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

Published by	Business Insights
Published	December, 2009	Product code	105435
Content info	152 pages
Price	US $ 2875 PDF by E-mail (Single User License) US $ 10781 PDF by E-mail (Global Site License)

Introduction
Related Reports

Future Innovations in Food and Drinks to 2015: NPD, trend convergence and emerging growth opportunities published by Business Insights in December, 2009. This report consists of 152 pages and the price starts from US $ 2875.

Introduction

Abstract

‘Future Innovations in Food and Drinks to 2015’ is a new report published by Business Insights that 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.

Executive summary

Drivers of innovation
New approaches to innovation and product lifecycle management
What' s new in innovation?
Global NPD launch patterns
Case studies
Industry opinion survey results
Conclusions

Chapter 1 - Drivers of innovation

Summary
Introduction

The impact of private label
- Private label is changing the food and drinks marketing landscape
Private label penetration
- Younger shoppers are more receptive to private labels
Private label and innovation
- By increasing their quality private labels are now a credible source of innovation
- Recession has allowed private label to offer an alternative to eating out

Food industry restructuring
M&A activity
- Deal activity has declined, but looks set to increase again in the foreseeable future
“Bought in” innovation is part of the rationale for M&A

Recession and innovation
Innovation rates increased during the recession
- Recession may actually make it easier to launch products
- Some companies are now betting on innovation driving future growth

Consumer drivers of innovation
Two areas are affecting innovation
- Purchasing criteria are having the greatest impact
- Simplification and transparency are important trends

The health issue and claims regulation
Obesity continues to be a growing problem
- Marketing innovation that backs product development is one way to tackle obesity
Regulation of health claims is retarding innovation
- Rising innovation costs are reducing the rate of innovation

Re-positioning products as healthy
Global food supply issues

Chapter 2 - New approaches to innovation and product lifecycle management

Summary
Introduction

Product lifecycle
Management of product lifecycles is changing dramatically
- Time to market in particular is decreasing
- However, measuring time to market is not seen as such an important metric

Types of product innovation
- The industry believes breakthrough innovation is key however
- Resistance to open innovation is harming breakthrough innovation

Examples of innovation
Health breakthroughs
- Packaging can also play a strong role in offering new health benefits
Line extensions
- Line extensions offer lower risk innovation
- Line extensions are not risk free however: is Starbucks risking its brand?
- Other industries are extending into the food and drinks space
- Varying brands by region can be a powerful tactic
Me-toos
- Incremental innovation is the norm in food and drinks

Adopting an open innovation strategy
General Mills G-WIN Worldwide Innovation Network
Other open innovation examples
Consumers' role in open innovation
- Other examples of open innovation
The way ahead for open innovation

Chapter 3 - What' s new in innovation?

Summary
Introduction

Health
Functional Foods
- Kids' specific products
- Targeting kids with functional foods will increasingly attract scrutiny
- Weight management
Digestive health
Beauty-enhancing foods
The future for functional foods
- There are risks as well as opportunities when targeting health

Indulgence
Specialty gourmet foods
- Variety in flavor is also growing
Ethical retailing
- Organic food is still the most important segment
- Simplification of products is also a key area to target

Convenience
- Microwaveable packaging is a key trend
Packaging and innovation
- Offering portion control is important
- On-the-go is still an important trend
- Packaging can help to target more specific consumer groups
- Other areas where packaging innovation can be of benefit

Chapter 4 - Global NPD launch patterns

Summary
Introduction

Innovation levels by product market
- Breakthrough innovations by market
  - Breakthrough innovations are becoming rarer, even when innovation rates are up
  - Soft drinks are the one bright spot of innovation
Breakthrough innovations by region
- Europe is the key regions that is cutting back on true innovation

Innovation levels by type
- Formulation is the main type of breakthrough innovation

NPD by overall product category
Evolution of NPD by region
- Latin America is an increasingly important region
- But the industry still sees Asia-Pacific as the most innovative region

Overall NPD trends
Health
Convenience
Indulgence

Chapter 5 - Case studies

Summary
Introduction

New partnerships and alliances
Foodservice joins forces with mainstream food
Food meets pharmaceuticals and biotechnology

Global players tackling open innovation
General Mills
Kraft

Chapter 6 - Industry opinion survey results

Summary
Introduction

NPD and building competitive advantage
NPD is considered the best mechanism for gaining competitive advantage

Key drivers for future NPD
- Emerging markets are seen as the key driver of future growth
- Views on scientific and technological advances clash with innovation ambitions

