What separates thewinners from thelosers in new food

productdevelopment?

Barbara Stewart-Knox* andPeter Mitchell

Northern Ireland Centre for Diet and Health (NICHE),UniversityofUlster,ColeraineBT521SA,UK(tel:+44-

28703-24965; e-mail: b.stewart@ulster.ac.uk)

The low rate of innovation and high rate of failure of newfood products is a cause for concern. Whilst a wide rangeof product development process factors are known toinfluence product success and failure, these predictors arebased almost exclusively upon investigations into ‘industrial’rather than food products. In this paper, an analysis ofexisting models of product development is carried out, arecently developed model for reduced fat food productdevelopment is described and implications for best practicein food product development discussed. Market and con-sumer knowledge and retailer involvement are key successfactors in food product development.# 2003 Elsevier Science Ltd. All rights reserved.

IntroductionNew food product innovation is necessary for survi-

val in today’s competitive global market. Yet, despitethe large amount of research, published on optimisingthe product development process, the vast majority of

new food products (72–88%) continue to fail (Buisson,1995; Lord, 1999; Rudolph, 1995). If a ‘new’ foodproduct is defined as ‘one that is new to the consumer’,only 7–25% of food products launched can be con-sidered truly novel (Lord, 1999; Rudolph, 1995). Thislow rate of innovation, coupled with the high failurerate of food products following market launch impliesthat the methodology for new food product develop-ment urgently needs improvement. The process needsto become more ‘focused, quantitative, rapid andknowledge based’ (Earle, 1997a). Nevertheless, analysesof the product development process have almostexclusively focused upon developing models for ‘indus-trial’ product outcomes (Burchill & Fine, 1997; Cala-tone & Cooper, 1979; Cooper & Kleinschmidt, 1996;Ford & Sternman, 1998), whilst neglecting food pro-ducts. So far, only five studies appear to have addres-sed issues relating to product development in the foodsector, one of which is a qualitative study (Parr, Knox,& Hamilton, 2001), two of which are surveys (Hoban,1998; Iiori, Oke, & Sanni, 2001) and very recently, twopredictive models of food product development (Knox,Parr, & Bunting, 2001; Kristensen, Ostergaard, & Juhl,1998). Findings derived from previous research into theproduct development process both generally and speci-fically in relation to food are discussed with referenceto best practice.

The product development processThe product development process has been described

as a five to eight-step process including idea or conceptgeneration and screening, research, development andproduct testing and marketing launch activities (Rud-der, Ainsworth, & Holgate, 2001). Early models of pro-duct development implied that those companies whoemployed a stepwise new product process were moresuccessful (Booze-Allen & Hamilton, 1982; Cooper &Kleinschmidt, 1987). However, it is now generallyaccepted that a stepwise model of food product devel-opment is over simplistic and that a concurrent oroverlapping, flexible team oriented product develop-ment process is more advantageous than a sequentialprocess (Cooper & Kleinschmidt, 1996; Earle, 1996;Ford & Sternman, 1998; Jenkins, Forbes, Durrani, &Banerjee, 1997; Krishnan, Eppinger, & Whitney, 1997;Urban & Hauser, 1993). Dahan and Hauser (2001)describe an ‘end to end’ model, within which different

0924-2244/03/$ - see front matter # 2003 Elsevier Science Ltd. All rights reserved.PI I : S0924-2244 (02 )00239-X

Trends in Food Science & Technology 14 (2003) 58–64

Viewpoint

* Corresponding author.

stages are integrated and sometimes repeating andincluding factors external to the process such as exper-tise of team members and the supply chain. Such amodel enables consideration of the various trade-offsbetween different aspects of the process. For example,using ‘existing platforms’, that is, those resources thatare already set in place for other projects and or forproducts of similar composition, can save time andmoney but may compromise on satisfying consumerneed. More recently, product development has come tobe perceived as a spiral process providing repeatedfeedback through every phase (Dahan & Hauser, 2001).In practice, these models emphasise the integration ofthe different stages and repeated evaluation throughoutthe process.

