Global food companies face big NPD challenges in appealing to widely varied local tastes, but as the world becomes increasingly interconnected, manufacturers are learning lessons from product launches half a world away.
Last week, The Kellogg Company launched a wave of new products in the United States, including some inspired by foreign preferences – and it is a trend on the rise among many major manufacturers. Kellogg’s senior vice president research, quality and technology Margaret Bath explained why its NPD process (NPD) is reaching across borders.
“One of our key strategies for growth in the US and overseas has been to leverage popular brands from one region to another,” Bath said. “We have done that successfully with the US launch last year of Crunchy Nut cereal, which has been a leading brand in the UK. This year, we introduced Krave cereal to the US, also from the popular Tresor brand in France.”
Among its latest batch of new products for the US market, the company has introduced Frosted Flakes Chocolate, including bilingual branding as Choco Zucaritas in Spanish.
Zucaritas is already the number one cereal brand in Mexico, Bath said, so the company sees potential to expand the brand within the burgeoning US Hispanic market.
“We’ll continue to evaluate opportunity to leverage brands from one region to another,” she said.
A ‘glocal’ approach
This is a strategy seen at Kraft Foods too, with the introduction of belVita breakfast biscuits – already popular in Europe – in the United States earlier this year, for example.
A Kraft Foods spokesperson told FoodNavigator-USA: “Scientists, chemists and engineers are better directed by consumer insights than ever before. And they’re attuned to the company’s “glocal” approach to new product development by quickly adapting global technology platforms to local markets.”
For example, the company’s Swiss R&D (research and development) team collaborates closely with the New Jersey-based Kraft Foods Global Gum & Candy Center of Excellence, “to drive innovation and new technologies and global category growth platforms,” he said.
Kraft Foods is among the growing number of food manufacturers expanding its network of locally based R&D centers around the world, with about 3,300 food scientists, chemists and engineers at 15 major R&D centers in Asia, Europe, North America and South America. It invested more than $700m in R&D in 2011, up from $466m in 2009.
And innovation is helping boost top-line growth, the spokesperson said, with new products generating 10.5 percent of the company’s net revenue in 2011, up from just 7.4 percent in 2009.
Gaining market insights
For Kellogg, Bath said: “Our innovation process is multi-staged. What that means is, while we encourage creativity and breakthrough thinking, we also do our due diligence in conducting feasibility studies, market research and consumer testing to ensure what we ultimately bring to market fills a consumer need, is marketable and meets consumer, brand and financial hurdles.”
And if a product doesn’t make it to market, or is ‘retired’ from the product portfolio?
“We go on to pursuing the next big idea,” she said. “But we are careful to preserve any insights into consumers, markets or processes that may still have relevance.”