Trends in Food Business:
From Concept to Marketplace
Food Neophobia
Factors Affecting Product Types of Consumer
Purchases
Neophilic
Culture
Gender • Will accept unfamiliar foods
Age
Neutral
Education
Social
Economics Neophobic
Urbanization • Will reject unfamiliar foods
Why Undertake NPD
• To sustain the demand of the growing consumers, especially
organic foods, functional foods, or foods designed for
nutritional requirements of seniors.
• Rejuvenates products’ life cycles. Replacing and
reinvigorates old products that lost profitability.
Product Development
• A systematic, commercially oriented research to develop
products and processes satisfying a known or suspected
consumer needs.
Product innovation in the food
industry should not merely reflect
technological possibilities but also
consumer needs and preferences.
Characteristics of a New Food Product
Introduced into a New package or
Never been Never been
geographically new size or new New market
manufactured distributed new area form
Classes of New Food Products
Reformulation of
Me-Too Products
Existing Product
New Packaging of
Line Extension
Existing Product
Repositioned Existing
Innovative Products
Product
New Form or Size of
Creative Products
Existing Product
Classes of New Food Products
Reformulation
These are existing
of Products produced by
Me-Too Products different company. This group is
Existing Product
characterized as the largest group of
novel food products.
New Packaging of
Line Extension
Existing Product
Repositioned Existing
Innovative Products
Product
New Form or Size of
Creative Products
Existing Product
Classes of New Food Products
Reformulation of
Me-Too Products
Existing Product
New Packaging
Relatively littleofchange in marketing
Line Extension
Existing Product
strategy.
Example: Same product, different flavor.
Little time or research required for
Repositioned Existing
development.
Innovative Products
Product
No new Purchasing Skills or raw
materials sources.
New Form or Size of Creative
No handling or storage techniques for
Products
Existing Product either the raw ingredients or the final
product.
Classes of New Food Products
Reformulation of
Me-Too Products
Existing Product
New Packaging
Research of
and development time is
Line Extension
Existing Product
minimal.
Manufacturing is comparatively
unaffected.
Repositioned Existing
Innovative
Sold in Urban area > less to no sale.
Products
Product
Sold in Rural area > high sale
New Form or Size of
Creative Products
Existing Product
Classes of New Food Products
Reformulation of
Me-Too Products
Existing Product
New Packaging
Highly variableofimpact on research and
Line Extension
Existing Product
development.
Marketing and sales resources will
require extensive reprogramming.
Repositioned Existing
Innovative
It can be of new packaging, or product
Products
Product
from liquid form became powdered
form, etc.
New Form or Size of
Creative Products
Existing Product
Classes of New Food Products
Moderate research and development Reformulation of
Me-Too Products
required consistent with formulation Existing Product
goal.
Addition/removal/change of ingredient.
Example: New Packaging of
Line Extension
Creamy coffee > now creamier and Existing Product
stronger.
Repositioned Existing
Innovative Products
Product
New Form or Size of
Creative Products
Existing Product
Classes of New Food Products
Repackaging. Reformulation of
Me-Too
Products
Little impact on marketing, sales, and Existing Product
distribution resources.
Example: single sachet coffee to twin
packs. New Packaging of
Line Extension
Existing Product
Repositioned Existing
Innovative Products
Product
New Form or Size of
Creative Products
Existing Product
Classes of New Food Products
Huge amount of research and Reformulation of
Me-Too Products
development dependent on the nature Existing Product
of the innovation.
Possible heavy impact on the marketing
andExtension
sales resources. New Packaging of
Line
Existing Product
Repositioned Existing
Innovative Products
Product
New Form or Size of
Creative Products
Existing Product
Classes of New Food Products
High risk of failure. Reformulation of
Me-Too
CostlyProducts Existing Product
Extensive development time required.
Trial and Error application.