Success and failure and the product developmentprocessThe work of Cooper and colleagues (Calatone &

Cooper, 1979; Cooper, 1993; Cooper & Kleinschmidt,1986, 1987, 1996) over more than two decades hasencouraged product developers to consider not onlywhat they do but also how to go about it. There is con-siderable evidence to suggest that there are consistentpatterns that contribute new product outcome. Groundbreaking research by Calatone and Cooper during thelate 1970s established that product success is dependentupon the product being unique and superior; goodunderstanding of consumer wants, needs and pre-ferences; effective communication between productdevelopment team personnel; top management support;and, effective product marketing and launch (Calatone& Cooper, 1979). The international SAPPHO projectand other cross-industry investigations carried outwithin the USA, Japan and Europe (Booze-Allen &Hamilton, 1982; Rothwell, 1976; Utterback et al., 1976),also consistently found that senior management invol-vement in product innovation and pre-market consumerresearch were among crucial factors for product success.On the other hand, lack of market knowledge andtechnical problems tended to be associated with productfailure.Subsequent critical analyses of the new product

development process have aimed both to refine Coop-er’s model and to generalise it across different industriesand cultures. Meanwhile, evidence that product failureis most closely linked to inadequacies within pre-development activities has steadily accumulated(Cooper, 1993; Cooper & Kleinschmidt, 1986, 1987;Davis, 1993; Dyer, Gupta, & Wilemon, 1999; Song &Parry, 1996). Models of product development, whetherapplied to food or not, consistently link product suc-cess to ‘up-front’ activities such as consumer testingand the subsequent feeding through of consumer needinto technical development (Dahan & Hauser, 2001;Rudder et al., 2001).

Although the involvement of senior personnel in theproduct development process has been found to beadvantageous for success, more recent research hasindicated that cross-functional teams are even moreeffective than coordinator led or matrix approaches(Cooper & Klienschmidt, 1996; Dyer et al., 1996; Jen-kins et al., 1997; Karlsson & Ahlstrom, 1997). Alsoimportant is communication between the different teammembers, particularly between technical and marketingpersonnel (Dahan & Hauser, 2001; Rudder et al., 2001).This implies that companies, who bring together indivi-duals from different departments and from beyond thecompany to work cohesively together, are more likely tobe more successful. Cross-industry research thereforeimplies that an interdisciplinary team, an original pro-duct idea, in addition to thorough market research andcareful planning at the concept stage of product devel-opment could potentially prevent problems arising else-where in the product development process.

Success and failure and the food product develop-ment processSo, how does research into product development

translate to food? Research specifically into food pro-duct development has indicated certain factors for suc-cess. Results from three recent investigations into thefood product development process are compared (Table1). Hoban (1998) reports a survey carried out in theUSA, while Kristensen and colleagues (1998) in Den-mark and Stewart-Knox, Parr, Bunting, and Mitchell(in press) in the United Kingdom (UK) report models offood product success and failure. Common to all threestudies, are the findings that market and consumerknowledge and retailer involvement, were associatedwith success. There also appeared to be some agreementthat original products were more likely to be successful.Although the Danish team found product adaptationsto be more successful, they do not appear to take intoaccount whether or not the original product conceptwas unique. Where assessed, the involvement of outsideagencies and enlistment of technical expertise appearedimportant for food product success.There is however, disagreement on the degree to

which the involvement of senior management deter-mines product outcome. Whereas the UK study foundsenior management involvement in the product devel-opment process to be irrelevant to product outcome,studies carried out in the USA and Denmark found it tobe a determinant of product success. This apparentcontradiction could reflect industry structure, manage-ment culture and marketing environment differences.The UK sample comprised a greater proportion ofsmall to medium sized companies wherein senior man-agers tend to have a shorter term tactical rather thanlonger term strategic outlook, and where levels of retai-ler involvement in product development tend to be

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higher. Nevertheless, these results imply a need formore research investigating the relevance of various in-house and external sources of expertise for food pro-duct outcome.Consistent with previous analyses of industrial pro-

ducts, food product success appears contingent upon ahigh quality product, senior management support,sound knowledge of the consumer and cross-functionalteam work (Hoban, 1998; Knox et al., 2001). However,although factors important to product outcome appearconsistent across sectors, there is evidence for cross-sec-toral variation in the degree to which various practicesimpact upon product outcome. Unique to food productdevelopment appears to be the positive impact of wideconsultation with agencies and the involvement ofexpertise beyond the company upon the success of foodproducts (Balbontin, Yazdani, Cooper, & Souder, 1999;Knox et al., 2001; Stewart-Knox et al., in preparation).Models of food product development must take intoaccount the sensory characteristics of food (Rudder etal., 2001). Input and expertise from various sourcesincluding retailers, suppliers, food and research centresis required to prevent and solve the kind of technicalproblems that inevitably arise in food product develop-ment (Stewart-Knox et al., in preparation). Onlyrecently have issues to do with communication withinthe food product development process been consideredin relation to food product outcomes. Models that havespecifically considered food emphasise involving theconsumer from the start of the process and consistentlyadvocate the integration of technology and marketingefforts.One such model is the House of Quality approach,