Importance of different types of innovation
- Breakthrough innovations are still seen as the most important

Sources of innovation
- The industry appears resistant to external sources of innovation

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

Innovation success metrics
- Despite reducing time to market being seen as important, measuring it isn' t

Trends in innovation
Most innovative food and drinks companies

Chapter 7 - Conclusions

Summary
Introduction

The need for “breakthrough innovation”
- Reliance on internal innovation ideas needs overhauling

Reap the rewards of open innovation
Cross-fertilization and innovation
Emerging market growth and innovation
Consumer pressures on innovation
Future NPD trends
- Health and wellness will continue to be the leading trend
- Indulgent innovation will focus on offering high quality and specialty products
- Convenience benefits and innovative packaging will go hand-inhand in the future
- Ethical products will be very important in the future

List of Figures

Figure 1.1: Private label growth ($m) in Europe, Asia Pacific and the US, 2002- 2012
Figure 1.2: Number of M&A deals (by deal date) in the food and drinks sector, 2007-2009
Figure 2.3: Length of average NPD cycle now and in five years
Figure 2.4: Importance of innovation success metrics
Figure 2.5: Importance of innovation types for food and drink NPD now and in next five years
Figure 2.6: Nutricia Forticare
Figure 2.7: Rising Beverages Activate functional drinks
Figure 2.8: Starbucks Via instant coffee
Figure 2.9: General Mills G-WIN website
Figure 2.10: External contacts made by Cadbury in open innovation program
Figure 2.11: MyStarbucksIdeas website
Figure 2.12: Current and projected share of new products developed using external elements
Figure 2.13: Key sources of product innovation for food and drinks companies in next five years
Figure 3.14: Unilever Amaze kids' specific brain food
Figure 3.15: Candia Silhoutte Active
Figure 3.16: Campina Optimel Control
Figure 3.17: Kraft LiveActive Chewy Granola Bars
Figure 3.18: Danone Essensis
Figure 3.19: Probi Bravo Friscus
Figure 3.20: Goodbon Maple Chunks
Figure 3.21: Moulin du Calanquet fruit juice
Figure 3.22: Kraft Triscuit
Figure 3.23: Bonduelle Vapeur vegetables
Figure 3.24: La Demi-Calorie Galettine Moment
Figure 3.25: Fleur d' Olive Choc-o-lait
Figure 3.26: The reusable milk jug available in Waitrose and Sainsbury' s in the UK
Figure 3.27: ConAgra Foods Healthy Choice trays
Figure 4.28: Share of global breakthrough innovations launched (% all launches within each market), by selected food and drinks markets, 2006-2009
Figure 4.29: Share of breakthrough food and drinks product launches by region, 2006-2009
Figure 4.30: Innovation by type, 2006-2009 (%)
Figure 4.31: New product launches by category (% of overall product launches), 2006-2009
Figure 4.32: New product launches by region (% of overall product launches), 2006-2009
Figure 4.33: Innovation levels of companies in each region in the next five years
Figure 4.34: Importance of selected trends in food and drinks NPD over next five years
Figure 4.35: Importance of health sub-trends in food and drinks NPD in next five years
Figure 4.36: Importance of convenience sub-trends in food and drinks NPD in next five years
Figure 4.37: Importance of indulgence sub-trends in food and drinks NPD in next five years
Figure 5.38: Burger King Krinkz fries
Figure 5.39: BK Fresh Apple Fries
Figure 5.40: General Mills Progresso Light soup
Figure 5.41: Kraft Bagel-fuls
Figure 6.42: Importance of investment areas for competitive advantage in next five years
Figure 6.43: Importance of key NPD drivers over next five years
Figure 6.44: Importance of innovation types for food and drink NPD now and in next five years
Figure 6.45: Relative importance of different sources of product innovation ideas for food and drinks companies over next five years
Figure 6.46: Length of average NPD cycle now and in five years
Figure 6.47: Importance of innovation success metrics
Figure 6.48: Importance of trends for food and drink NPD over next five years

List of Tables

Table 1.1: Total private label penetration in Europe, Asia Pacific and the US, by country, 2002- 2012
Table 4.2: Share of global breakthrough innovations (% of all launches within each market) by selected food and drinks markets, 2006 - 2009
Table 4.3: Number of global breakthrough innovations (actual) by market, 2006-2009
Table 6.4: Respondents' views on the which are the most innovative companies in global food and drinks