New product development is a game of risk versus reward. It can be costly and time consuming with a question mark over returns, but it is the only way to generate new ideas, identify gaps in the market and seize the newest opportunities.
In the context of the economic downturn, it has become a challenge to think ahead within the confines of squeezed budgets and what is fast becoming an all-out retail price war.
It’s a daunting process, but innovation is the lifeblood of any industry and can come from problem solving, partnerships or concepts filtering across the supply chain.
Morrisons is making a name for itself as an innovative retailer that is set to have four lab stores open by the end of the year, taking its Kirkstall outlet as a blueprint for stores in locations including St Albans and Wrexham.
This is part of chief executive Dalton Philips’ improvement drive and sees new products tested ahead of a wider roll out. And it clearly works as sales at the Kirkstall store are up 10 per cent.
Morrisons fired a new shot in the own-brand supermarket war this month with the relaunch of 11,000 products and the introduction of the M Kitchen convenience range, for which executive chef and head of innovation Neil Nugent has created 150 new lines that include a bistro range alongside Asian and Spanish-style dishes.
“Our brief is to give any help we can to a customer, from chopping an onion or buying a single onion to creating an exotic stir fry mix,” says Nugent. “We are also working on providing the ingredients for raw soup mixes such as leek and potato. We cut short the amount of time and effort on cooking for customers.”
But it’s not just the major retailers who are getting stuck into NPD. Some key suppliers have dedicated NPD teams, but it tends to be larger organisations with deep pockets.
Albert Bartlett produces around one in five of the UK’s fresh potatoes and has an NPD team of its own. Gillian Kynoch, head of innovation and development at the Airdrie-based firm, maintains that it is “fairly unique to have that focus”.
“We have an agronomist working on new developments as well as our own field trials,” she explains. “We are also working with three major seed developers. There are tests carried out on 200 varieties going into different climatic conditions. We then choose the top 30 and see how they work in the field, their resistance to disease and also taste. It’s important to work closely with the public so we carry out tests with them and work closely with a trained potato tasting panel in the south west of England.”
And sometimes risks pay off, as Albert Bartlett has seen with a number of its new launches.
“With Purple Majesty, we stepped over the comfort zone,” says Kynoch. “We brought this in from Colorado, America.” The gamble paid off as the distinctively coloured variety performed well in Sainsbury’s and Albert Bartlett will supply double the volume this year before going into full production next year.
The company also launched Elfe for Tesco Finest after coming top in consumer tests for three years in a row before it hit the shelves.
Another innovator is salad supplier Hazeldene, which takes it cues from further down the supply chain.
“The majority of our NPD is led by customers and we have a small team that works very closely with them to provide the best solution,” says Claire Simpson, group communications manager. “We have a wealth of experience, expertise and knowledge behind us and tap into this as much as possible. We have strong agricultural roots and excellent relationships with our growers and suppliers.”
And it doesn’t end there. Northern Irish firm Willowbrook Foods opened a £5.5 million factory site this summer, which has a modern food innovation centre that houses a 6,000sqft NPD kitchen.
Other fresh produce companies have joined forces to share the financial load and prove the adage that two heads are better than one.
G’s Growers and Produce Global Solutions are looking to step up their operations in east Cambridgeshire with a joint development of a mushroom farm near Littleport. This will provide locally and regionally sourced mushrooms to enhance the companies’ supply from the continent and enable market expansion. The development will create more than 160 jobs and produce about 130 tonnes of mushrooms each week. Most mushrooms consumed in the UK are grown overseas and the aim is to provide the UK with a more self-sufficient supply and cut down on transportation costs.
Also in the pipeline is a 2.5 megawatt anaerobic digestion plant located adjacent to the mushroom farm to provide renewable energy to power the facility using organic waste from the companies’ crop-growing operations in the area.
Another collaborative relationship is between GrassRoots Biotechnology and Monsanto, which have renewed their research programme until 2014, focusing on the design and development of promoters (segments of DNA) that enable crops to express trait genes that enhance and protect yield in a range of crops including corn, soy and canola.
Monsanto has also set its sights on pest control technology with the recent acquisition of Beeologics, which is focused on biological research.
The process
One of the major challenges in NPD is to keep the industry responsive to calls from the consumer, whether it is picking up on new trends or improving products.
Nugent believes in catering for an informed audience. “People are inspired by cookery books and TV programmes from Lauren Pascale to Jamie Oliver,” he says. “There are spikes on ingredients and we have to try and have the correct range and balance. We keep an eye on food trends to make sure we’re not left behind, such as food crazes like coconut water as well as the nutritional benefits of fruit.”
In future, Kynoch expects more attention on products that offer convenience for the consumer. “On the continent, there are developments in potato varieties that have thinner and thinner skins, so don’t need peeling,” she says.
Testing new ideas for customers is a complicated process. Foodservice supplier Fresh Kitchen’s head of food development Duncan Parsonage will not rest until a new product is right. He stresses that the new lines undergo “rigorous testing to ensure that no issues arise when the launch date is upon us”.
“In our state-of-the-art Fresh Kitchen facility, we have a skilled team of chefs that assist and advise when scaling batches. One thing is preparing a kitchen sample but when we are in full production, many issues can determine if the 230kg cook matches the sample. All new products will be thoroughly tested at a lab to guarantee they meet the shelf life from a bacteriological standpoint prior to sign off.
“It has been known for us to sample and re-sample and tweak in excess of eight samples to meet with our discerning customers’ requirements. Other times we can nail it on the second batch.”
Parsonage insists that striving for the best within budget is the ultimate aim. “We pride ourselves on being able to create a ‘silk purse out of a sow’s ear’ if we have low price parameters to work within,” he says.
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