which is the first of four phases within quality functiondeployment (QFD) (Costa, Dekker, & Jongen, 2001).Originally developed in Japan during the 1970s for usein the automobile industry, QFD brings quality, asdemanded by a consumer market segment, to the earlystages in the product development process. Subse-quently developed by Hauser and Clausing during the1980s, QFD has recently been applied to food by Hans

van Trijp and Steenkamp (1998). QFD advocates astructured food product development process involvingthe bringing together and integration of different dis-ciplines and expertise and consumer involvement fromthe very start and as far as possible in all aspects of theprocess. The emphasis of this approach is very muchupon communication. Requirements are plotted on aproduct-planning matrix against the likelihood ofachieving these goals through technological means, tak-ing into account any trade-offs between requirements(Dekker & Linnermann, 1998). Another strength of theQFD model is that it can take into account the sensoryattributes of food. A full review describing the applica-tion of QFD in practice has previously been providedby Costa et al. (2001).It has become increasingly important to model and

assess factors for success against the food productdevelopment process. That food, not only the type offoods eaten, but also how food is produced, preparedand used is deeply rooted in our culture, implies thatthere are likely to be cross-cultural differences in termsof factors for success in food product development.There is emerging evidence for cross-cultural variationin the degree to which various practices impact uponproduct outcome (Balbontin et al., 1999). Moreresearch is clearly required to determine differencesacross cultures, food sectors and food types.

Success and failure in reduced fat food productdevelopmentNew research funded by the Food Standards Agency

(UK) has been undertaken to investigate and modelfactors specifically associated with the success and fail-ure of reduced fat foods (Stewart-Knox et al., in press).Reduced fat foods require considerable investment interms of time, money and resources whilst the risk ofproduct failure is perceived as great. Modelling of thereduced fat product development process is thereforeimportant for improved product success. This appearsto be the first study of this kind carried out in the UK(England and Northern Ireland) and to focus mainly

Table 1. Factors determining success in new food product development

Source of dataa UK model (Stewart-Knox et al.,in preparation)

Danish model(Kristensen et al., 1998)

USA survey (Hoban, 1998)

Unique product of high quality Original concepts more successful Product adaptationsmore successful

Most important factor for success

Market/consumer knowledge Predictive of success Assumedfrom retailer

Predictive of success Second important factor for success

Senior management involvement No association with outcome Predictive of success Third important factor for successPD organised /technical synergy No association with outcome No association with

outcomeFactor for success

Customer/retailer involved Predictive of success Predictive of success Factor for successSuppliers and others involved Predictive of success Not assessed Factor for successFood technologist involved Predictive of success Not assessed Not assessed

a Data is extracted from the research presented in Hoban (1998), Kristensen et al. (1998), Stewart-Knox et al. (in preparation).

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upon small to medium sized companies. The research isalso unusual in using qualitative methods for data col-lection. Key company-personnel were invited to takepart in depth interview as to their experiences in devel-oping reduced and standard fat food products. Thequalitative approach brought about a high level ofcompliance and co-operation among the product devel-opers. The qualitative approach also strengthened theresearch in that it ensured that a complete set of vari-ables was entered into the eventual model and not justthose considered important by the researchers. Theresulting model is unique not only in terms of the pro-duct focus, but also in taking account of the problems,both technical and otherwise, frequently encountered inreduced fat food product development. Product out-come was assumed from the decision taken in each caseby the company concerned. The company definition ofsuccess and failure was adopted throughout in the beliefthat this would more accurately reflect decision makingin actual commercial conditions.Information derived from 127 food product case his-

tories (both standard and reduced-fat) was used tocompile a database of 150 binary coded variables.Topics discussed included problems encountered in theproduct development process as well as relationshipsbetween different parties involved in the food productdevelopment process. Sources of information alsoincluded company profile information, product doc-umentation, marketing and sales data, equipment andprocess information. The different variables were thenscreened using cross-tabulation and accordingly enteredinto the model. The variables were then comparedthrough a series of binary logistic regression analysesand a model of best practice in reduced fat food productdevelopment constructed. Initial qualitative findingsand subsequent comparison between reduced and stan-dard fat foods were used to inform and interpret theanalysis.The findings appear encouraging for continued devel-

