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Develop a new food product...

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Brief: Develop a New Food Product

Due Date: 22nd May 2018 Word Count: 2499

1.

Product Concept and Rationale

An innovative food product called “CreATE” has been developed and further explained through this report. It’s an alternative ready-meal concept for those demanding a fresh, healthy and quick meal. CreATE

INNOVATION AND NEW PRODUCT DEVELOPMENT

contains all the ingredients needed for the dish, already portioned and preprepared, allowing the individual to understand exactly what is in their meal whilst simultaneously saving time and money. An example dish is an authentic Pad Thai including measured dry spices, rice noodles, lime juice, raw chicken, sliced vegetables and clear how-to instructions for those less confident in cooking. CreATE aims to target multiple market segments including time strapped professionals and young individuals and those more health conscious. Market segmentation allows identification of the ideal customer (Mcdonald & Dunbar, 2004), for CreATE it was those with a demographic most likely to require a fresh, quick meal. The idea generation stemmed from ready meal industry research and identification of a gap-in-the-market for a product located in-between a processed ready meal and raw separate ingredients. Statistics show an increase in ready meal consumption from 2008-2017 (Statista, 2017) and despite a 1% market value decrease in 2013, following the horsemeat scandal, the demand for ready meals continues to increase (Keynote, 2014). As lives become busier and time is restricted, many families and individuals have fallen into the trap of eating unhealthy fast meals therefore the time-saving element of no preparation will aid its success. In addition, food waste in the UK and globally has been pinpointed as a growing concern with 7million tonnes of food and drink thrown away every

2.

Concept Testing

year (FSA, 2017). By marketing a product with a rationale to reduce surplus food not only minimises the chance of waste and saves the customer money but also contributes to a better food future. During product development the use of primary research is vital, defined by Gorchels (2011). A focus group is used to gather information further defining the product concept. During a 1-hour focus group with 7 people in their early 20s, questions were asked to provide qualitative research on a range of product specific topics. Topics were structured around the four Ps of 1

INNOVATION AND NEW PRODUCT DEVELOPMENT

marketing: product, price, promotion and place (Blythe, 2006) to test the overall concept. The key findings included strengths such as attraction of convenience as well as the portioning aspect allowed time saving which many participants deemed highly important, further reinforced within research (Casserly, 2012 & Bava et al.,2008). In addition, comments were made favouring the educational element of the product, as detailed instructions and a clear ingredients list would be a USP for people who lack knowledge and confidence when cooking new dishes. Furthermore, recommendations suggested one portion size may limit the target market as one student nurse participant stated, “one limitation might potentially be the average portion but may not suit all, so a smaller portion for the elderly would be useful” (Appendix 1). When discussing the price, the group unanimously agreed to set it at £3£4 for the small portion and £4-£5 for the regular portion. Price recommendations are highly valuable as theory suggests charging too high limits demand but charging too low is as dangerous as profits are negatively impacted (Marn et al.,2003). These concerns show suggestions from the potential target market are a key advantage of focus groups (Marlow, 1987). Also, it became apparent that if perceived cost of buying the ingredients separately was cheaper than buying CreATE, this could negatively impact demand, a statement made by one participant: “If it was more expensive than buying ingredients individually, I wouldn’t buy it” (Appendix 1). Place and promotion discussion closely aligned with the initial concept to sell in convenience stores and local mid-range supermarkets and advertise offers to attract new buyers and maintain brand loyalty (Fuller, 2011). One criticism is that participants were not fully representative of CreATE’s target market so unfortunately no statements were taken from varying demographics. In addition, heavy focus on product packaging concerns such as plastic usage provides another USP. One individual highlighted its importance with the following comment “I can imagine lots of plastic 2

INNOVATION AND NEW PRODUCT DEVELOPMENT

especially as you express product transparency. I would hesitate to buy if it wasn’t sustainably packaged” (Appendix 1). This led to the need to research new ways of packaging the product in order to not negatively impact demand. Despite criticisms, focus group findings allowed further product concept clarification as well as recommendations to adapt the product in tune with varying target markets. 3.

Market Research

Research and development prevents entry into a saturated marketplace and as the competitive environment is complex, R&D emphasis has increased (Straus et al.,2009). In addition, Pine and Gilmore (2011) states generally consumers are less satisfied with mediocre food experiences due to vast available options. Market research can be executed in various forms to obtain a broad overview of the market as well as customers’ demands and preferences.

a.

