Innovation & Food Product Development: Dr. Ilgın Yıkıcı Spring 2016

Innovation
&
Food Product
Development
Dr. Ilgn Ykc
Spring 2016
HELLO!
ISTANBUL TECHNICAL UNIVERSITY (Food Engineering)
NORTHEASTERN UNIVERSITY (MBA)
WEST VIRGINIA UNIVERSITY (M.S. Food Science)
WEST VIRGINIA UNIVERSITY (Ph.D. Food Science)
COCA COLA COMPANY

NIKE
2
Meet & Greet
My name is
Favorite food/beverage product? Why?
3
Syllabus & Class Schedule
Any questions/concerns?
4
Learning Outcomes
Produce food prototypes or food concepts
Consumer trends & market research
Assess food safety risks & design effective
food safety plans
Select optimal packaging system &
materials
Create marketing strategy
5
Introduction to
Product
Development
6
What is a new product?
A brand new product not present on market

A new method of processing a product
A new variety to an existing product
A new company producing an existing product
An existing product distributed to a new
location or introduced in a new package/form
7
Why develop new food products?
Profit
8
Why develop new food products?
Innovation
Consumer trends
Consumer demands
Nutritional enhancement
Convenience
Sustainability
9
Innovation in the food sector:
between technology-push and
demand-pull
The introduction of new products is widely regarded
as an essential element of competition between food
companies, and the successful management of new
product development a key determinant of business
performance.
It is estimated that the modem supermarket often
carries a product range of 10 000 to 15 000
products and turns over perhaps 10% or more of
these every year. A leading UK food retailer is said
to have introduced around 1500 new private-label
products alone in 1993, compared with 300 in 1987
(Hughes, 1994).
10
From a R&D view:
Innovation is thus regarded as a major source of
competitive advantage for a food company.
Innovation is regarded as closely linked or even
identical with technological change.
Technological change is viewed as the driving force for
wealth creation in modem industrial and service
oriented economies, and research and development
(R&D) is considered to be the key factor in
technological development, meaning that R&D statistics
can be used as indicators of technological levels of
industries or countries.
11
From a marketing view:
Innovation is the detection and fulfilment of
unfilled needs and wants of potential customers,
using the skills, resources, and competences of
the company (Grunert et al., 1996), a process
which is often called the market-orientation of the
company.
The marketing literature has paid much attention
to the non-technological aspects of innovation.
New product management has become a very
important element of marketing operations (Urban
et al., 1987, and others).
12
What needs to be the focus of
innovation?
What do you think?
13
Innovation needs
R&D and marketing coordination is crucial to
achieve innovation success.
R&D is only one among several factors determining
successful innovation holds for the food industry
at least as much as for other industries.
Tastes and habit for food are part of the cultural
heritage and change only slowly, making successful
innovation difficult.
14
Innovation needs
Investment into innovation and product
development is therefore not an easy key to
success in the food industry.
The new products, and the skills, resources and
competences allowing their production, have to
be 'right' for the market to be served. In
addition to R&D skills, market-orientation skills
are therefore an important component of a
food company's innovation activities.
15
A frame work for Innovation
16
Product innovation
According to Kotler (1991) 'an innovation refers to
any good, service, or idea that is perceived by
someone as new. The idea may have a long history,
but it is an innovation to the person who sees it as
new.'
17
Product Innovation
A product may therefore be an innovation to
one person but not to another.
In the context of consumer goods, it makes
sense to distinguish between three groups of
actors, who mayor may not regard a given
product as new: consumers, distributors, and
producers.
Depending on who among these three groups
perceives a product as new, we may then
distinguish several types of innovation.
18
Product Innovation
Newness to consumers will largely depend on
whether consumers believe the product to offer
more value relative to existing products and to
price.
Newness to distributors will depend on their
expectations of how consumers perceive
newness, but may, in addition to that, be
influenced by factors important to retailing, like
storage characteristics, logistics, and
contribution to chain positioning, which may not
contribute to consumers' perception of newness.
