Reportlinker Adds Future Innovations in Food and Drinks to 2015: NPD, Trend Convergence and Emerging Growth Opportunities

Jan 19, 2010, 07:41 ET from Reportlinker

NEW YORK, Jan. 19 /PRNewswire/ -- announces that a new market research report is available in its catalogue:

Future Innovations in Food and Drinks to 2015: NPD, trend convergence and emerging growth opportunities

This report outlines the main market drivers influencing innovation in the global food and drink sectors and also analyses the latest trends in product innovation and looks at what has been changing in the product life-cycle. Meanwhile, using results from a survey conducted by Business Insights, this report analyses global new product development and asks the crucial question, 'What is new in innovation?'

Finally, the effect of the economic downturn on product innovation is discussed as well as the most important drivers influencing consumer demand and what this means for future product launches.

Finally, the thorny issue of regulation and repositioning products on a healthy basis is analysed followed by a look at the problems surrounding global food supply.

Key features of this report

  • Analysis of how the product lifecycle model is changing
  • The report looks at the three major trends impacting on new product development in the global food and drinks sector - health, indulgence and convenience
  • The analyzes the evolution of product launches in the global food and drinks market
  • Case studies are included illustrating how the innovation environment within the global food and drinks industry is changing fast

Scope of this report

  • Understand the key innovations in the food & drink industry and what the major trends will be over the next five years
  • Understand crucial areas such as the growing trend for functional foods which is encouraging food companies and pharmaceutical firms to co-operate.
  • Evaluate whether you should be looking to refresh your product portfolio in order to take advantage of emerging trends

Key Market Issues

  • Over the last decade there has been a massive shift by many of the largest food and foodservice operators to reformulate and re-position products as the health debate has gained ground
  • A disconnection exists between the acknowledgement of the need for "breakthrough innovation" and the recognition of the importance of external sources (be it suppliers, retailers or competitors) to be able to achieve that goal
  • In many emerging markets multinational operators are facing increasing competition from local players that have started to develop their own premium and even super-premium brands with high quality products, packaging and promotions.

Key findings from this report

  • A high level of innovative activity in the soft drinks sector can be attributed to an explosion in new combinations, flavour and tastes driven by indulgence and premiumization trends as well as a shift to new functional, nutraceutical and natural soft drinks lines
  • The economic downturn has thrown up some new opportunities for traditional food categories. The shelf stable (canned and packaged) sector, long seen as the dowdy neighbor to more exciting categories such as frozen, chilled and fresh, has witnessed somewhat of a revitalization as consumers downgraded their spending patterns
  • Consumers increasingly believe that own label brands are on a par with their branded counterparts.

Key questions answered

1. What are the major trends in innovation in the food & drinks market?

2. Which regions are seeing the most product innovation?

3. What are the best strategies to maximize the efficiency of the product development process?

4. What are the most innovative companies in the food & drink sector?

5. What does the industry consider to be the most important driver for new product development ?

Table of Contents

Future Innovations in Food and Drinks to 2015

Executive summary 12

Drivers of innovation 12

New approaches to innovation and product lifecycle management 13

What's new in innovation? 14

Global NPD launch patterns 15

Case studies 16

Industry opinion survey results 17

Conclusions 18

Chapter 1 Drivers of innovation 20

Summary 20

Introduction 21

The impact of private label 21

Private label is changing the food and drinks marketing landscape 21

Private label penetration 23

Younger shoppers are more receptive to private labels 24

Private label and innovation 25

By increasing their quality private labels are now a credible source of innovation 25

Recession has allowed private label to offer an alternative to eating out 25

Food industry restructuring 26

M&A activity 26

Deal activity has declined, but looks set to increase again in the foreseeable future 26

"Bought in" innovation is part of the rationale for M&A 27

Recession and innovation 29

Innovation rates increased during the recession 29

Recession may actually make it easier to launch products 30

Some companies are now betting on innovation driving future growth 31

Consumer drivers of innovation 32

Two areas are affecting innovation 32

Purchasing criteria are having the greatest impact 32

Simplification and transparency are important trends 33

The health issue and claims regulation 34

Obesity continues to be a growing problem 34

Marketing innovation that backs product development is one way to tackle obesity 36