Competitor Analysis

When visiting physical stores the closest product to creATE was at Waitrose. The “Scratch” kit contained raw ingredients and how-to instructions, it was similar to the focus group suggested price, £5.99 serving two people rather than one, despite being sold in a high-end supermarket. The downsides identified as limited meal choices and the large quantity of plastic packaging providing USP potential for creATE. Other competition identified included Wicked Kitchen healthier range sold in Tesco, priced at £4 per portion. Such dishes may clash with those of CreATE yet the microwave heating method reduces the fresh and healthy concept CreATE focuses on. Aldi’s

Ready

marinated

Steady

ingredients,

Cook

meals

limiting

the

contain option

pre-prepared to

remove 3

INNOVATION AND NEW PRODUCT DEVELOPMENT

ingredients yet price might prove difficult for CreATE to compete with, £2.69 for 2 portions. Online meal delivery boxes such as Hello Fresh (2018), Balance Box (2018) and Gousto (2018) identify as potential competitors to monitor closely. Although CreATE aims to sell in mid-range supermarkets similarities are present. The brands have an extensive range of dishes and cater for onefour people. Also, packaging has been carefully considered; sent in cardboard boxes with little use of plastic, dissimilar to the supermarket kits. The aspect which CreATE can use to differentiate themselves is the convenient cooking time. The delivery meal boxes take up to 45 minutes to prepare and cook deterring the short of time demographic. b.

Online Survey

Survey results provided opinions from a wider demographic than the focus group, partially age (Appendix 2 & 3). Results were useful and coherent to the product concept, illustrating 82% of people had a very or somewhat positive reaction to the idea (Appendix 5). Questions related to price reinforced the focus group comments with 58% of people willing to pay £46 (Appendix 8). In addition to price, the compelling reason to purchase proved to be the lack of time and willingness to try new cuisines meaning this must receive focus when marketing (Appendix 10).

c.

Market Statistics

Aforementioned market examination was analysed during initial idea generation meaning further in-depth research allowed a clearer overview of trends, opportunities and threats. By looking more broadly at the readymeal market highlighted 54% of people are influenced by health considerations when choosing a ready-meal (Mintel, 2017) showing that, as the product rationale stated, despite the growth in the ready-meal market, demand for healthier products is evident. Additionally, March 2017 statistics showed that 60% of people felt ready-meals with visible 4

INNOVATION AND NEW PRODUCT DEVELOPMENT

vegetables

are

perceived

healthier,

providing

further

evidence

of

importance for transparent product packaging and reinforcing demand for healthy convenience. Research conducted by Mintel on both fresh and dry meal kits had heavy emphasis on the element of experimenting with new cuisines/dishes. This provoked thoughts for the specific dishes to be offered by CreATE, they must be different to the norm allowing consumers to learn. Statistics showed that 64% of participants felt “Meal kits are a good way of learning how to cook world cuisines” {Mintel, 2018}.

5

INNOVATION AND NEW PRODUCT DEVELOPMENT

4.

HACCP 5.

Packaging & Legal Issues

6

INNOVATION AND NEW PRODUCT DEVELOPMENT

The way CreATE will be packed is closely linked to its focus on sustainability. The ingredients compartment will be made of detachable pots using biodegradable materials, as seen in the illustration. An example of the potential material is made by the manufacturer Vegware (2018), who make plant based disposables from renewable, lower carbon or recycled materials. Additionally, to keep packaging to a minimum a paper sleeve will contain all the necessary legal requirements as well as the brand logo. The sleeve contains all the information and details as stated by law. As seen on the label the exact name of the product is specified. Under the Food Regulations (2014) any names or descriptions applied have to comply with the general provisions of the Food Safety Act 1990. This is in order to not prohibit false or misleading information to the customer clarity in the product specifics. Additionally, as the product contains raw meat a “use by” date, rather than a “best before” date, is printed on the packaging (Food Standards Agency,2018a). To increase the product attraction the customer is given the option of extending the “use by” date through freezing with the easy-to-separate ingredient pots. In relation to the label appearing, all the text is clear and easy to read abiding by regulations that font size must be at least 1.2mm as the packaging is bigger than 80cm (Gov.uk, 2017).

