In recent years, many large food and beverage companies have adopted team approaches to new product development. The approach typically involves both a marketing department and a research and development department generating product ideas, concepts and ultimately prototypes, which are subsequently tested in selected target markets. Production engineers and advertising experts are brought in later. The development process takes anywhere from 18 months to several years before a product is launched. Because of short life cycles for many products and stiff competition, the time between product conception and product launch must move as fast as possible. Many companies take an approach that uses all departmental expertise at the earliest stages of product development. This has cut the time it takes to develop and launch new products to less than one year. Food Processing magazine reports that Coors, Hershey Foods, Planters, ConAgra, Taco Bell, H.J. Heinz, General Mills and Ore-Ida all attribute the success of new product launches in the 1990s to well-organized, multifunctional product development teams.

Successful new product development involves matching buyer preferences with the desired physical and perceived attributes of products or services. This is particularly true for foods developed from processing byproducts, because traditional markets for these products do not yet exist. Subjective perceptions of a food’s physical attributes, such as visual appeal, texture, aroma and taste, play a major role in consumer acceptance. Consumer perceptions also are affected by numerous socio-economic factors including cultural, social, personal and psychological attributes of the individual. The design of new foods also requires that domestic and international regulations for safe processing and handling, sanitary practices, packaging and labeling requirements be considered. Production and distribution costs and procedures must be evaluated to determine if the new products could be produced profitably in quantity. The complex task of developing these products requires a multidisciplinary team that includes food scientists and engineers, food marketing and economic specialists, and food safety specialists.

The LSU AgCenter has developed a consumer-driven, multidisciplinary approach to new product development in the agro-food industry. The framework includes these sequential steps: 1) identifying new product ideas, 2) analyzing economic and financial aspects of product ideas, 3) testing product concepts, 4) developing product prototypes, 5) conducting consumer taste tests, 6) following food safety considerations and 7) establishing production protocols (Table 1).

Four types of new product development in the food industry include extending or repositioning existing food products, reformulating or developing new forms of existing products, repackaging existing products and developing innovative value-added products. Research institutions, such as the LSU AgCenter, are well suited for this work. Examples of these products include crawfish minced meat, crawfish nuggets and crawfish sausages produced from the byproducts of traditional crawfish processing. These products are currently being developed by multidisciplinary teams from the departments of Food Science and Agricultural Economics and Agribusiness. Other potential prototypes include medicinal products and nutra-ceutical ingredients being developed by the LSU AgCenter’s Agricultural Biotechnology Laboratory.

Food Product Development

A product idea can be defined as any possible product that might be offered to a particular market. This broad definition allows food product ideas to come from many sources, including food industry experts, food scientists and marketing specialists.

Idea sources may include information gleaned from trade shows, research symposia, trade literature and government publications. Key industry players include managers of processing facilities, restaurant and grocery store managers, salespeople and industry consultants.

Regardless of how product ideas are generated, a method for preliminary screening of those ideas is necessary before the next stage of development can begin. Screening eliminates product ideas with low potential according to four specific criteria: marketability, technical feasibility, manufacturing feasibility and financial feasibility. For example, before the crawfish nuggets were developed and tested, numerous ideas were explored. These included crawfish stuffing, crawfish sticks and crawfish soup base. These ideas were generated and refined in discussions with food scientists and marketing specialists as well as restaurant chefs and crawfish processors.

Next, a preliminary economic analysis is needed. This involves collection and analysis of secondary data intended to determine customer trends and the potential market size and growth prospects. Market analysis provides the basis for initial screening of product ideas. The question of technical feasibility requires input from food technologists. The goal is to determine the probability that the product idea can be successfully transformed into a physical product and to estimate the time and cost required to develop the actual product. Product ideas clearing these hurdles advance to the next stage of development, which involves formation and testing of specific product concepts.

Product Testing

The testing of product concepts leads to the development of prototype products by food scientists. Different ingredients, spices and cooking processes are investigated. Food scientists have developed numerous formulations for crawfish nuggets. Technical experiments are performed in LSU’s Muscle Foods Laboratory to develop prototype nuggets under various processing conditions. These prototypes are then tested for sensory qualities of taste, texture, smell and appearance by consumers. Sensory analysis has been conducted on a number of products, including various formulations of minced crawfish meat. These analyses can be used to determine whether a product has acceptable sensory characteristics and how well the product compares with potential competition. Packaging prototypes may be developed for testing, too.

Once product prototypes have been tested and refined, food safety specialists provide input. The costs of developing and implementing appropriate quality control and HACCP systems must be assessed. Food engineers provide the primary input into the question of manufacturing potential. The time and cost required to manufacture the proposed product under commercial conditions is determined. The final criterion of product development is an assessment of the financial feasibility of the new products. This involves input of economists and financial experts of the team. The goal is to assess the capital requirements necessary to launch the product idea commercially and to estimate the potential payoff.

Potential Economic Impact

New product development using processing byproducts can change an often negative or minimum value byproduct into a product capable of covering the original processing costs or more. Since processing costs for many meats can represent 5 percent to 10 percent of the products’ costs at the packer level, using one or more of the byproducts for human food can greatly improve a producer’s net return. Use of processing byproducts for food or other uses has also generated savings in waste disposal and environmental damage. Efforts in new product development such as those of the LSU AgCenter can extract more dollars from byproducts and expand the world’s food supply.
 

R. Wes Harrison, Associate Professor; Alvin R. Schupp, Professor; and Jeffrey M. Gillespie, Associate Professor, Department of Agricultural Economics and Agribusiness, LSU AgCenter, Baton Rouge, La.

(This article appeared in the fall 2002 issue of Louisiana Agriculture.)