Breakthrough Food Product Innovation Through Emotions Research

David Lundahl

• Publisher: Academic Press
• Year: 2011
• Print ISBN: 9780123877123
• eBook ISBN: 9780123877147
• Topic: Technology & Engineering
• Subtopic: Food Science
• Index: Technology & Engineering

More than 95% of all consumer product launched in the packaged goods sector fail to achieve their goals for success. Breakthrough Food Product Innovation Through Emotions Research gives a clear answer for innovation teams seeking to increase product success rates by breaking through the clutter in an otherwise undifferentiated, commoditized marketplace. Through case studies, it lays out a practical approach for applying emotions research throughout the food innovation and product development process. The basic premise is that emotions are the chief motivation for why consumers sense, select, seek and share their food product experiences. With this novel framework, the science of consumer behavior is made operational for innovation teams. Emotions insight inspires innovation teams to create and helps guide decision making as they design sensory cues and other behavior drivers into products that make consumers want to consume.This book has implications for the whole innovation team - innovators such as product developers, designers, creative chiefs, and marketers; strategists such as line managers; and researchers such as sensory and marketing researchers.- Presents a behaviour-driven approach to innovation for the development of breakthrough food products- Illustrates a collaborative framework to inspire creativity and guide decision making through emotions insights- Explores a research framework that gets to the "whys" of consumer behavior by distilling the science of emotions into research insights- Defines design and development methods to build sensory cues into packaging and packaged foods that deliver emotional impact- Explains research methods that get to the "so whats" of insights through emotions research- Provides case studies and examples proving the value of the behavior-driven approach to food product innovation

Chapter 1. Change in the Food Industry

If you don't create change, change will create you.

Anonymous

Change in the food industry is being driven by historic changes in society. Recent advances in technology have led to mass collaboration, with the emergence of a more proactive consumer, who can more quickly seek out, access, and share consumer-related information over the Internet. As a result, consumers are generally more aware of products, brands, and the actions of corporations. They are seeking out brands that they believe will work for them. These changes have led to a world where food markets are more fragmented and dynamic. Lack of product differentiation has led to a downward spiral of commoditization with price the chief differentiator for consumers. The survivors of this new world will be those food companies that can adapt to change with a more nimble innovation strategy, able to evolve their brands through a new approach to innovation – behavior-driven innovation.

A Time of Change

Never before in the history of human civilization have we seen such dramatic change in the way that people are able to connect to each other and to consumer brands. The landscape of consumer product markets has been reshaped – enabled and fostered by information technology that has changed the way that consumers seek and share their experiences with their peers. Consumers are rapidly changing in how they come to know, purchase, and consume food products.

In a few short years, we have seen the product ownership balance of power shift from brand owner to consumer. Brand owners are no longer able to drive demand through mass media marketing tactics. They are waking up to a world where peer-to-peer sharing has amplified the desires of the individual. Consumers have discovered their new power – a power to rapidly self-mobilize and place new demands on brand owners. Now sitting on top of the “food chain” is an empowered consumer, seizing opportunity in a new, proactive role to drive market change.

Product marketers, developers, creative chefs, package designers, marketing researchers, sensory scientists, and business managers are all striving to adapt to this change in their respective roles. Companies are seeking better ways to organize and streamline their innovation to sustain a competitive edge in this new environment.

This book is about innovation in the face of this change. In the chapters ahead, a more behavior-driven approach to innovation will be presented. This new approach shifts the focus of innovation from the product to the experience. It reshapes innovation from a linear to an iterative process driven by insights, based upon the science of emotions to motivate consumer behavior – delivering outcomes that consumers seek.

Societal Change

Social networking and social media are having far reaching effects on individual behavior; and the newfound power of the individual is changing society. Western culture, in particular, has been radically changed through social media with the formation of thousands of loosely held, virtual social communities held together by shared values, interests, passions, and beliefs.