Regulation of health claims is retarding innovation 37

Rising innovation costs are reducing the rate of innovation 37

Re-positioning products as healthy 38

Global food supply issues 40

Chapter 2 New approaches to innovation and product lifecycle management 44

Summary 44

Introduction 45

Product lifecycle 45

Management of product lifecycles is changing dramatically 45

Time to market in particular is decreasing 45

However, measuring time to market is not seen as such an important metric 46

Types of product innovation 49

The industry believes breakthrough innovation is key however 49

Resistance to open innovation is harming breakthrough innovation 50

Examples of innovation 51

Health breakthroughs 51

Packaging can also play a strong role in offering new health benefits 52

Line extensions 52

Line extensions offer lower risk innovation 52

Line extensions are not risk free however: is Starbucks risking its brand? 53

Other industries are extending into the food and drinks space 55

Varying brands by region can be a powerful tactic 55

Me-toos 56

Incremental innovation is the norm in food and drinks 56

Adopting an open innovation strategy 56

General Mills G-WIN Worldwide Innovation Network 58

Other open innovation examples 60

Consumers' role in open innovation 62

Other examples of open innovation 63

The way ahead for open innovation 65

Chapter 3 What's new in innovation? 70

Summary 70

Introduction 71

Health 71

Functional Foods 72

Kids' specific products 74

Targeting kids with functional foods will increasingly attract scrutiny 75

Weight management 76

Digestive health 80

Beauty-enhancing foods 82

The future for functional foods 84

There are risks as well as opportunities when targeting health 85

Indulgence 87

Specialty gourmet foods 87

Variety in flavor is also growing 88

Ethical retailing 89

Organic food is still the most important segment 89

Simplification of products is also a key area to target 90

Convenience 92

Microwaveable packaging is a key trend 92

Packaging and innovation 94

Offering portion control is important 95

On-the-go is still an important trend 95

Packaging can help to target more specific consumer groups 96

Other areas where packaging innovation can be of benefit 96

Chapter 4 Global NPD launch patterns 100

Summary 100

Introduction 101

Innovation levels by product market 101

Breakthrough innovations by market 101

Breakthrough innovations are becoming rarer, even when innovation rates are up 101

Soft drinks are the one bright spot of innovation 103

Breakthrough innovations by region 104

Europe is the key regions that is cutting back on true innovation 104

Innovation levels by type 105

Formulation is the main type of breakthrough innovation 105

NPD by overall product category 107

Evolution of NPD by region 109

Latin America is an increasingly important region 109

But the industry still sees Asia-Pacific as the most innovative region 110

Overall NPD trends 111

Health 112

Convenience 113

Indulgence 114

Chapter 5 Case studies 118

Summary 118

Introduction 119

New partnerships and alliances 119

Foodservice joins forces with mainstream food 119

Food meets pharmaceuticals and biotechnology 121

Global players tackling open innovation 123

General Mills 123

Kraft 125

Chapter 6 Industry opinion survey results 130

Summary 130

Introduction 131

NPD and building competitive advantage 131

NPD is considered the best mechanism for gaining competitive advantage 131

Key drivers for future NPD 132

Emerging markets are seen as the key driver of future growth 132

Views on scientific and technological advances clash with innovation ambitions 133

Importance of different types of innovation 134

Breakthrough innovations are still seen as the most important 134

Sources of innovation 136

The industry appears resistant to external sources of innovation 136

The NPD cycle 137

The time-to-market for new ideas appears set to fall significantly 137

Innovation success metrics 139

Despite reducing time to market being seen as important, measuring it isn't 139

Trends in innovation 140

Most innovative food and drinks companies 141

Chapter 7 Conclusions 144

Summary 144

Introduction 145

The need for "breakthrough innovation" 145

Reliance on internal innovation ideas needs overhauling 145

Reap the rewards of open innovation 146

Cross-fertilization and innovation 147

Emerging market growth and innovation 148

Consumer pressures on innovation 148

Future NPD trends 149

Health and wellness will continue to be the leading trend 149

Indulgent innovation will focus on offering high quality and specialty products 150

