Ginger sweet potato chips, melon water, wasabi ranch green pea crisps. Did you ever wonder who comes up with new products like these? Personally, I’d like to know whose fantastic idea it was to combine salt and caramel. Yum! New food innovations are hitting the market rapidly and regularly. In 2016, over 21,000 new food products were introduced (USDA) — that’s about 60 new products per day, and that’s just in the United States!
But most of these new products don’t survive, and the kicker is, this is a widely known and accepted fate in the food industry. Why? Let’s first take a look at the food innovation process.
Food innovation in a nutshell
The food innovation process really depends on the food producer. Large CPG (consumer packaged goods) companies have their own internal processes, but generally they all follow a similar set of steps. The first priority is identifying the market demand and trying to determine what consumers are hungry for. Based on this, in-house food developers and food scientists then come up with new product ideas, which are brought to life in a lab (Kellogg’s published a great interview with three of its food developers about their new-product-development process.) Samples of the “beta” product are created and tested by the developer, over and over again. According to Bloomberg’s Vanessa Wong, “The typical product goes through about 100 iterations by the time it is launched” (3 ways food-related companies get new product ideas). Eventually prototypes are tested by consumers in focus groups and in stores; theoretical online polls are done (posing questions like, e.g., Would you buy this product?); in-home use tests (IHUTs) are performed; and finally a refined version of the product goes back to focus groups for more testing. When the product reaches the final stages of development and the optimal flavor has been identified, Nielsen’s BASES I and BASES II sales forecasting tools are used to ultimately determine the fate of the product.
From inception to production, the entire product development process can take up to two years, with three to four months dedicated to testing. Internal research costs for the testing range from $50,000 to $200,000 — even higher when you take into account overhead costs such as wages. And then there are the tens of millions of dollars spent by big CPGs (in the United States) to market a single new product. This massive investment would not be so shocking were it not for the fact that, according to Nielsen, 85 percent of new consumer packaged goods fail within two years in the marketplace. Companies are essentially wasting much of the tens of billions of dollars spent annually in the United States on marketing, loyalty programs and advertising.
“Internal research costs for the testing range from $50,000 to $200,000.”
With so much testing and investing, how is it possible that new products have such a low success rate?
Why isn’t it working?
Well, we have a theory, and it’s actually fairly simple. According to the International Food Information Council (IFIC) Foundation, year after year, taste continues to be the number one driver of purchase decisions (2017 Food & Health Survey, “A Healthy Perspective: Understanding American Food Values”). Yes, the tests performed by CPGs in the product development phase are indeed capturing whether the test consumers like or don’t like product X, but this data neither converts to other consumers nor provides any insight into why a person likes or dislikes a particular food. They are missing the critical piece: determining the flavors and tastes that consumers actually want. It’s not about liking, it’s about preferences. I like both peaches and nectarines, but I prefer peaches. It’s this level of detail that hasn’t yet made it into the food innovation process.
“Year after year, taste continues to be the number one driver of purchase decisions.”
With this in mind, FlavorWiki set out to change the landscape of food innovation. We developed a tool with an intuitive feedback interface backed up by proprietary algorithms that help everyday consumers define their personal optimal flavor or taste profile for a product — meaning, we can pinpoint the exact flavor note intensities that will result in the best-tasting product from the point of view of the relevant market’s taste perception. And as we know, the best-tasting product is the best-selling product.
How do we do this? By engaging directly with consumers and using our technology to accurately identify their flavor preferences. For example, we’re currently using our technology to test different ice creams. Consumers simply taste one of the selected brands and complete a five-minute online survey. The questions are simple (so no training required) and enable the consumers to compare the flavor notes in the ice cream. Our algorithms convert the answers into a taste profile that is used to determine the optimal taste of the ice cream. So, food producers then learn exactly what their consumers want, and consumers get to influence the food innovation process. Win – win!
Unlike traditional product development results, FlavorWiki data is standardized, which means we can compare results across brands. FlavorWiki essentially expedites the flavor-profiling stages of the process and provides an accurate taste profile for a fraction of the cost of the traditional profiling method. Not only that, turnaround time is a mere two to 10 days, which means products can reach the market faster than ever before. We can do a test as fast as a consumer can eat, and get results in real-time.
Successful food innovation
As it turns out, the idea that spawned the recent salt and caramel trend came from French pastry chef Pierre Hermé who developed a salted caramel macaron (NY Times). Food Nouveau blogger Marie has adapted Hermé’s recipe for these delicious little bites.
In this post, we’ve focused on product development and innovation. Stay tuned for future posts about how we apply FlavorWiki technology for consumer insights, marketing relevance and more!
“Flavorwiki: Can We Use the Internet to Understand User’s Taste Preferences?” by Cristina Leonhardt (Sra. Inovadeira)
“Product: In Home Use Test – IHUT – What’s it all About?”
Winning with Innovation: An Introduction to BASES