1. © Food – a fact of life 2009 Why develop new products? To remain in business and retain a competitive position, companies need to produce new products, maintain or expand their market share and know what their competitors are producing. The aim is to supply the needs of the consumer at a profit. For a product to be developed it must be: economically viable technically viable Financial, technical and sales forecasting will be undertaken for new products to estimate the potential of the area. Product Development

2. © Food – a fact of life 2009 Key areas of Product Development During the past 10 – 15 years key areas of new product development have been: producing ‘convenience’ foods – in response to changing lifestyles; providing products with altered nutritional content – following the increasing public interest in nutrition, diet and health, e.g. low fat products; increasing the variety of products available – to provide more choice; producing ‘economy’ lines – to appeal to people on lower incomes; appealing to the ‘luxury’ market – to attract more affluent customers of those who wish to give an impression of status; maintaining and improving product quality – to retain customer loyalty.

3. © Food – a fact of life 2009 How many products fail? Reasons for failure may include: no difference between new and old product (50% failure) tough competition unsatisfactory distribution (very popular) rising cost of ingredients, production and packaging low profits poor, unattractive packaging food scares politics environmental concerns Many products will not make it through to final launch, but will fail at an earlier stage of development. For every 100 ideas, approximately 10 products are launched, giving a 90% failure rate. A year later, only one of these ten products will still be on sale. In order to spread the financial risk, a company is likely to have a number of products under development at the same time.

4. © Food – a fact of life 2009 Lifestyles Disposable incomes The 'keep-fit' society Health fears Trust in modern-day scientists or scientific developments People are being pushed into trying out new products as a 'quick-fix' rather than adopting a healthier lifestyle etc. Then, they find these products don’t do what they had expected, so they stop buying them Marketing products correctly and aiming them at the correct target group. Ineffective advertising or promotion Media hype Pricing products correctly (cost) Successful production methods and distribution networks Fitness for purpose Bad timing Poor product positioning on shelf Too innovative (ahead of its time) Fashions/fads

5. © Food – a fact of life 2009 Product life cycle The life of a product includes its time in development and the time it is in the market. It usually consists of the following stages: development introduction growth maturity saturation decline

6. © Food – a fact of life 2009 Extending the product life cycle Manufacturers plan for life cycles, often predicting how long a product will be profitable. Extension strategies. Being 'pre-active' (ahead of completion). Asset-led marketing (take a product's good points and use them to aim towards another market). Life cycles are extended by some of the following methods: Reviewing the outcome: Learning lessons, looking at feedback Continuous improvement Further market research Looking at competitors Examining possible product extensions and other future developments, e.g. developing 'ethical' versions or 'healthier' versions, New or novel packaging Different preservation methods Sources and types of ingredients Travelling the world to develop ideas further Marketplace intelligence; watching what is going on in the market. Observing what other companies are doing, new launches etc. Seeing what is happening in world markets. How does a particular product appeal outside the U.K?

7. © Food – a fact of life 2009 Observing 'healthy trends'. Making adjustments in line with healthy eating guidelines, e.g. '90% fat free'. Observing topical and ethical trends e.g. use of organic / Fair Trade ingredients Qualitative research which is used to assess product (or project) viability. The need to work creatively in the design or re-launch of a product. The need for new products and the need to maintain interest in them. Examples might include the extension of a Brand, such as Mars Bars; to produce various sized bars, different thickness of chocolate coating, different flavourings, ice creams, cake bars etc. The fact that risk is unavoidable, e.g., trying to meet a perceived need rather than a real one. Creating modern / trendy products that attract consumers and entice them. To prevent a decline in sales, companies usually employ marketing tactics to boost sales, such as: money off vouchers limited edition varieties new pack sizes ‘new’ and ‘improved’ varieties By doing this, sales of particular products can remain level for long periods of time.

8. © Food – a fact of life 2009 Stages of Product Development Extension/Foundation  Brief  Analysis and background research  Market research  Design specification  Generation of ideas  Concept screening  Development and Product Formation  Testing and Modelling  Final Product Development and Specification  Evaluation (product and process) Industry

9. © Food – a fact of life 2009 Stages of Product Development Product development is the process of creating new or modified food products. The aim of product development is to increase sales and maintain a company’s competitiveness. The process of product development involves a complex series of stages, requiring the combined talents of many specialists to make it successful. Manufacture of products is controlled throughout to ensure that the original specification is met. The products should fill a gap in the market. In addition, consumers must be tempted to buy the new products in preference to similar products.