opment of reduced fat foods. Surprisingly, reduced fatproducts were more likely to succeed than standardproducts. This may be because such products may bemore often retailer-driven and therefore based uponknowledge of consumer needs. Also reasons for pur-chasing these products are also likely to be health ratherthan product attribute related (Knox et al., 2001). Sixgroups of variables comprised the final model ofreduced fat product development (Fig. 1). The modelwas estimated to predict product outcome with 84%accuracy. Predictive variables related to the productconcept and the source of inspiration, technical pro-blems and solutions, as well as to issues associated withcommunication within and beyond the product devel-opment team. Failure was more likely in the case of‘copy-cat’ products and where there had been a lack ofcommunication between the product developers and

other appropriate agencies including retailers andresearch centres. On the other hand, chances of successappeared enhanced by including retailers within theproduct development team. Texture problems presentedthe biggest technical barrier to reduced fat product suc-cess. Accordingly, input from food technologists, parti-cularly for recipe development, appeared imperative forsuccess.Interpretation across the model implied that commu-

nication, both between different team members and withother agencies beyond the company, throughout theprocess was crucial for product success. In contrast toexisting results from cross-industry research, althoughsenior management was involved in the development of57% of the product cases, this involvement was irrele-vant to product success. Also irrelevant to success waswhether or not the product development process wasplanned. Consistent with previous cross-industryresearch, pre-development activities and in particular,the nature of expertise consulted at concept stage waspredictive of product outcome. Wide consultation withappropriate bodies such as suppliers and research orga-nisations and sourcing of technical expertise beyond thecompany were found to enhance chances of reduced fatfood product success (Knox et al., 2001; Stewart-Knoxet al., in preparation).Pre-development consumer need research had been

carried out by the retailer for 32% of product andretailer-inspired products appeared more likely to besuccessful. The qualitative research indicated that foodproduct developers assume the retailer to have, and toact upon, informed knowledge of the consumer andmarket. More products surveyed were panel tested byretailers (46%) than by the companies who developedthem (29%). Retailer involvement could therefore betaken as a proxy indicator of consumer input into theprocess. Products developed in collaboration with sup-pliers and research centres also tended to be more suc-cessful, probably because these agencies bringtechnological expertise to the project. These resultstaken together imply that food product developerswould be wise to seek knowledge and expertise widely,in addition to that supplied by the retailer.Although retailer involvement in the product devel-

opment process was predictive of product success, thissuccess appeared contingent upon the manufacturerrather than the retailer formulating the product recipe.The qualitative research implied that company recipeswere more successful because they are more appropriateto existing expertise, process and plant. This also agreeswith the finding that successful Japanese firms buildupon existing knowledge and processes rather thaninvest in projects that require new technological cap-ability (Song & Parry, 1996). New products may there-fore be more likely to succeed if they make use ofexisting resources as far as possible. Although products

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that met with texture problems were highly likely to fail,the involvement of a food technologist, particularly atconcept and recipe stage, appeared to obviate textureproblems. It is therefore recommended that productdevelopers consult with retailers throughout the processbut develop their own product recipe employing theexpertise of a food technologist.

Implications for food product developmentImportance of innovationMore than two decades of cross-industry research

has concluded that original products are more likely tosucceed (Booze-Allen & Hamilton, 1982; Calatone &Cooper, 1979; Dahan & Hauser, 2001; Song & Parry,1996). In relation to food, there is also a growing bodyof evidence to indicate that original concepts are moresuccessful than ‘copy-cat’ or ‘me too’ products(Hoban, 1998; Knox et al., 2001; Stewart-Knox et al.,in preparation; Van Trijp & Meulinberg, 1996; VanTrijp & Steenkamp, 1998). This is further corroboratedby a recent survey of food company practices in theUSA, which has indicated that the failure rate for trulynew food products is only 25% (Hoban, 1998). Inother words, a unique product that fills a need willsucceed most often. New innovative products are morelikely to succeed because food product markets canbecome rapidly overcrowded. New and improvedtechnologies are increasingly being used in food inno-vation to successfully differentiate products (Katz,1998). Nevertheless, only a small proportion of foodproduct releases are truly innovative (Rudolph, 1995).Fear of new product failure has resulted in low ratesof innovation in the food industry with many compa-nies preferring to re-develop old products to createnew products in the attempt to increase success rates(Iiori et al., 2001; Kristensen et al., 1998; Van Trijp &Meulinberg, 1996). Ironically, this apparently ‘safe’approach perpetuates the problem of high food pro-duct failure.

