Innovation is a key factor in the food and beverage sector. Developing a product portfolio by surfing on new consumers’ trends can enable companies to achieve improved margins and healthy growth. Quick and accurate introduction of innovative products is a competitive advantage for companies able to properly manage new product development and launch.
New trends are:
Health concern with seeds/grains products
Sales of ancient grains and seeds products are booming. According to IRI Worldwide, about 45% of consumers seek snacks with health benefits. Quinoa, millet, buckwheat, barley and polenta are now part of healthy snack composition. Many companies are adapting their products to better fit new consumers’ trends and extend product portfolios with high margin products.
Nature concern with the Greek yogurt trend
The US has gone Greek. Greek innovation has spread in scores of product ranges: from cereals, to standard yogurts, cakes and ice cream. The Greek trend is about indulgence through natural products. More and more companies are trying to enter the snack market with Greek products.
Nostalgic concern with innovative classics
Candy makers are keying in on childhood classics. Innovation is not only on complete new products. Changes also occur on packaging, serving size or flavors. For instance, Tic Tac has added a flavor of breath mints inspired by summer popsicles, and Hammond’s Candies starts a new line of cotton candy.
Spicy concern with taste evolution
Chilly, red hot, jalapeno, tabasco and lime are new spicy flavors used in the food industry, even in the confectionary segment. Taste has evolved and the new generation likes acid and spicy savors.
Indulgence concern with dessert decadence
“Indulge yourself” is a famous motto for companies right now. Cakes, ice creams, creamy yogurts, snacks, confectionary, each segment has its comfort products. Red velvet, caramel or crème brulée topping are some examples of this new trend.
Bites and minis with serving size changes
Easier to take away, bites and minis are booming products. The guilt-free impression small serving portion gives to consumer is appreciated and assortment pack is better accepted, especially for seasonal flavor. For instance Peeps Minis are mini marshmallow treats in three flavors for summer: chocolate, strawberry and sour watermelon.
As managers recognize strategic goals largely depend on product innovation, many companies are struggling to effectively manage new product development and launches. Some companies show a 70% – 80% failure rate in new product launches
This rate is explained by some challenges considered difficult to handle:
- Constant changes in consumer demand
- Volatile economic conditions
- Very competitive environment
- Price pressure due to harsh competition and private labels
- Changes in costs of raw materials
- Frequent regulatory change
For many companies, more than 50% of turnover comes from products launched over the last 5 years. Companies recognize the importance of technology to transform their business and help them to better manage new product development and launches. Having an overview of different aspects (schedules, resources, budgets etc.) in a food management project is essential to manage the risks associated with new product development.
Lascom provides PLM solutions to better fit food industries needs.