10. © Food – a fact of life 2009 Initial ideas - Studying existing products is often used by product development teams to find new ideas for new products. - Competitors’ products provide a useful source of information for manufacturers, who carry out 'in house' testing on them. Such tests will include sensory evaluation and identification of ingredients, portion size, packaging, value for money and so on. -They may look for emerging social, cultural and lifestyle trends, gaps in the market, new technologies, new ingredients, new packaging and promotional techniques, new recipe ideas, emerging health and nutritional trends etc. There must be a concept for the product. This is attained in a variety of ways such as conducting market research, analysing consumer trends or modifying existing products. Usually the marketing department will provide the product development team with a brief for the type of product they want. (also see study existing products in marketing section) Study existing products

11. © Food – a fact of life 2009 Product analysis is carried out to: investigate how a product is made analyse the type and amount of ingredients used gain ideas for new product development compare differences between brands check that a product matches its specification Aspects of product analysis include: Describing physical attributes, e.g. appearance and weight Recording cost Undertaking sensory evaluation tests, e.g. appearance, odour, taste and texture Performing nutritional analysis Investigating ingredients used, e.g. type, source, weight and percentage Researching preparation or manufacturing techniques Considering shelf-life issues Reviewing its target group Looking at packaging, e.g. type, function and material

12. © Food – a fact of life 2009 This is where the initial ideas are tested to a specification. Home Economists or Food Technologists often work in test kitchens to try out new ideas and prepare them for further development. The test kitchen is as it sounds – a well-equipped, but small-scale kitchen where recipes are formulated for a product. The products are made up and then subjected to tests for consistency, taste and other aspects of the specification. The aim is to establish what the product ought to taste like and what it should look like. A small number of staff, experienced in sensory evaluation, test the products and evaluate them informally. On some occasions, if a company does not have a test kitchen, an initial concept for a product is sent to an independent developer. The aim is also to prepare the way for larger scale manufacturing. Much of the groundwork in the development of a new idea takes place in the test kitchen. The team in the test kitchen will be highly trained and skilled, not only as cooks/chefs, but also as sensory analysts, with a good understanding of the potential market and consumer demands. Food technologists will also work in the test kitchen, providing specialist support. The team will amend and modify the recipe and processing method until they are satisfied with the result. In this way a reference point is developed which shows what the product must taste like and what it must look like. Cooking times, temperatures and cooking methods will be examined. Some microbial testing may take place from the products produced in the test kitchen – food samples will be taken and removed to a laboratory for incubation and identification of microbiological colonies. Experiments may take place with packaging materials and the effects of storage may be tested. Test kitchen

13. © Food – a fact of life 2009 Sensory evaluation (also see separate PP) When an acceptable product has been made in the kitchen it is then produced using pilot scale equipment. A pilot plant is a small version of the equipment used in manufacture. Many manufacturers have these facilities. They produce the product on a small scale, but in the same way as it would happen during large scale manufacture. This allows them to judge whether the product can be successfully produced on a large scale, and whether it meets the original specification. Enough product must be made for market research and sensory evaluation to be undertaken. It is usual for sensory evaluation to be carried out at many stages of the development process. Trained assessors comment on the appearance, odour, taste and texture of the products to make sure that the product being developed displays the desired characteristics. The assessors are able to do this with great accuracy. Additional sensory evaluation and recipe modification can be undertaken to deal with any problems which are identified at the pilot plant stage. Pilot plant

14. © Food – a fact of life 2009 A product specification is a detailed list of criteria/features the product should meet. The product is tested/measured against these criteria to ensure quality and consistency of the end product After testing and modifying the product on the pilot plant, a final product is created. This details exact ingredients and precise methods of production. The specification is very important as it will be used for the production of each batch of the product to ensure consistency. Product specification Consumer testing Many manufacturers test new products on potential consumers before moving on to large scale production. If the new product is targeted at a particular group of the population, the consumers will be selected from that group, e.g. vegetarians. Otherwise, the company will try to ensure that different sub-groups are represented, e.g. males and females from a variety of backgrounds across a range of ages.