19
Product Innovation
Perceived newness to the producer will, among
other things, depend on whether the product
required process innovations in the company, i.e.
the development of skills and resources not
previously available, so that even a product not
perceived as new at all by consumers and
distributors may be regarded as new by the
producer.
20
Process innovation
Generally reduce the cost of producing existing
products or enable the production of new
products.
Defined as an investment into a company's skills,
resources and competences, which allows the
company to introduce cost- saving changes in
production processes but also to introduce new
technology which allows the production of a
range of products quite different from the
existing one.
21
Process innovation
May refer to technological innovations based
on R&D, but may also refer to innovations with
regard to market- orientation skills and
competences.
The introduction of a market intelligence
system, or the reorganization of the product
development process, both of which may
enable the company to become better at
developing product innovations, may therefore
likewise be regarded as process innovations.
22
What is innovativeness?
Who needs to be innovative?
23
Innovativeness
As a characteristic of a particular innovation,
and as a characteristic of a company.
Various classifications of innovations according
to degrees of innovativeness have been
proposed.
One distinction is between radical (or
revolutionary) innovation and incremental (or
evolutionary) innovation.
24
Innovativeness
1. new-to-the-worId products
2. new product lines
3. additions to existing product lines
4. improvements in revisions to existing products
5. repositionings
6. cost reductions
25
Innovation Characteristics
innovation speed
innovation willingness
innovation capacity
innovation quality
26
Innovation Quality
The quality of innovations as a criterion for
innovativeness might be conceived as the
number of successfully marketed new
products, as new product sales as a
percentage of total sales, or as the
contribution of new product sales to cash flow
or profits.
27
Innovation Capacity
A candidate for measuring innovative
capacity might be R&D expenditure as a
percentage of total sales, which, in the
light of the discussion above, should be
complemented by evaluations of the
organization of innovation in the company,
such as the relationship between marketing
and R&D and other aspects of market
orientation.
28
Innovation Willingness
Willingness to innovate is an element of
the corporate culture and can be related
to general management's stimulation o f
innovativeness by fostering flexible
organization and avoiding bureaucracy in
the company, and by stimulating and
adequately remunerating innovative
employees.
29
Innovation Speed
Speed of innovation is related to the
organization of the innovation process in the
company.
30
Innovation success
What makes a new product successful?
31
Innovation success
Market acceptance: to what extent do
customers perceive a product innovation
not only as new, but as superior to
existing products, and to what extent does
this lead to purchase intentions, to trial
purchases and to repeat purchases?
32
Innovation success
The extent to which the innovation has contributed
to a realization of the company's goals.
To the extent that these goals are sales-related, this
will be related to market acceptance, and the same
will, to a lesser extent, be true for financial goals.
However, a company may also have other goals with
innovation - it may, for example, be part of a
process of organizational learning and competence
building, and hence contribute to a company's goals
even when market acceptance is low.
33
INNOVATION?
TREND WATCH 2014
34
INNOVATION RANGE
Just an idea that needs to be developed
A home developed recipe that needs
improvements
A quality issue that needs to be overcome
Finding replacement ingredients
for a recipe using all natural and organic
ingredients
Processing improvements
Shelf Life development
Nutritional Labeling
http://fic.oregonstate.edu/prod_dev
35
Trend Watch
What's now
What's next
What's on its way out
On the menu in 2014. By: THORN, BRET, Nation's Restaurant News, 00280518,
12/2/2013, Vol. 47, Issue 23
2014 food trends
The chicken:
Restaurants are
taking the risk of
removing ever-
popular chicken from
the menu and
offering less
conventional
proteins, such as
catfish, pork belly
and goat.
12/2/2013, Vol. 47, Issue 23
2014 food trends
Cobb salads
Moving away from
Caesar salads,
restaurants are offering
updated Cobbs, with
personal touches such
as fried avocados or
chicken.
12/2/2013, Vol. 47, Issue 23
2014 food trends
Mutant morsels: Unusual