New product that is not yet available in New Packaging of
Line Extension
the market. Existing Product
Repositioned Existing
Innovative Products
Product
New Form or Size of
Creative Products
Existing Product
Quality
Value Addition
Ease of
Functionality
possession
Value
Addition
Time Packaging
Place Form
Benefits of Value Addition
• Value addition in foods helps increase revenue, as by adding
extra value to a food product, its financial value increases.
Puto With
Puto with
Cheese and Puto
Cheese
caramel filling Price: ₱ ₱ Price: ₱
Price: ₱ ₱ ₱
Sources of New Product Ideas
Marketplace
Within the Company
Environment outside
the marketplace
The Market Place
• Market research is done to identify customer and consumer
needs; which could also include results of customer
profiling.
• Retail data of buying habits of consumers.
General Classifications of Marketplaces
Convenience
Artisan Based Grocery Store
Store
Industrial Electronic /
Food Service
Arena Internet
Within the company
• Sales force’s interaction with retail buyers, with individual
customers in stores and from observations of competitive
products and their placement within the stores.
• Spontaneously generated ideas from employees.
• Government pressure or incentives to innovate.
Other Environment as sources of ideas
• The Competitions
• Food Conferences, exhibits, trade shows, and symposia
• Specialized Libraries (Universities, etc.)
• Trade Literature ( Includes cultural food development)
• Government Publications ( DOST, DA, FNRI, Private
publications, USDA, DOH, EFSA, etc.)
Criteria for Screening Ideas
Technical Manufacturing Financial
Marketability
Feasibility Capability Capability
• Is it • Can we • How much • Can we
Marketable? produce? can we sustain the
• In which • Do we have produce? production?
region should the • Can we meet • Can we
we sell it? materials? client sustain the
demands? finances of
innovations?
The (New) Product Development Team
Financial Analytical
Managing Skills Engineering Skills Production Dept.
Skills
Marketing Research
Legal Adviser R&D Facilities Purchasing Dept
Capability
Traffic Department
QC Dept
Skills
Product Development
Process
Phase 1. Product Strategy & Definition
Phase 2. Product Implementation and Marketing
* Strategic Plan
* Market opportunity Phase 3. Scale-up and trial Production
Assessment * Product mock-ups
* Prototype Phase 4. Product Launch and
* The Business plan * Scale-up and trial Evaluation
Development
*Product definition * Filing of Legal
* Benchmarking /
Market Standard requirements * Product Support
Reference Product * Shelf Life Analysis. * Assessments
*Product Optimization * Increase Bulk size from * Sales Figures and
* Market Strategy & Lab Scale o Maximum reports
Testing Commercial Scale the * Feedback collection
company can handle
* Prototype Modification
* Reformulation, if
* Sensory Evaluations needed
Product Conceptualization
Product Concept Positioning Concept
Product Concept (text + Graphics) Positioning Concept (text + Graphics)
*All natural *A great breakfast
ingredients *For kids and adults
*Rich Fruit Pieces alike
*Toy in the Box *Good for afternoon
snacks too
Product Conceptualization
Product Concept Positioning Concept
* Introducing health yogurt • Yogurt designed for good nutrition
* All the nutritional features of • Its active cultures to improve
regular yogurt digestion
* With active cultures • Specially Formulated to be low fat
* Low-fat • The array of flavors, plain, fruit and
* Available in plain, fruit, and tropical tropical specially selected for your
flavors sensory delight.
Product Product
Product Name
Specifications Proposal
Product
Product Idea
design
Description
Specifications
Product Idea Product
Concept Concept
Marketing’s Perspective
FUNCTIONS
Promote New
Monitor
Identify Needs of the Products thru
Product in the
consumer promotions &
market.
Advertisements
Kill Unsuccessful Projects Early
Quality Should be “High Enough”
Anticipate Competition
Not all Ideas will Succeed!!!
SUCCESS
Meet
Defining & Proper Positioned
corporate
Meeting Target The Right packaging properly at
logistics &
consumer Needs Food & the shelf and
financial
& Expectations preparation in the media
necessities
Success
Defining & meeting target consumer needs & expectations.
People. Knowledge. Systems.