Convenience benefits and innovative packaging will go hand-inhand in the future 151

Ethical products will be very important in the future 151

List of Figures

Figure 1.1: Private label growth ($m) in Europe, Asia Pacific and the US, 2002–2012 22

Figure 1.2: Number of M&A deals (by deal date) in the food and drinks sector, 2007-2009 26

Figure 2.3: Length of average NPD cycle now and in five years 46

Figure 2.4: Importance of innovation success metrics 47

Figure 2.5: Importance of innovation types for food and drink NPD now and in next five years 50

Figure 2.6: Nutricia Forticare 51

Figure 2.7: Rising Beverages Activate functional drinks 52

Figure 2.8: Starbucks Via instant coffee 54

Figure 2.9: General Mills G-WIN website 60

Figure 2.10: External contacts made by Cadbury in open innovation program 61

Figure 2.11: MyStarbucksIdeas website 64

Figure 2.12: Current and projected share of new products developed using external elements 66

Figure 2.13: Key sources of product innovation for food and drinks companies in next five years 67

Figure 3.14: Unilever Amaze kids' specific brain food 76

Figure 3.15: Candia Silhoutte Active 79

Figure 3.16: Campina Optimel Control 80

Figure 3.17: Kraft LiveActive Chewy Granola Bars 81

Figure 3.18: Danone Essensis 82

Figure 3.19: Probi Bravo Friscus 84

Figure 3.20: Goodbon Maple Chunks 88

Figure 3.21: Moulin du Calanquet fruit juice 88

Figure 3.22: Kraft Triscuit 91

Figure 3.23: Bonduelle Vapeur vegetables 93

Figure 3.24: La Demi-Calorie Galettine Moment 94

Figure 3.25: Fleur d'Olive Choc-o-lait 94

Figure 3.26: The reusable milk jug available in Waitrose and Sainsbury's in the UK 97

Figure 3.27: ConAgra Foods Healthy Choice trays 98

Figure 4.28: Share of global breakthrough innovations launched (% all launches within each market), by selected food and drinks markets, 2006-2009 102

Figure 4.29: Share of breakthrough food and drinks product launches by region, 2006-2009 105

Figure 4.30: Innovation by type, 2006-2009 (%) 106

Figure 4.31: New product launches by category (% of overall product launches), 2006-2009 108

Figure 4.32: New product launches by region (% of overall product launches), 2006-2009 109

Figure 4.33: Innovation levels of companies in each region in the next five years 111

Figure 4.34: Importance of selected trends in food and drinks NPD over next five years 112

Figure 4.35: Importance of health sub-trends in food and drinks NPD in next five years 113

Figure 4.36: Importance of convenience sub-trends in food and drinks NPD in next five years 114

Figure 4.37: Importance of indulgence sub-trends in food and drinks NPD in next five years 115

Figure 5.38: Burger King Krinkz fries 120

Figure 5.39: BK Fresh Apple Fries 121

Figure 5.40: General Mills Progresso Light soup 124

Figure 5.41: Kraft Bagel-fuls 127

Figure 6.42: Importance of investment areas for competitive advantage in next five years 132

Figure 6.43: Importance of key NPD drivers over next five years 134

Figure 6.44: Importance of innovation types for food and drink NPD now and in next five years 135

Figure 6.45: Relative importance of different sources of product innovation ideas for food and drinks companies over next five years 137

Figure 6.46: Length of average NPD cycle now and in five years 138

Figure 6.47: Importance of innovation success metrics 140

Figure 6.48: Importance of trends for food and drink NPD over next five years 141

List of Tables

Table 1.1: Total private label penetration in Europe, Asia Pacific and the US, by country, 2002– 2012 24

Table 4.2: Share of global breakthrough innovations (% of all launches within each market) by selected food and drinks markets, 2006 – 2009 102

Table 4.3: Number of global breakthrough innovations (actual) by market, 2006-2009 103

Table 6.4: Respondents' views on the which are the most innovative companies in global food and drinks 142

To order this report:

Food Industry: Future Innovations in Food and Drinks to 2015: NPD, trend convergence and emerging growth opportunities

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Nicolas Bombourg



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