15. © Food – a fact of life 2009 Consumer testing Three main methods are used: Group discussions – usually up to 8 people are involved in a discussion run by a trained person. The aim is to hear a detailed view of a new product. Street interviews – people are asked to taste samples of the product and say what they like or dislike ; this produces a 'snapshot’ of opinions about the test product. Home trials - consumers are provided with a product and asked to try it at home. This gives the opportunity to sample the product in a ‘real life’ situation and to have a response from the whole family. The trial may result in minor changes to the product specification and the manufacturing process.

16. © Food – a fact of life 2009 Scale up Once the company is confident that the product is likely to succeed, it is ready for large scale manufacture to begin. The manufacturing process is sometimes organised in unit operations, such as size reduction, mixing and cooking. These are controlled to maintain consistent product quality, safeguard, staff health, food safety standards and to avoid problems that may stop the production line running, which would result in ‘down-time’.

17. © Food – a fact of life 2009 Launch Some new products are shown at a trade launch. This is intended to allow large supermarkets and distributors to look at and sample the products. Often deals are made at this stage for sales. Sometimes products are launched in different regions of the country to measure their performance. This may indicate whether the product could be launched at a national level or should be dropped from production. Advertising then takes place to let the consumer know that the product is available. Finally the new product is launched. After a fixed period of time, products are always reviewed to see how well they are performing.

18. © Food – a fact of life 2009 Use of cheap vs expensive ingredients Consumers are increasingly governed by taste and organoleptic qualities. If a product does not taste good, it is not likely to succeed. Using cheaper ingredients can affect the overall quality. Building a good reputation is especially important for food producers, particularly smaller businesses who do not have existing bestselling products to fall back on. Many consumers are health conscious and are thus keen to purchase top quality ingredients, believing these to be better nutritionally. The better the ingredients, the more likely the product is to taste like the ‘home-made’ equivalent, which is what many consumers desire. Some people prefer to pay more for better ingredients and won’t even consider cheaper products. Bad press can ruin a food company through loss of sales. Cheaper ingredients are sometimes unpredictable and may let you down, e.g. cheap oil which may easily go rancid, cheap plain flour which may be low in gluten and thus may produce a weaker structure for baked products. ‘Cheap ingredients’ could include basic food commodities such as flour, spreads, bread, rice and pasta; but could also include foods such as chocolate ‘flavour’, strawberry ‘flavour’ or foods that are chemically contrived and contain very little in the way of nutrients at all. Use of additives, flavourings, flavour enhancers, bulking agents and modified starches Some cheap ingredients such as basics: flour, pasta, rice, etc. can be nutritious and therefore very good value for money. Making products from ‘inferior’ ingredients means the manufacturer can buy more to generate profit and cut down on quality. There may be uncertainty about the origins of cheaper ingredients and there may be no come back if the manufacturer is unhappy. Ethical issues, such as battery farming, Fair Trade, sourcing from ‘dodgy’ sources, which may not comply with FSA regulations, poor standards of quality, hygiene, local sourcing.

19. © Food – a fact of life 2009 Influence of scientific and technological innovation Packaging developments have meant that new products can be developed, e.g. packaging in relation to food preservation, food production, presentation, storage, reheating and cooking. New methods of manufacture e.g. 'cook-chill' New ingredients, e.g. modified starch, pro-biotics, cholesterol-reducing fats Food additives such as anti-caking, anti-foaming agents which make mass production easier Developed understanding of Food Hygiene, HACCP and Risk Assessment systems, which have made mass production safer for the consumer Effective QA systems in place with the aid of CAD and CAM Better research, use if ICT and nutritional understanding Consumer access to fridges, freezers and microwaves, which has enabled the ready meal industry to boom In-store bakeries which have benefitted form the Chorley Wood method of bread dough production www.dovesfarm.co.uk/about/the-history-of-bread/the-history-of-bread-the-chorleywood- bread-process/ The Chorleywood process is able to use lower protein wheat to produce bread, this development has enabled more bread to be produced in the UK where our wheat don’t normally have a high protein content. The process uses intensive high speed mixers to combine the flour, improvers, vegetable fat, yeast and water to make the dough. The whole process from flour to a ready loaf can be done in about 3 ½ hours. www.dovesfarm.co.uk/about/the-history-of-bread/the-history-of-bread-the-chorleywood- bread-process/ Development of air travel and sourcing ingredients from abroad The use of nanotechnology