by Jeff Manning
It is hardly profound to say successful companies and brands spend substantial time and energy researching who ultimately buys and consumes their products. Yet, far fewer study the industrial buyers who make the ingredient decision, despite the fact that, for many category marketers, the ingredient decision is absolutely crucial. Many rush into product development, spending hundreds of thousands of dollars on concepts, nomenclature and packaging without a clear understanding of what the ingredient decision-maker truly wants.
In March 2010, The Cherry Marketing Institute—an organization funded by North American tart cherry growers and processors—commissioned a research study designed to help understand or “dissect” the ingredient decision process among major food manufacturers and food service operators. Information and insights from the study, funded in part by a Utah state grant, will be used as the foundation of a product innovation program, and has far reaching implications for any ingredient marketer.
The study, managed by Nina Diamond, Ph.D., of the B/R/S Group, involved in-depth phone interviews with senior R&D or marketing executives at 17 major food manufacturers and food service operators. The goals were to identify the key decision-makers, define the decision making process, identify the key factors underlying fruit ingredient decisions, gain perspective on use and perception of tart cherries, and provide direction for the product innovation initiative.
Several key findings emerged from the discussions. First, nearly all major companies take a Stage Gate approach to new product development. This multi-stage process usually starts with a concept and forces the ideas through a series of management evaluations. At any point, management will approve certain ideas and “kill” others. The objective is to minimize risk and ensure new products have the potential to generate minimum levels of sales and profits and are a strong fit with the brand.
Second, the driver in the ingredient decision is usually the R&D department with support and direction from the marketing function. The exception is when marketing has a clear idea of the end product and “dictates” the key ingredient (e.g., Pom Wonderful, Ocean Spray Blueberry Juice). Even in this case, R&D plays a major role in examining the viability of an ingredient.
Third, the most important factor in ingredient use is broad consumer awareness and preference. This trumped flavor, price, supply, consistency and physical properties. As one manufacturer R&D reported: “Popularity is number one, jumps in front of everything else. Everything else is tied because if you can't sell it there isn’t a reason to do it.” In addition, consumer appeal relates to both breadth of appeal (general popularity) and intensity of appeal (hotness/fashion/celebrity quotient). For example, a foodservice R&D respondent noted, “We look at where a fruit ingredient was positioned over the last few years, as well as where we think it’s going.”
Next, manufacturers are aggressively looking for new products that contain fruit. They are well aware of “superfruits,” and seek to use them as ingredients whenever possible. This is good news for industries such as nuts and dried fruit, to whom ingredient use in a broad range of finished products is pivotal. From this standpoint, availability is critical, from both an overall supply and year-round access standpoint.
Finally, the R&D respondents were incredibly tapped into both current and, very importantly, emerging trends. Not surprisingly, they scan a wide variety of traditional and Internet-based media for signs that one ingredient may be fading and another may be on the verge of mass consumer appeal. This strongly reinforces the need for marketers to delve deeply into vehicles like social media and develop grassroots momentum for their brands and categories.
Jeff Manning is the chief marketing officer with the Cherry Marketing Institute. The full report referenced in the article is available by e-mailing info@choosecherries.com .
