Future Innovations in Food and Drinks to 2012: NPD, trend convergence and emerging growth opportunities

Published by: Business Insights

Published: Feb. 1, 2007

Table of Contents

Executive Summary

Trend convergence

Developments in innovation

Types of innovation

Global NPD evolution

Future innovation trends

Conclusion

Chapter 1 Trend convergence

Summary

Introduction

Increasing convergence of key market trends

Healthy food and drinks

Indulgent food and drinks

Convenience

Ethical food and drinks

Chapter 2 Developments in innovation

Summary

Introduction

NPD and building competitive advantage

Key drivers for future NPD

The innovation challenge

Solutions to innovation challenges - the Procter & Gamble case study

Re-inventing the innovation model

Consumer rather than R&D driven

A global network of external innovation partners

Proprietary network

Open network

Portfolio management

Adapting the culture

Illustration: Pringles Print

Conclusion

Enhancing innovation through strategic partnerships

Innovation partnership management at Nestlé

Tapping into technology centers

The role of ingredients’ suppliers

Partnering with media companies

Engaging consumers in product innovation - the net revolution

Chapter 3 Types of innovation

Summary

Introduction

The NPD cycle

Innovation success metrics

Types of innovation

Introduction

Breakthrough innovation

Incremental innovation

Category repositioning

Line extension

Importance of the types of innovation

Chapter 4 Global NPD evolution

Summary

Introduction

The evolution of NPD by product category

The evolution of NPD by region

The evolution of NPD by product tag

Innovation levels by product category

Innovation levels by region

Innovation levels by type

Innovation by formulation

Innovation by positioning

Innovation by technology

Innovation by packaging benefit

Most innovative food and drinks companies

Chapter 5 Future innovation trends

Summary

Introduction

Health

Wellness and wellbeing

Weight management

Energy and vitality

Targeted nutrition

Nutraceutical foods and drinks

Premium/gourmet

Guiltless gourmet (low cal/low fat gourmet)

Super-premium

Authenticity

Novel flavor combinations

Ethnic food repositioned

Convenience

On-the-go

Freshly prepared

Innovative packaging for flavor/nutrition preservation

Chapter 6 Conclusions

Summary

Introduction

The importance of innovation

Developing adequate innovation models

Key product innovation trends

Index

List of Figures

Figure 1.1: Convergence of the major trends

Figure 1.2: Organic, premium, healthy and ethical olives

Figure 2.3: Areas of investment important for building a competitive position over the next 5 years

Figure 2.4: The importance of key drivers for NPD over the next 5 years

Figure 2.5: Obstacles to innovation

Figure 2.6: Pringles Print Trivial Pursuit

Figure 2.7: Key future sources of product innovation for food and drinks companies over the next
5 years

Figure 2.8: Green Mountain’s fair trade PBS Blend

Figure 2.9: Kettle Chips’ “Crave-O-Meter” consumer feedback platform

Figure 2.10: Consumers pick the next Danette flavor

Figure 3.11: Present and future NPD cycle

Figure 3.12: Most important metrics for measuring innovation success in food and drinks industry

Figure 3.13: Innovation/product attribute matrix

Figure 3.14: OMU yogurt drink

Figure 3.15: Flora Inc.’s super-premium Omega Truffles bar

Figure 3.16: Kellogg’s cereal products’ category repositioning

Figure 3.17: Rosenborg’s Pear and Cranberry blue cheese lines

Figure 3.18: The types of innovation most important for food and drinks NPD today and in the
next 5 years

Figure 4.19: New product launches by category, 2004-2006 (% of overall product launches)

Figure 4.20: New product launches by region, 2004-2006 (% of overall product launches)

Figure 4.21: Percentage of food and drinks products launched in each category that were classed as
innovative, 2004-2006

Figure 4.22: Percentage of food and drinks products launched in each region that were classed as
innovative, 2004-2006

Figure 4.23: The region that will have the most innovative companies over the next 5 years