combinations -- such as the
ramen burger that went viral
after being introduced at the
Smorgasburg food market in
Brooklyn, N.Y., or the dessert
pizza with Nutella,
marshmallows and macadamia
nuts at Scala's Bistro in San
Francisco -- are striking chords
with customers.
On the menu in 2014. By: THORN, BRET, Nation's Restaurant News, 00280518, 12/2/2013, Vol. 47, Issue 23
2014 food trends
Ice cream sandwiches: It

is predicted that we'll see
more of these portable
desserts, particularly from
food trucks and popup
restaurants.
2014 food trends
Nontraditional chips:
Instead of tortilla chips,
potato chips or crostini,
it is predicted we'll see
more items such as the
beef tendon chips.
12/2/2013, Vol. 47, Issue 23
2014 food trends
Sea-to-table: "We're sort

of thinking next year is
going to see this whole
sea-to-table movement,
noting that chefs are
experimenting with less
common seafood, such as
octopus and monkfish
liver.
12/2/2013, Vol. 47, Issue 23
2014 beverage trends
Infused ice: Last year, bars

and restaurants were making
distinctive cubes or shaving
their own ice. Now, they're
infusing cubes with herbs
and other ingredients to
enhance flavors.
Wine by the ounce: "People don't like commitment," Freeman

said, noting that they also like to try different things, which
is why more restaurants are offering wine by the ounce, as
well as recommending wine flights.
Artisanal spirits: Local craft beer is well-established, but local

spirits are trending, too. "Local spirits are infusing cocktails
like I have never seen," Freeman said.
Tippler nibblers: Expect more

food-drink combinations such
as potent snow cones and
graham cracker squares in root
beer floats.
Over
Cupcakes
Cocktails
Croissants
Trends
Doughnuts
Beer and beer cocktails
Pretzels
Upcoming
Ice cream sandwiches
Tea and tea cocktails
Biscuits
12/2/2013, Vol. 47, Issue 23
2014 restaurant trends
Tableside service: Traditional tableside

presentations, like the bollito misto cart
at Poggio in Sausalito, Calif, and the
Caesar salad at Carbone in New York,
along with not-so-traditional ones, like
the Margarita cart at Stampede 66 in
Dallas, where the drinks are frozen with
liquid nitrogen, appeal to customers and
are good for the bottom line, according
to Freeman. The wow presentations
mean big bucks
12/2/2013, Vol. 47, Issue 23
Niche ethnic:
Restaurants like Fat Rice
in Chicago, which
specializes in the cuisine
of Macao, and La Urbana
in San Francisco, serving
the food of Mexico City,
are examples of the
specificity with which
some restaurants are
presenting their ethnic
cuisine.
12/2/2013, Vol. 47, Issue 23
Multipurpose
restaurants:
Expect more
places like
Pass and
Provisions in
Houston,
which is a
fine-dining
restaurant on
one side and
a casual
restaurant on
the other.
12/2/2013, Vol. 47, Issue 23
Live art: Restaurants are using digital images, both

still and moving, such as the videos of Flamenco
dancers at Canela in San Francisco, to keep their
art changing.
Year of the brasserie: Not
necessarily French, but
casual, sophisticated and
boisterous restaurants such
as Lafayette in New York and
Cavalier in San Francisco are
on the leading edge of this
trend. Beymen is one of the
trend leaders in Turkey.
12/2/2013, Vol. 47, Issue 23
Gilded Chopsticks: Higher-

end Asian restaurants are in
the offing at places like
Hakkasan in New York, San
Francisco and Miami, and
M.Y. China in San Francisco.
Questions?
Any questions?
55
Next Week
Please brainstorm about product development.
What would you like to design?
Think about your groups. Form groups if you
can!
Food products in the food chain
New product development process & Innovation
constraints
Strategy/ Market Research
Pasta/Noodle Making
56

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Innovation

COCA COLA COMPANY

A brand new product not present on market

Mutant morsels: Unusual

Ice cream sandwiches: It

Sea-to-table: "We're sort

Infused ice: Last year, bars

Wine by the ounce: "People don't like commitment," Freeman

Artisanal spirits: Local craft beer is well-established, but local

Tippler nibblers: Expect more

Tableside service: Traditional tableside

Live art: Restaurants are using digital images, both

Gilded Chopsticks: Higher-

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