultimately became the name of a very successful new brand.
Technical and manufacturing developmental issues
In the context of food science and technology NPD is much more than simply putting a product recipe together, putting it in a container, processing it, sticking a label on it and hoping for the best! A review of the more critical issues may prove beneficial. As sensory issues are dealt with elsewhere in this volume, suffice it to say that those charged with evaluating the sensory characteristics of the new product are properly trained, tested and skilful in this important aspect of NPD.
All aspects of the product, from recipe development through pilot plant trialling and storage testing, must be properly evaluated and issues arising addressed, resolved and signed off before turning it over to manufacture. This will require close interaction between NPD and technical personnel including where necessary manufacturing staff.
Product specification document
The new product prior to being put into manufacture requires that a new Product Specification Document complete with the associated HACCP plan must be prepared and this should encompass:
Supervisory and operator training in all aspects of the manufacture and handling of the new product is a vital requirement for success.
The quality checks necessary during manufacture arise from both technical issues and marketing issues associated with ensuring the product “does exactly what it says on the can” in practice.
In the early introductory phase all complaints, both customer and consumer complaints should be monitored extremely closely as they may well identify an issue or issues not fully thought through in the developmental stage. Moir et al. (2001) suggest “spoilage of processed foods usually occurs as a result of contamination, underprocessing, or inappropriate or incorrect storage”.
Customers benefit from product differentiation (Kotler et al. 2009) but retailers are under increasing pressure to stock more and more products on limited shelf space so it is necessary for the manufacturer not only to get it right first time but right every time.
Some issues often overlooked are what lacquers / sealants are used in the container including the end sealing operation. Is bisphenol A lurking there with its negative connotations? In selecting the container is it over engineered? Perhaps it can be ‘light weighted’. Is there an awareness of legislation and codes of practice governing materials in contact with food and have these issues been addressed? Accelerated shelf life testing can assist with this. Is it absolutely necessary to use a lacquered container, or if not, as in the case of canned foods, if a tinned steel can is employed, is the amount of metal picked up by the product over its projected shelf life within the levels of safety laid down?
Has a rigorous HACCP been developed and documented? Or more importantly will the product be monitored for compliance in practice?
Powdered ingredients – powders / additives
Have possible hazards been identified and precautions implemented and additional training for staff in packing and handling the raw materials or additives used addressed?
In manufacture, if powders are in use, are there any occupational health and safety precautions necessary to be implemented so that manufacturing staffs’ health is not compromised by inhalation of powders? Are personal protective equipment (PPE) aids needed and supplied.
Have heat penetration tests been carried out to ensure the process is safe and adequate for the projected shelf life of the product? In addition, have storage testing been undertaken and signed off to ensure that the product will withstand normal storage conditions?
Use of unnecessary additives
On occasion companies need to ask themselves are all the ingredients in the recipe necessary, is the level of salt or sugar unnecessary or too much? (Bill Stratam 2006) suggests that “[We] need to understand that some chemicals that are part of our daily lives may also play a part in ill health” If an adjuvant or adjunct additive or colour is considered necessary then have it checked to ensure that it is approved by State Authorities. If so, does it also meet legal requirements in a proposed market which might be in another jurisdiction?
The less additives used in a product the better is a good rule of thumb.
Cleaning and sanitation
It is also necessary to ensure that all vessels used in manufacture are sanitised thoroughly prior to use and the sequence of products packed on a multi-product packing line undertaken in such a way as to avoid the issue of adventitious co-mingling. This could have implications for perceived adulteration, for example, of a ‘pure’ juice product, whereas in a juice drink product with lower juice content such contamination may be benign or have no impact at all.
Storage of raw material on new pallets, especially freshly painted timber pallets, can introduce foreign taints into the packed product. As regards the finished product we need to ensure that storage conditions do not impact adversely with the container. Issues such as the lack of temperature / humidity control can result in rusting of cans. For products packed in other types of packaging are there any special temperature and humidity conditions required for the storage of the new product both at the manufacturing site and in distribution and retailing?
Attention to these issues outlined above can smooth the NPD process and lead on to success.
It is worth bearing in mind that food scientists and technologists working at the coal face in industry can avail of advice from former professors, teachers and lecturers from college days who will willingly support their graduates in industry as part of a mutually beneficial relationship in all aspects of these matters. Industry, on the other-hand, will facilitate student placements which are increasingly an important feature of the development of food scientists and technologists.
Memberships of the national Institute of Food Science and Technology or its equivalent and through its affiliation with organisations such as the pan European EFFoST; the global IUFoST and the highly regarded IFT can be a very effective way of networking and resolving issues which can speed up NPD process.
Making as much use of government agencies and services and government publications can be hugely beneficial as companies traverse the NPD process.
In Ireland, the Ashtown Food Research Centre provides formidable assistance in terms of NPD as does the Dublin Institute of Technology. In the UK the Campden BRI centre based at Chipping Campden provides similar services especially to its corporate members.
Industries own representative organisations have various committees which explore and assist companies in meeting legislative responsibilities for the products they market. The European Fruit Juice Association (AIJN) has developed a Code of Practice which is scientifically based and which fully defines and describes fruit juices, and the International Federation of Fruit Unions (IFU) has developed a comprehensive Manual of Chemical and Microbiological Testing Methods for juice products.
The Food Safety Authority of Ireland has created a series of codes of practice and guidance notes which are designed to assist industry, especially SMEs, in meeting the requirements of Irish and EU law. The regulatory authorities are there not only to regulate the market in terms of food safety and compliance but also as a support to industry. This interaction fosters good relationships and the companies should consider their support as a way to avoid unnecessary unseen complications and ensure when the product hits the shelves it is as it should be: safe and nutritious and well received by customers and consumers alike.
Boland, D (2010) Uncertain times call for creativity. Sunday Business Post, 21 February 2010. Dublin, Ireland: p N 32.
Fuller, G W (1994) New Food Product Development from Concept to Marketplace. London: CRC Press; p 2.
Kotler, P (1976) Marketing Management, 3rd Edn. London: Prentice Hall Inc; p 198.
Kotler, P, Keller, KL, Brady, M, Goodman, M and Hansen, T (2009) Marketing Management. London: Pearson - Prentice Hall; p 519.
Stratam, B (2006) The Chemical Maze Shopping Companion Chichester, UK: Summersdale Publishers; p 9.
Moir, CJ, Andrew-Kabilafkas, C, Arnold, G, Cox, BM, Hocking, AD and Jenson, I (2001) Spoilage of Processed Foods: Causes and Diagnosis. Food Microbiology Group, NSW Branch, Australian Institute of Food Science and Technology Inc. Waterloo, NSW:
Rory Ryan was Chief Chemist and Head of Technical, Safety and Training Functions at Bachelors Ltd, Dublin, Ireland before his retirement in 2007. He is a Past (1995-97) and current (2007-) President of the Institute of Food Science and Technology of Ireland, a Past President (2000-04) and Lifetime President (2005-) of AIJN- the European Fruit Juice Association, Chairman of the Industry and Commerce Committee 2007-2010 and a member of Council of the Royal Dublin Society 2008-, and a member of the Editorial Advisory Board of The World of Food Science; E-mail: email@example.com