7

INNOVATION AND NEW PRODUCT DEVELOPMENT

a.

Packaging Prototype

8

INNOVATION AND NEW PRODUCT DEVELOPMENT

6.

Justification of Proceeding

Following the development of a new product, firms must spend time analysing its potential success in the market in order not to waste time, money and resources. To be able to succeed in justifying a product the food

production

company

must

consider

the

following

factors

(GlobalFSConsulting,N.D): 

Customer need



Competitive positioning



Fit into existing product range



Potential profits ability



Speed to market



Potential risks

As a result of in-depth research into a variety of areas, it is concluded that CreATE is a potentially viable product that should proceed into production. Initially, the product rationale revealed a gap-in-the-market for a healthy quick meal product, further clarified by increased statistical demand for ready meals over recent years showing that there is a customer need for the idea. This was also reinforced during the market statistics section alongside figures showing how the majority of people believe meal kits are a great way to learn how to cook fitting closely with the product’s USP and target market. Secondly, although the concept testing had a downside of the participants not being representative of our specific target market as most of them can already cook or are not strapped for time, the overall consensus was positive. During the focus group comments made on price closely aligned to that of the initial product concept. This highlighted how the product will be profitable as a Pad Thai contains relatively cheap ingredients when purchased in bulk. Additionally, the price, promotion and place of sale suggestions show that the product will hold a good position in the market in relation to competitors allowing for healthy competition. Another discussion within the focus group was on the USP of CreATE and how its 9

INNOVATION AND NEW PRODUCT DEVELOPMENT

dedication to educational cooking and the sustainable packaging element would aid its success and uniqueness.

The market research revealed that, although there is indirect competition being sold in both supermarkets and online subscriptions, there is nothing identical to CreATE. This shows the idea can adopt a product differentiation strategy in order to gain a competitive advantage which Dumovic and Knowles (2008) state as highly effective. They highlighted how it is particularly difficult to make customers switch from their existing product so as there is no identical product on the market, established through competitor analysis, makes it easier to obtain loyal customers. Furthermore, although the HACCP table doesn’t directly explain the justification behind proceeding with the product idea, it does show how potential risk can be minimised consequently preventing potential product safety issues. Rice noodles are considered a high-risk food due when reheated and the risk of Bacillus Cereus bacteria growing so the detailed control and monitor steps highlights how CreATE could effectively avoid the potential risks when production commences. Finally, packaging research and design enabled clearer understanding of the availability of sustainable materials, such as Vegware, in order to attract environmentally concerned consumers. Additionally, following focus group questions, many participants were attracted to the product personalisation,

which

was

incorporated

by

creating

separate

compartments of the packaging. This allowed the development team to ensure the customers’ demands are met and practicality is optimised. By researching the legal elements of packaging guaranteed the product doesn’t break any laws hence increasing speed to market as packaging doesn’t need redesigning. This conclusively demonstrates why CreATE can be successful if proceeded into production and its achievable success in the market. It also highlights how vital it is to conduct detailed research into all elements of the product in order to decide whether or not a product idea should proceed further. 10

INNOVATION AND NEW PRODUCT DEVELOPMENT

7.

References

Balance Box (2018) Diet food Delivery. Available at: http://www.balancebox.com (Accessed: 15th March 2018). Bava, C., Jaeger, S. & Park, J. (2008) ‘Constraints Upon Food Provisioning Practices in ‘Busy’ Women's Lives: Trade-offs Which Demand Convenience’, Appetite, 50(2-3). Pp. 486 – 498. Blythe, J. (2006) Marketing, California: Sage Publications Ltd. Casserly, M. (2012) If Time is Money, Millennials Are Broke – And They Couldn’t Be Happier. Available at: https://www.forbes.com/sites/meghancasserly/2012/09/05/if-time-ismoney-millennials-are-broke-busy-obsessed/2/#4583c5492daa (Accessed: 27th February 2018). Centre for Food Safety (China) (2008) Trade Guidelines on Safe Production of Rice and Noodles. Available at: http://www.cfs.gov.hk/english/food_leg/files/Safe_Production_of_Rice_and_N oodles_e.pdf (Accessed: 2nd May 2018). Cooking Classy. (2015). Chicken Pad Thai. Available at: https://www.cookingclassy.com/chicken-pad-thai/. (Accessed: 20 May 2018). Dumovic, P. & Knowles, D. (2008) ‘Marketing Masterclass: Product Differentiation for Competitive Advantage’, Journal of Medical Marketing, 8(1), PP. 5 – 8. Food Regulations (2014) The Food Information Regulations 2014. Available at: http://www.legislation.gov.uk/uksi/2014/1855/pdfs/uksi_20141855_en.pdf (Accessed: 20th May 2018). Food Standards Agency (2018a) Best Before and Use-by Dates. Available at: https://www.food.gov.uk/safety-hygiene/best-before-and-use-by-dates (Accessed: 20th May 2018). Food Standards Agency (2018b) General Requirements to be Considered for Each Prerequisite. Available at: general_requirements_to_be_considered_for_each_of_the_prerequisite_v2.d ocx (Accessed: 2nd May 2018). FSA (2017) Food Waste. Available at: https://www.food.gov.uk/newsupdates/campaigns/food-waste (Accessed: 12th February 2018). 11

