1. New Food Product Development
Ideagen- May 10th 2011
Jim Mulcahy, Manager, Prepared Consumer Foods Dept
Enterprise Ireland
2. Agenda
• Setting the Scene- the current economic climate
• Food- our most important industry sector
• The domestic retail market
• The prepared consumer foods market- trends, drivers
• Enterprise Ireland strategy for - competitiveness
- innovation
- management development
• Some strategic options
3. The Good News!
• Manufacturing Output hits 11 year high
• More staff being hired
• Strong demand from Europe and Asia
• PMI Index (56.7) hits highest level since 2000
• New export orders expanded at second highest rate since 1998
pushing employment growth to 4 year high
4. The Future of Food
World population in 1999 – 6 Billion
2012 – 7 Billion
2025 - 8 Billion
Economic development in the ‘BRIC’ countries
Finite, or diminishing arable land resources
5. Current Challenges
• Rising input costs – wheat, sugar
• Retail concentration and power – price deflation
• Economic downturn
• Bank facilities
• Globalisation
• Energy costs
6. ‘Food Harvest 2020’
A vision for the Agri-Food Sector
3 Themes - Act Smart
- Think Green
- Achieve Growth
Targets: To increase
Primary output by €1.5 billion
Value added by €3.0 billion, and
Exports by €4.0 billion.
7. Food – Our most important industry
sector
• 9% GDP (Output of €18 billion)
• 8% of total exports to over 170 overseas markets
• 9% total employment (51,000 directly - 60,000
indirectly).
• €8 billion (71%) Irish purchases
• For Ireland, food is the business!
8. Ireland the Food Island
• Temperate climate
• Clean environment
• Traceability – safe food
• High quality product
• Surplus production – exports
• Rigorous safety standards and regulations.
• Strong educational and research
infrastructure.
• Strong Government support
10. The Domestic Retail Market
• Tesco, Dunnes, Musgraves,(70%)
• Discounters Aldi, Lidl (9%)
• Own label V. Branded
11. Retailer’s Product Criteria:
The product’s commercial performance
The supplier’s food safety systems
The supplier’s service performance.
12. PCF Market – Trends, Drivers
• Health and Well Being Agenda
• Taste, Quality
• Convenience
• Value
13. Health and Well Being (‘You are what
eat’) you
• Nutriceuticals (Omega 3 – brain health)
• Cosmeceuticals – retard aging
• Food Safety - Traceability
• Satiety - Weight control
• Natural Foods – no artificial
preservatives, additives, colourings.
Less salt, sugars, fats
14. Health and Well Being (Contd.)
• Cholesterol lowering products
• Low carbohydrate products
• High fibre
• Gluten and allergen free
• Superfruits, (Cranberries, Pomegranate, Goji, Acai)
• Calorie – burning products (containing green tea
extracts and caffeine)
15. • There has been no single trend that has had a
bigger impact on the food industry and will
continue to do so than……..
• Convenience
Richard George, Ph.D Professor , Food Marketing,
St. Joseph’s University, Philadelphia.
16. Convenience – ‘Cash rich, time poor’
society
• Changing demographics – single households. The
‘grey market’. Ethnic foods
• Demise of family meals. ‘Grazing’.
• Frozen Foods, the microwave.
• Eating out
• On the move – ‘dashboard dining’,
‘eating al desko’
• Cooking now a spectator sport
17. Taste, Quality
• Travel – more sophisticated,
demanding consumers
• More affluent consumers
• Eating now an adventure or new
culinary experience
18. Value
• Current difficult economic climate
• Price deflation due to retail competition
• Travel experience (e.g. wine)
• Discounters v. Multiples – segmenting
shopping trip (Necessities + indulgence)
19. Enterprise Ireland Strategy
Focus on:
• Competitiveness - Lean Business
• Innovation - New Product,
Process Development
• Management Development
• High Potential Start ups
20. Competitiveness – Lean
Business
• Lean Business Principles
• Top management support and involvement
• Across Total Value Chain
• Establish structure for continuous improvement
• Impressive results to date
21. R&D, Innovation
• Research – Using money to create knowledge
• Development (Innovation) – Using knowledge
to create money
22. Current Food Research
• Food for Health Ireland – extraction of milk
ingredients.
• Alimentary Pharmabiotic Centre - how intestinal
bacteria influences health and disease.
• NutraMara - researching seaweed and algae for
functional food development.
• Eldermet – the development of foods for the elderly.
23. Innovation Milestones
• Most Important Inventions of the Twentieth Century?
• Haber-Bosch Process (1913). Ammonia from
atmospheric nitrogen oxidised to form nitrate fertiliser
that sustains one third of the worlds population.
• Frozen Foods -Charles Birdseye (1920).
Convenient and nutritionally intact products.
24. Food Innovation
Mostly:
• Packaging
• Line extensions – e.g. new flavour
• Reformulation – Changing recipe
• New brand – New way of branding of existing
product
• Process reorganisation – Supply chain innovation
• Innovation essentially a market access and market
maintenance issue
25. Food Innovation
New Products
• Pot Noodles
• Cheese Strings
Process Innovation
• Cornetto
Packaging
• Heinz ‘Snap’ Pots
26. Developments in Packaging
Technology
• Most Food NPD in packaging
• Most packaging developments in active packaging
technology
• Active functions beyond passive containment and
protection
27. Developments in Food Packaging
Technology
• Biodegradable packaging
• Micro wave packaging
• Self heating packaging
• Nanotechnology in intelligent packaging
• Nano sensors
• DNA biochips
28. Exploiting Technological Change
• Biotechnology- Develop health promoting foods
• ICT – Consumer behaviour (POS)
• RFID - Traceability
• Robotics – Productivity, competitiveness
• Sensor Technology – Information generation
• Nanotechnology – Smart packaging
• Processing – Non thermal processing, freezing
technology, etc.
29. Management Development
• Seafood Processors Strategic Management
Development Programme
• Retailer Supplier Development Programmes
• Lean Business Programmes
• L4G, Transform CEO Programmes
• Key Personnel Support
30. Some Suggested Strategic Options
• New products – grapes, wine?
(Global warming)
• Organic products
• Agri- tourism, Culinary tourism.
• Food related products – Information
Technology, specialised packaging,
engineering etc
• Network with other EU regions