These virtual communities are significantly altering consumer attitudes and values. Peer-to-peer sharing within virtual communities has increased awareness, enabling a much more informed consumer to take action. The millennial generation (also known as NetGens) are characterized as being more value-driven and their use of social media is having a dramatic influence on consumer markets. This generation includes 28% of Americans (88 million) born¹ between 1980 to 1995, compared to the 76 million Baby Boomers born between 1946 and 1960. We are just now seeing the impact of this generation on our culture. Eric Qualman, author of the bestseller Socialnomics (2009, John Wiley & Sons), notes that 97% of NetGens have joined a social network. One out of nine couples in the United States met through a social network. If Facebook were a country, it would be the world's fourth largest.

¹http://en.wikipedia.org/wiki/Demographics_of_the_United_States#Population_growth

As more and more people join in the social networking revolution, it is changing where people get information, how fast they get information and what sources they trust. Peer-to-peer information is now much more trusted than information sourced from brand owners. ² The impact of these changes in seeking and sharing behavior is also leading to a much more emotionally-driven consumer.

²http://www.edelman.com/trust/2009/docs/Trust_Book_Final_2.pdf

According to social psychologists, consumers are experiencing a sense of “depletion” in the current marketplace, having less time, energy, and financial resources. This creates more emotional and impulsive buying habits. Further, the speed by which information is shared on a global scale is resulting in dramatic shifts in consumer awareness, attitudes, and behaviors. The relationship between consumer, brand, and brand owner is more dynamic, ultimately impacting how consumers purchase products and change markets.

Consider what happened to Unilever when the Axe brand “women falling at the feet of men” commercial was aired in 2007 after their Dove brand had been running its “self-esteem, real beauty” campaign for three years. Consumer reaction was swift. Within 24 hours, the Internet was filled with YouTube™ videos and posts on blogs, social communities, consumer forums, and message boards venting anger at Unilever's hypocrisy – culminating in a special report by CNN. ³

³http://www.youtube.com/watch?v=dRNbZQ7K3vo&feature=player_embedded

Market Change

These societal changes are having a dramatic effect on consumer product markets. The growing surge of highly engaged, demanding, and emotionally-driven consumers is contributing to massive market fragmentation and dynamics. In 1980, Alvin Toffler (The Third Wave, William Morrow, 1980) coined the term “prosumer” in predicting a future where the distinction between producer and consumer is blurred. Welcome to our world today! More than 20 years later, Dan Tapsott and Anthony William redefined “prosumer” in their book Wikinomics (Portfolio, 2006) to mean a consumer who is more proactive in co-creating goods with manufacturers. In this book, a more behavioral definition of “prosumer” is introduced. This definition includes not only the typical consumer behaviors of selecting and consuming foods, but also the behavior of “seeking out” brands that consumers believe will work for them and the “sharing” of their discoveries with peers.

Understanding this behavioral definition is essential to all who are involved in product innovation and development. The behavior of seeking out and/or sharing is leading to a more dynamic marketplace. The speed by which opinions can be shared and information sought leads to markets that are becoming more fragmented. This fragmentation is accompanied by market churn, where loyalties of the past are eroding. This also opens up opportunities for companies to built new brand loyalties through a wide range of niche markets.

As populations grow and new social media-driven trends emerge, many of these fragmented, dynamic markets (i.e. niche markets) will no doubt form the basis for larger, main-stay markets in the future. Therefore, it is extremely important that corporations, as brand owners, begin planning for long term corporate sustainability. Consumer awareness of corporate behaviors will have long-lasting impact on how companies, the brands they own, and their messaging are trusted by consumers. Now, more than ever, products released under specific brands must perform against consumer expectations – to deliver on the promises of the brand.

This new world is now, more than ever, a brand-driven marketplace, driven by social issues such as social justice, sustainability, health and wellness, and a wide range of other issues including safety, longevity, and comfort. How consumers come to know brands, trust what they say and align with these issues will likely impact the success of brands and brand owners.