Importance of consumer-driven food productdevelopmentThe food chain in Europe has undergone a shift of

control from the producer to the retailer (Van Trijp &Steenkamp, 1998), a shift that has been reflected in thevast increase in retailer ‘own brand’ food productscomprising up to 50% of the market share in recentyears (Earle, 1997b). Survey of food product develop-ment practices in the UK and the USA have indicatedthat product developers rely heavily upon retailer cus-tomers for market information (Hoban, 1998; Parr etal., 2001) and that in practice, few actually draw uponother sources such as suppliers, consultants, researchorganisations or trade journals for guidance. Conse-quently, retailer involvement in product developmenthas become increasingly important for food productsuccess (Knox et al., 2001; Stewart-Knox et al., inpress). Nevertheless, it is the manufacturer and not theretailer who carries the risk in terms of lost investment ifthe product fails. For this reason, it is crucially impor-tant that food product developers independently edu-cate themselves as to consumer need and the marketenvironment as an initial, mandatory part of the foodproduct development process. Gathering market infor-mation so that new market niches can be located fornew product ideas prior to product development mayreduce the risk of product failure and enhance chancesof product success. The need for greater involvement ofconsumers in the product development process haslong been recognised (Von Hippel, 1977, 1978). It hasbecome imperative that food product developersacknowledge and apply in practice the long estab-lished and growing body of evidence that advocatesputting the consumer at the start of the ‘food chain’(Costa et al., 2001; Lord, 1999; Moscowitz, 1994;Saguy & Moscowitz, 1999; Urban & Hauser, 1993;Von Hippel, 1977, 1978). A consumer driven foodproduct development process is likely to produce moresuccessful products.

Fig. 1. Model of best practice for reduced fat food product development.

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Importance of communication in product developmentIt has never been easier for food product developers,

including those attached to smaller companies, toobtain market information cheaply and easily forthemselves. It was predicted nearly a decade ago thatthe food product development process would be ‘revo-lutionised’ by information technology (IT) in enablingproduct testing and providing market information online (Fuller, 1994). IT has the potential to facilitatecommunication not only between different members ofthe product development team, whether based on site orelsewhere, but also between the product developmentteam and the consumer (Dahan & Hauser, 2000). Todayit is possible to generate food product concepts qualita-tively from consumers as well as to test them ‘on-line’using consumer panels (Moscowitz, 1994) thereby mini-mising risk and speeding time to market (Dahan &Hauser, 2000). Yet, despite enhanced potential forcommunication, it appears that this ‘revolution’ has yetto occur in food product development.

Implications for further researchModelling of technical and organisational problems

associated with the food product development process,both generally and in relation to specific food producttypes, is clearly required for improved food productinnovation. Such models should take into account thecommon problems that arise and also cross-culturaldifferences in terms of specific practices and the impactof these practices. There is a need to highlight targetareas for intervention aimed at reducing the failure riskassociated with food product research and developmentand encouraging the innovation of new food products.A challenge for the future will be to apply this paradigmto food product development in practice.

ConclusionsImplications for best practice in product development

appear robust with only minor differences in the weightof different factors when ideas are transferred acrosssectors from industrial to food products. Models ofproduct development agree that actions taken duringthe concept phase of the product development processand the nature of expertise employed throughout theprocess are critical to success. Consultation activitiesappear to be particularly important for food productsuccess and food companies are drawing upon outsidesupport more and more for new product success.A basic premise of Cooper and Kleinschmidt’s (1987)

model is that process factors are more important thansituational or environmental factors for predicting newproduct outcome. Redmond (1995), however, has urgedcaution in attributing new food product failure entirelyto weaknesses within the product development processwhile ignoring the wider competitive environment.Cooper and colleagues (Calatone & Cooper, 1979;

Cooper, 1993; Cooper & Kleinschmidt, 1986, 1987,1996) advocate that assessment of the market for theproduct should ideally become an integral, initial partof the product development process. In terms of foodproducts, the market is particularly susceptible to rapidovercrowding and fragmentation making new productsdifficult to locate, hence, the imperative for food pro-duct developers to anchor product ideas with soundknowledge of the market.The future success of any food company depends

upon the effective use of the new product developmentprocess. Unfortunately, following this process does notalways guarantee success with 46% of the resourcesdevoted to the process going towards unsuccessful pro-jects (Deschamps & Nayak, 1996). Existing knowledgeimplies that food manufacturers should not be afraid tocreate new innovative food products, especially if theproduct idea is based upon sound knowledge of con-sumer requirements and developed within the technicalcapability of a cohesive interdisciplinary product devel-opment team.

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