FOOD PRODUCT DEVELOPMENT
Mary Earle, Richard Earle and Allan Anderson
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About the book
About the authors
PREFACE
CONTENTS
Introduction
1. Keys to new product
success and failure

2. Developing an
innovation strategy

3. The product
development process

4. The knowledge base
for product
development

5. The consumer in
product development

6. Managing the
product development
process

7. Case studies:
product development
in the food
system

8. Improving the
product development
process

INDEX
Useful links
Feedback (email link)

Part 2, Chapter 2
Developing an innovation strategy


2.3.1 The company's place in the food system


The two main food channels are the fresh product channel and the processed product channel.

The fresh products channel has increased a great deal in importance in the last few years and it is predicted to grow further because of improved distribution technology and consumers' evident wish for fresh products.

The processed products have been the mainstay of the food industry because of their enhanced storage life and the amount of variation that can be achieved in the products.

The next decision is to decide on the stage of the food system: production, ingredient processing, manufacturing, distribution or retail. There is increased innovation in the production sector with many new types and varieties of fruits and vegetables; farming of an increasing variety of fish; organic farming; new types of animals. This is as well as genetic engineering, which up to now has concentrated on farming methods, such as resistance to herbicides and higher yields, rather than potential for product innovation. Innovations from the ingredient processors have increased markedly and this is an increasingly powerful part of the food industry. Food manufacturing has mainly concentrated on incremental changes, with some new innovations such as UHT processing and extrusion. The retail sector is a continuous area for innovation, both inside the supermarkets with own label products, organic products and boutique stalls, and outside with the increase in food stores associated with petrol stations and the rising growth of takeaways and restaurants.

Some possible innovation strategies for the various stages in the food industry are shown in Box 2.2 (Earle 1997).


Box 2.2 Some possible innovation strategies for the various stages in the food system

Food service - Fast foods is an area which will develop further in the global scene, with international foods from fusion of meals and snacks from different countries.

In some countries, particularly the USA, the fast food companies could develop more fresh take-home meals or part meals.

Retailers - New developments will start in the USA to cope with the changing consumer needs. There could be innovation in types of stores, the present supermarkets' domination changing into different types of stores - fresh food markets, convenience stores, take-home meals outlets. Increasing use of the Internet in retailing.

Manufacturers - In seeking 'total food technology', the manufacturer could seek innovations in the retail sector, developing new retail outlets which they could own or be in joint ventures with other manufacturers or retailers. Two possible innovations are:

· marketing a specialised group of nutritionally designed products through nutrition boutiques;

· cooperation with fast food outlets to develop a new combined manufacturing and retail system to provide fresh meals or part meals for taking home.

Ingredients' processors - This is an innovative sector at the present time and one can only see them increasing their industrial marketing to have cooperative programmes with their customers, both food manufacturers and food service, and increasingly involving farmers and fishers.

Farmers and fishers - They could increasingly manage a 'fresh' chain from the farm and sea to the 'fresh' supermarket and to the food service outlet. There could be closer relationships with the food processors in developing new food ingredients by animal, plant and fish breeding. Ownership could ensure that new varieties and more sustainable production methods are linked directly to the needs of the consumer.

Source: After Earle, 1997.


Vertical integration has been an important innovation strategy in the past, for example in the chicken industry, and in large multinationals which have combined ingredients processing with food manufacturing. Recently in some companies there has been a breaking of the integration with selling off the ingredients processing section by large food companies and of contracting farmers instead of owning farms in the production, processing and marketing integration. Retailers increasingly have a high degree of integration, although not always ownership, with production, processing and manufacturing, and are more strongly involved in innovation in the food system. Food manufacturers are increasingly directed in innovation by the food ingredients' processors and the retailers.

It is interesting to speculate how the food manufacturers will develop innovation strategies in the future; it would appear that today's strong influence on their innovations of retailers and ingredients suppliers may make them redundant in innovation or spur them into new directions.



2.3.2 The company's means of achieving the innovation aims


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Food Product Development. Copyright © 2001 Woodhead Publishing Limited.
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