Commoditization

At the same time as food companies are trying to adapt to huge changes in society and markets, they are also facing steep declines in margins due to commoditization. Consumers are besieged with a myriad of product choices in retail stores. That consumer product selection is influenced by a breadth of factors ranging from thinning wallets, to an increase in the number of alternatives on the shelves, to how those choices will affect their lives. Consumers want products that will make their lives better at the lowest possible price, whether it's food, beverages, personal care products, or products for their homes.

CEOs, marketers, and researchers are finding it increasingly difficult to become differentiated in the eyes of the consumer. Consider the case of a brand owner marketing products within the canned beans category. How do you differentiate yourself from your competition? What does differentiate one can of beans from the next in the mind of the consumer? Traditionally, differentiation has come through assessing the needs of consumers and applying innovation to deliver features, functionality and sensory qualities that address these needs. However, this approach to innovation has not proven sufficient to break away from the chains of commoditization that grip most brands and squeeze margins. With pinched pocketbooks and a flood of competitive, quality store brands, we are seeing increased erosion in the bulwark that main brands have traditionally built.

With commoditization, one brand has no features that differentiate it from the other brands and as a result, the consumer makes decisions based on price alone. It is one of the most difficult marketing challenges a marketer faces. With commoditization comes increased competition, and the lack of differentiation creates a downward cycle of lowered consumer desire to seek new functionality or “new and improved” intrinsic qualities. Economic downturn and market complexity leads to consumers entering the marketplace with reluctance to pay for what they see as unnecessary features and qualities. Brand owners end up with extreme price sensitivity and the nightmare of increased pressure on margins. As a result, brand owners are reluctant to invest in the creation of new and improved products, settling for cost-cutting as a way to offset lower margins. In the end, both brand owner and consumer suffer: brand owners realize lower margins, consumers less value.

This pervasive trend has hit the food industry particularly hard. The rise of store brands and private labels by retailers has further exasperated this situation for both the consumer and brand owner. With this trend, retailers are now effectively competing with brand owners - their own suppliers. No other industry sees this pervasive a problem in product development. Consider some of these statistics:

• 25% of all food and beverage purchases are store brands (NPD Group Research Reports, 2009).

• 97% of all households purchase store brands (NPD Group Research Reports, 2009).

• 66% of respondents have purchased store brands in the past month (Consumer Reports, May 2009).

• Store brands are priced competitively, averaging 30% lower in cost (IRI, 2009).

• Store brand product quality is believed to be equal to name brands (Meyers Research, 2005).

These statistics paint a picture of an industry in turmoil. The food industry is struggling to find a new formula for operation, a new business model for innovation that breaks the downward spiral of commoditization, creating a new cycle of profitability for brand owners and value for consumers. Economic downturn in general, combined with a lack of product success, has created an uncomfortable position for the food industry.

Adapting To Change

Storm Clouds on the Horizon

In 1992, the food retail industry appointed the Efficient Consumer Response (ECR) Commission⁴ to assess the economic impact of product failure. They reported that the cost development and introduction of failed new food products was nearly $14 billion in the United States alone, twice as much as the profits from the 15 largest food companies that same year. Out of their analysis, the ECR identified four key areas as essential for getting the food industry back on track, and an efficient process for new product development was cited as most important.

⁴http://www.fmi.org/media/bg/?fuseaction=ecr1

However, in spite of numerous attempts to streamline and improve the innovation and development process, the spiral of increased failure continues. New product introductions of food and non-food items...

Table of contents

• Cover image
• Table of Contents
• Front Matter
• Copyright
• About the Author
• Preface
• Acknowledgments
• Chapter 1. Change in the Food Industry
• Chapter 2. Innovation
• Chapter 3. The Innovation Team
• Chapter 4. The Science of Emotions
• Chapter 5. Emotions Research
• Chapter 6. Strategy Development
• Chapter 7. Discovery
• Chapter 8. Define
• Chapter 9. Design
• Chapter 10. Development
• Chapter 11. The Innovation Company
• Appendix 1. A Summary of the Basic Principles of Behavior-Driven Innovation
• Appendix 2. A Summary of the Goals, Guardrails, and Deliverables of Each Phase of Behavior-Driven Innovation
• Color Plates
• Index