Ideagen- May 10th 2011

New Food Product DevelopmentNew Food Product Development

Jim Mulcahy, Manager, Prepared Consumer Foods Dept

Enterprise Ireland

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

• 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

The Good News!

• New export orders expanded at second highest rate since 1998 pushing employment growth to 4 year high

World population in 1999 – 6 Billion

2012 – 7 Billion

2025 - 8 Billion

Economic development in the ‘BRIC’ countries

The Future of Food

Economic development in the ‘BRIC’ countries

Finite, or diminishing arable land resources

Current Challenges

• Rising input costs – wheat, sugar

• Retail concentration and power – price deflation• Retail concentration and power – price deflation

• Economic downturn

• Bank facilities

• Globalisation

• Energy costs

‘Food Harvest 2020’

A vision for the Agri-Food Sector

3 Themes - Act Smart

- Think Green

- Achieve Growth- Achieve Growth

Targets: To increase

Primary output by €1.5 billion

Value added by €3.0 billion, and

Exports by €4.0 billion.

• 9% GDP (Output of €18 billion)

Food Food –– Our most important industry Our most important industry sectorsector

• 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!

Ireland the Food Island• Temperate climate

• Clean environment

• Traceability – safe food• Traceability – safe food

• High quality product

• Surplus production – exports

• Rigorous safety standards and regulations.

• Strong educational and research infrastructure.

• Strong Government support

Clients

AIBP

The Domestic Retail MarketThe Domestic Retail Market

• Tesco, Dunnes, Musgraves,(70%)

• Discounters Aldi, Lidl (9%)

• Own label V. Branded

Retailer’s Product Criteria:

The product’s commercial performance

The supplier’s food safety systems

The supplier’s service performance.The supplier’s service performance.

PCF Market PCF Market –– Trends, DriversTrends, Drivers

• Health and Well Being Agenda

• Taste, Quality

• Convenience

• Value

Health and Well Being (‘You are what Health and Well Being (‘You are what eat’) youeat’) you

• Nutriceuticals (Omega 3 – brain health)

• Cosmeceuticals – retard aging

• Food Safety - Traceability• Food Safety - Traceability

• Satiety - Weight control

• Natural Foods – no artificial

preservatives, additives, colourings.

Less salt, sugars, fats

Health and Well Being (Contd.)

• Cholesterol lowering products

• Low carbohydrate products

• High fibre

• Gluten and allergen free• Gluten and allergen free

• Superfruits, (Cranberries, Pomegranate, Goji, Acai)

• Calorie – burning products (containing green tea extracts and caffeine)

• 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.

Convenience Convenience –– ‘Cash rich, time poor’ ‘Cash rich, time poor’

societysociety

• Changing demographics – single households. The ‘grey market’. Ethnic foods

• Demise of family meals. ‘Grazing’.

• Frozen Foods, the microwave.

• Eating out• Eating out

• On the move – ‘dashboard dining’,

‘eating al desko’

• Cooking now a spectator sport

Taste, QualityTaste, Quality

• Travel – more sophisticated, demanding consumers

• More affluent consumers

• Eating now an adventure or new culinary experience

• Current difficult economic climate

ValueValue

• Current difficult economic climate

• Price deflation due to retail competition

• Travel experience (e.g. wine)

• Discounters v. Multiples – segmenting shopping trip (Necessities + indulgence)

Enterprise Ireland Strategy

Focus on:

• Competitiveness - Lean Business

• Innovation - New Product, • Innovation - New Product, Process Development

• Management Development

• High Potential Start ups

Competitiveness – Lean Business

• Lean Business Principles• Lean Business Principles

• Top management support and involvement

• Across Total Value Chain

• Establish structure for continuous improvement

• Impressive results to date

R&D, InnovationR&D, Innovation

• Research – Using money to create knowledge

• Development (Innovation) – Using knowledge to create money

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.

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.

Food InnovationFood Innovation

Mostly:

• Packaging

• Line extensions – e.g. new flavour• 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

Food InnovationFood Innovation

New Products

• Pot Noodles

• Cheese Strings

Process Innovation

• Cornetto• Cornetto

Packaging

• Heinz ‘Snap’ Pots

Developments in Packaging Technology

• Most Food NPD in packaging

• Most packaging developments in active packaging technology

• Active functions beyond passive containment and protection

Developments in Food Packaging Technology

• Biodegradable packaging

• Micro wave packaging• Micro wave packaging

• Self heating packaging

• Nanotechnology in intelligent packaging

• Nano sensors

• DNA biochips

• Biotechnology- Develop health promoting foods

Exploiting Technological ChangeExploiting 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.

Management Development

• Seafood Processors Strategic Management • Seafood Processors Strategic Management Development Programme

• Retailer Supplier Development Programmes

• Lean Business Programmes

• L4G, Transform CEO Programmes

• Key Personnel Support

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

Suggested Strategic Options

• Distinctive Brand Development

• Eg. Fuschia brand, West Cork

Food Support Agencies

Thank you for your attentionThank you for your attention

Questions?Questions?Questions?Questions?