The challenges for product developers are increasing in a world where consumers are increasingly in control and retailers are becoming more demanding: they are being asked not only to develop faster, but also to respond to various trends, such as sustainability, health, local-for-local and traceability in the chain.
How do you realize acceleration in an increasingly complex world? Product development is increasingly part of the integrated chain of consumer, marketing, development, production and logistics. The great challenge becomes to develop products that not only meet external needs and requirements, but also contribute to the company’s (financial) objectives. We still too often see unsuccessful product introductions that are insufficiently innovative, insufficiently aligned with the company’s strategy or simply do not create sufficient margin, leading to remediation. We have listed key tips for product developers to avoid this and find the right balance.
- Differentiate the R&D organization
Product development comes in all shapes and sizes: from disruptive innovations to tenders or smaller modifications in packaging or ingredients. Practice shows that smaller adjustments to recipes in particular are often made, driven by the customer or their own commercial department. Because the focus is often on these relatively minor and urgent adjustments, sometimes little attention is paid to the innovations that are especially relevant for the future. Companies that split their teams in the marketing and development departments keep the right focus on both the short and long term. Specifically, that means creating two teams, each with its own short- and long-term focus and priorities. - Increase external orientation
Developments among commodity suppliers, startups and technology providers are moving at lightning speed. Most producers are primarily focused on the day-to-day pressures of minor adjustments (listed under 1) and miss a lot of external developments and inspiration. This eventually leads to a negative spiral, where product development becomes reactive and focuses primarily on customer demands and cost price reduction. Free up resources to “play outside,” find inspiration and translate it into concepts. Inspiration for real innovations usually comes from other markets and industries, not navel-gazing. - What do you produce yourself and what do you outsource?
The connection between product development and in-house competencies is traditionally strong among many food producers, especially if they are private-label producers. The question of whether to produce a new product ourselves or better to outsource is often not asked. This can lead to the discontinuation of an interesting concept or, on the contrary, the persistence of a development at all costs, which frequently leads to frustrations and failures. Searching for production partners is often not considered in this regard, because of staffing at the in-house plant or the hassle of lining up external partners. However, it can be inspiring and instructive precisely in these disruptive times to discover what is possible outside the walls. - Consider complexity in operations when innovating
The complexity within the operation is actually increasing rapidly at many food companies due to more stock keeping units (SKUs), shorter production runs and an increase in raw materials and labels. It is not necessarily the small items that lead to complexity and efficiency loss in processing and supply chain. The challenge is to determine the features that do. From chosen “platforms,” based on allergens, packaging forms, additional cleaning or processing steps, for example, product development can be tailored to new concepts at an early stage. This maximizes the chance that these will actually lead to an integral, positive margin when scaling up in production. - Work disciplined and from a clear framework
Top athletes know that passion and talent are not enough for success. Above all, discipline and dedication determine long-term success. This also applies to product development. We see in practice that many marketing and innovation teams have enough passion, but lack clarity of the process to be followed, the expectation of the different roles, and the rhythm and discipline to keep the pace in the process. How often does it happen that in a weekly meeting it is reported that the one important action was not accomplished? And again we lost a week. Make the progress of key innovations visible from a process consisting of clear steps and decision moments. The discussion of this process should be part of the board meeting and is therefore visible and important. Pull innovation out of the shadows, create accountability and stop tolerating the excuses for why it failed (again). - Leverage customer panels and rapid in-store testing
Sometimes it seems that being able to offer an innovation at all is more important than consumer acceptance of the innovation. Marketers, category managers and developers sometimes think and act so much from their own, substantive or professional perspective that the voice of the customer is hardly included. Distinguishing between hype and trend is more important than ever. Good tools are customer panels and being able to quickly pilot innovations in a small number of stores. And what manufacturer would dare to let its own developers spend a few days with a pilot on the store floor, so that they themselves can speak to consumers about their innovations?
