1. CHRM 2390 Research and Development of Food Products

2. Why go into new food product development? • For profitable and to survive.

3. Forces Driving New Food Product Development • Life cycles • Long range goals • Marketplace • New technology and knowledge • Changes in government legislation, policies, and programs

4. The Product Life Cycles • Introduction period • Growth period • Decline in sales • No-growth period • Decline in volume

5. Corporate Reasons for New Product Development • To achieve growth and be profitable • Growth by • Expansion to new markets or market segments-Expensive and hazardous • Market penetration -selling more in existing market-Expensive • New products for current market-continuous growth and profitability • Diversification-new product for new markets

6. Marketplace Reasons for New Product Development • New food purveying method • Changing habits of consumer • Competition

7. Technological Reasons for New Product Development • Information technology-accessible • Packaging technology • Increased knowledge of: • Food science • preservative and processing • new ingredients • Health and nutrition

8. Governmental Influences on New Product Development • Purpose: • to ensure safe and contaminant-free food • to develop standards for food composition and labeling • to maintain fair-trade and competition • to protect employees and the environment • Affect: • technical development of new food products • marketing personnel

9. Governmental Influences on New Product Development... • Other regulatory aspects: • International Regulatory Agencies: • Examples: WTO, EEC, ISO • Quasi-governmental agencies: • Marketing boards: supply, import, price • Professional and trade associations • Wages and rules of conduct

10. New Product Development • Could be defined as: • the development and introduction of a product not previously manufactured by a company into the marketplace, or • the presentation of an old product into a new market not previously explored by a company

11. New Product Classifications • Line Extension • Established products in a new niche • New form of existing products • Reformulation of existing products • New packaging on an old product • Innovative or added-value products • Never-before-seen products

12. Line Extensions • A new variant of an established line of food products • Examples: • A new flavor • A new varieties • A new texture

13. Advantages of Line Extensions • Little time or effort for development, manufacturing, production systems and storage • Few change in marketing strategy • No new purchasing skills (commodity trading) or raw material sources • No new storage or handling techniques for either the raw ingredients or the final product.

14. Problems with Line Extensions • developmental problems if extension requires processing changes • manufacturing and other support systems change if extension is complex • marketing techniques

15. Repositioning a Product • Discovery of a new use for an existing product • Baking soda, oatmeal • Manufacturing unaffected • Minimal development time • New marketing strategy needed

16. New Forms of Existing Product • Often the downfall of new product ventures • New product must have a perceived advantage over old • Extensive development time • Major equipment purchases • Different warehousing and distribution systems

17. Reformulation of existing product..”new, improved” • High probability of technical success • Relatively inexpensive and short development time • The result of: • Unavailable ingredients • Lower costs • Meet the challenge of competitors • Consumer driven

18. New Packaging of Existing Products • Packaging of bulk products into unit packages • Utilize new technologies such as MAP, CAP • Branding • May require an overhaul of packaging operation

19. Innovative Products • Making changes to an existing product • Some paths may be easy but some are more risk and costly • The more innovation in a product, the longer the development time and the higher the research and development costs

20. Creative Products • Rare, never-before-seen product • Difficult to define, e.g. surimi, reformed meat products • Can be characterized by: • Extensive development time • High research and development time • Expensive marketing strategies • Expensive sapital costs for equipment • Risky • If successful, imitators will flood market

21. Conclusion • Economics, consumer and competition necessitate new product development • New products should be consistent with goals and strategies of a business • Success of new products depend on the availability of inputs, and the management of cost and quality