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Fuller, G. (2011) New Food Product Development: From Concept to Marketplace. 3rd Edn, London: Taylor & Francis. GlobalFSConsulting (N.D) Justifying New or Enhanced Products. Available at: http://www.globalfsconsulting.com/display.php?page=1112 (Accessed: 17th May 2018). Gorchels, L. (2011) The Product Manager's Handbook. 4th Edn, New York: McGraw- Hill Education. Gousto (2018) A Recipe Box. Available at: https://www.gousto.co.uk (Accessed: 15th March 2018). Gov.uk (2017) Food Labelling: Giving Food Information to Consumers. Available at: https://www.gov.uk/guidance/food-labelling-giving-foodinformation-to-consumers#give-a-quantitative-ingredients-declaration-quid (Accessed: 20th May 2018). Hello Fresh (2018) Our Meal Plans. Available at: https://www.hellofresh.com/plans?redirectedFromAccountArea=true (Accessed: 15th March 2018). Keynote (2014) Ready Meals. Available at: https://www.keynote.co.uk/market-update/food/ready-meals (Accessed: 12th February 2018). Marlow, P. (1987) ‘Qualitative Research as a Tool For Product Development’, Food Technology, 41(74), PP. 76 – 78 Marn, M., Roegner, E. & Zawada, C. (2003) Pricing New Products. Available at: https://www.mckinsey.com/business-functions/marketing-and-sales/ourinsights/pricing-new-products (Accessed: 27th February 2018). McDonald, M. & Dunbar, I. (2004) Market Segmentation: How to Do It, How to Profit From It. 3rd Edn, Oxford: Butterworth-Heinemann. Mintel (2017) Attitudes Toward Ready Meals and Ready To Cook Foods. Available at: http://academic.mintel.com/display/841249/ (Accessed: 15th March 2018). Mintel (2018) World Cuisines – UK. Available at: http://academic.mintel.com/display/882713/?highlight (Accessed: 17th March 2018). NHS (2015) Can Reheating Rice Cause Food Poisoning? Available at: https://www.nhs.uk/chq/Pages/can-reheating-rice-cause-foodpoisoning.aspx?CategoryID=51 (Accessed: 15th May 2018). Pine, J. & Gilmore, J. (2011) The Experience Economy. Massachusetts: Harvard Business Review Press. 12

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Safefood 360, Inc. (2014) Determining Control Measures in HACCP. Available at: http://safefood360.com/resources/Determining-ControlMeasures.pdf (Accessed: 2nd May 2018). Shareicon.net. (N.D). Bowl, Bowls, Kitchen Pack, Container, Pans, tool, Pan, Opened, Tools, Tools And Utensils icon. Available at: https://www.shareicon.net/bowl-bowls-kitchen-pack-container-pans-toolpan-opened-tools-tools-and-utensils-675873. (Accessed: 20 May 2018). Statista (2017) Spending on Chilled Ready Meals & Main Meal Accompaniments in the UK, from December 2007 to January 2017. Available at: https://www.statista.com/statistics/281630/market-value-ofchilled-ready-meals-in-the-united-kingdom-uk-since-2007/ (Accessed: 12th February 2018). Straus, T., Saguy, I. & Moskowitz, H. (2009) An Integrated Approach to New Food Product Development....