Figure 4.24: Innovation by type, 2004-2006 (%)

Figure 4.25: Danone’s Danino “brain health” yogurts for kids

Figure 5.26: Share of products launched in each overall trend, 2004-2006

Figure 5.27: Most important trends for future food and drinks NPD

Figure 5.28: Most important health trends for future NPD

Figure 5.29: Nativa Yerba Mate’s “wellness” herbs

Figure 5.30: Nutrition for the body, mind and soul

Figure 5.31: Enviga, the “calorie burner” sparkling green tea

Figure 5.32: The new FRS Antioxidant Energy Drink

Figure 5.33: Energy drink for teenagers from Stonyfield Farm Organic

Figure 5.34: Yoplait’s Essence “wellness” drinkable yogurt range

Figure 5.35: Most important indulgent trends for future NPD

Figure 5.36: Whole grain bread that tastes like white bread

Figure 5.37: Paradise Coffee’s Kopi Luwak super-premium blend

Figure 5.38: Caranda Teas’ Organic African Gourmet Iced Blends

Figure 5.39: Ehrmann’s sweet and sour flavored cheese desserts

Figure 5.40: Alcohol flavored food products

Figure 5.41: Giacomo “Bombay Style” Green Tea-Lime premium yoghurt drink

Figure 5.42: Most important convenience trends for future NPD

Figure 5.43: Molkerei Lanz’ dual-consumption yogurt

Figure 5.44: Lifestream’s Pie Oh My! microwaveable pies

Figure 5.45: Emmi Schweiz AG’s Lacto Tab Q10

List of Tables

Table 4.1: Top 20 product tags on innovative products, 2004-2006

Table 4.2: Most innovative food and drinks companies

Abstract

• Enhance the effectiveness of your innovation strategies with this report’s analysis of the innovation models of leading food and drink manufacturers, including Procter & Gamble and Nestlé, and actionable recommendations for choosing an innovation strategy.
• Assess the key trends in food and drinks innovation based upon this report’s analysis of Productscan data from over 75,000 product launches between 2003 and 2006 detailing regional contribution, category coverage and product claims.
• Benchmark leading executives opinions on the future of food and drinks innovation using this report’s analysis of our proprietary global survey detailing the key issues affecting the future of NPD and innovation in the food and drinks market.
• Identify new and emerging market opportunities using this report’s extensive analysis of the most innovative new product launches, trends in NPD and convergence.

• Improving return on investment. Industry surveys show that the majority of food and drink executives are dissatisfied with the return on their investment in innovation.
• Understanding changing market trends. The increasing convergence of “health”, “premium” and “convenience”, combined with the emergence of “ethical” in the food and drinks market is reshaping product innovation. This report explores the direct impact of convergence on NPD.
• Choosing the right innovation strategy. Many companies place too much emphasis on line extensions. This report explores the effectiveness of different strategies, their usage and gives concrete examples of recently launched products.
• Leveraging external sources. The report analyzes the potential for developing partnerships with external sources, such as suppliers, research centers, universities and private individuals.

• Consumer health will continue to dominate innovation. 39.1% of all products launched between 2004 and 2006 had a healthy proposition.
• External sources of innovation may be quicker and more cost effective, in spite of this the industry relies heavily on internal sources.
• Convergence of the health, premium, convenience and ethical trends is set to intensify with an increasing number of new products positioned in two or more trends over the next five years.
• The premium trend will be driven by super premium and guiltless gourmet amid increasing competition from “me toos” and own label imitators.
• Packaging is expected to play an increasingly important role, especially in nutrient/flavor preservation in spite of the dominance of formulation-led innovation.

• What are the key industry issues affecting the future of food and drinks new product development?
• Which factors are driving the key developments in food and drinks innovation?
• Who are the innovation leaders and what lessons can be learned from them?
• How are food and drink companies improving their return on investment in innovation?
• Which innovation strategies are the most effective?
• What regions are leading innovation in the global food and drinks market?

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