Ideas are key to success in new food product development

The food industry is a key contributor to economic activity in Ireland.

It creates sustainable employment, adds value to primary produce and is an integral part of the strategy to increase exports from this country.

However, changes in the global food supply chain occur rapidly. The demands of food retail markets in Ireland and the UK are constantly evolving, there are emerging markets in Asia Pacific, Eastern Europe and the Middle East/Africa, and consumer needs are constantly changing.

In addition, policy governing the production of food products is impacting on the development of the industry, creating exciting opportunities, particularly in the dairy sector, for consumer-driven products for existing firms and new entrepreneurs, linked to the removal of quota restrictions in 2015.

The Food Harvest 2020 report advocates a smart approach and a sustainable approach to developing the Irish food industry to 2020. Irish food firms are asked to “prioritise investment in consumer-focused innovation and new product development”, to become more market and consumer responsive, to prioritise R&D activity and double the investment on R&D as a percentage of turnover, in line with international competitors.

Food firms are being encouraged to foster creativity, innovation and entrepreneurship, and increase value-added output in the food sector by €3bn, with a target for food exports of €12bn by 2020. However, to do this Irish food firms and entrepreneurs need sufficient market knowledge and appropriate products.

The key to achieving these targets is through new product development. Different reports indicate that development failure rates are high in the food sector. In order for the food industry to reach its targets, the success rate of new products will need to be increased dramatically. It is becoming clear that success or failure is often determined in the early stages of the process, where new market knowledge is generated and ideas are identified.

This is because the new idea generation phase strongly influences innovation performance as it controls what concepts enter the development process.

Historically, this early stage of the development process is the least well understood and least well researched part of the process. Food firms and entrepreneurs that fail to grasp this understanding of the processes and practices of development could have their competitive position eroded in the industry.

There is now a research focus on new idea generation techniques for food firms to increase their rate of development success, improve their competitive positions, enter markets with new products and grow their businesses.

A key component of thisresearch is centred on idea generation and knowledge management in the early stages of the development process.

Firms across different industries use a variety of techniques for idea generation and utilise internal and external sources to gather ideas during the early stages of the development process. The process involves information gathering and processing related to: markets, consumer and product trends, buyer behaviour, export market requirements, competitors, advances in new technologies or any other relevant information.

The information gathered is used to identify new ideas and has a major influence on the product concept that goes forward from the early stage of development for further development. The quality of the information and ideas gathered at the early stage of the development process is recognised as being a key determinant of new product success.

Some techniques which are being used across industry, including the food industry, are: chain network collaborations, open innovation, collaborative innovation and co-creation. For example, Google use a concept called “20% time”.

This innovation philosophy allows engineers in the company to explore ideas that are not part of their current assignments or even current expertise. This can result in the creation of many new ideas and a number of resultant projects are expected to reach the status of released products.

Research conducted across the European food processing industry over a three-year period and published in 2010, found that firms that utilise external influences for idea generation and innovation, either from suppliers or customers, consistently achieve higher profits levels and higher growth rates.

For the very competitive consumer food market, a focus on idea generation, and the use of new idea generation techniques, can help direct the development process and ultimately lead to new food products that gain high levels of consumer acceptance in selected markets.

Joe Bogue is a senior lecturer with the Department of Food Business and Development at UCC. Research interests include innovation management and entrepreneurship in the food sector.

Ronan O’Farrell is a food industry consultant and postgraduate student with the Department of Food Business and Development at UCC