Building a Sustainable Innovation from Scratch by Amanda Smeller of AdvancePierre Foods

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Amanda shares how she started from scratch to create both an innovation program and a consumer insights department at AdvancePierre Foods. Her challenge was to build a methodical, repeatable process that included consumer insights at every step of the way while dealing with time, budget and risk constraints. She will describe the scrapes and bruises and more importantly the wins the company achieved along the away. Amanda will discuss the importance of creating a culture that fosters innovation and consumer insights and educating internal customers in order to successfully implement an innovation program. She will also talk about the criticalness of making certain that the new process builds value into each step from idea generation to launch into the marketplace.

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Building a Sustainable Innovation from Scratch by Amanda Smeller of AdvancePierre Foods

  1. 1. Building a Fact Based,Sustainable Innovation Program …from Scratch Amanda Smeller, Director of Consumer Insights and Innovation October 18, 2012 1
  2. 2. AgendaThe Set UpObjectives of the Innovation ProgramThe Fun Part…Finding New IdeasThe Wrap Up
  3. 3. The Set Up 3
  4. 4. Who I am Began career in Food Science at Abbott Labs Moved into Market Research/Consumer Insights Worked on client, supplier, and agency side of business In 2009, opportunity to join Pierre Foods
  5. 5. Painting the Picture
  6. 6. What Do All These CompaniesHave in Common? Epiphany #1: Not everyone felt we needed CI or an Innovation Pipeline.
  7. 7. Four Distinct Business Units Select Customers NationalNational Accounts Accounts Chain Accounts Foodservice Foodservice Schools Vend/C-Store Vending / C-Stores Retail Brands Club Epiphany #2: Lots of channels… lots to learn.
  8. 8. And Separate Locations Portland, ME Amherst, OH Cincinnati, OH (HQ) Enid, OK Claremont, NC Easley, SC Manufacturing – Fully Cooked Manufacturing – Raw Assembly/Bakery Facilities Distribution Epiphany #3: We are far, far apart!
  9. 9. Objectives of theInnovation Program 9
  10. 10. Task at Hand Create an ongoing, sustainable 3 year innovation pipeline that:  Maximizes resources  Minimizes our go to market risks  Sets us apart from like competitors  Gives us enough ideas to both fail and win Specific Company goals:  Sales volume ($ & lb.) from qualified new products is 10% Ideas that are new to:  Line, channel, company, world  Categorized as Line Extensions or Growth in our PPF system
  11. 11. Guardrails for Innovation Pipeline Ideas Passes internal testing Aligns with trends Fits into multiple APF channels Aligns with APF competency and strategy Has good potential revenue
  12. 12. Concept Scores/Testing Test among consumers and/or food service operators  Purchase Intent and Uniqueness Develop hurdles  Common sense and experience  Seek out industry standards Epiphany #4: Wait…does traditional testing work for these channels? Epiphany #5: Where am I going to find ‘hurdles?’
  13. 13. Understanding Trends Conduct trends analysis annually Tap into secondary subscription services Conduct project specific category analysis
  14. 14. Applicability to Various Channels Ideas have to ‘fit’ into different formats that are channel specific  Retail versus foodservice  Single serve versus mass feeding (QSR versus college cafeteria)  Operational footprint considerations  Held frozen versus refrigerated versus warmer Epiphany #6: It is REAL easy to get bogged down in complexity.
  15. 15. APF Competency and Strategy Epiphany #7: OK – What is APF’s strategy again? Align with competency and strategy Bucket products into manageable categories  Volume  Size  Gross margin  Outside trends Merge all systems to one sales reporting system Define ‘Pillar Categories’
  16. 16. Potential Revenue Epiphany #8: Hmmm…?!?!?! More familiar with retail models Designed two algorithms –retail and foodservice  based on internal successes, like items, and test scores Big opportunity to get better
  17. 17. The Fun Part…Finding New Ideas 17
  18. 18. Developed APF’s Consumer-Centric Innovation Process Idea Generation Concept Prototype Initial & Concept Screening & Development & Product Testing Exploratory Development Refinement Refinement• Purchase analysis • Brainstorming • Internet studies • Sensory testing • Sensory testing• Consumer needs • Preliminary market • Volumetric forecasting • Qualitative research • Qualitative research assessment assessment • Qualitative research • Quantitative research • Quantitative research• Trend analysis • Technical assessment • Quantitative research • Packaging research• Segmentation • VOC research • SWOT analysis • Trade-Off analysis• Ethnographic • Pricing research discovery • Line optimization• Technological • Claim research assessment • In-Home use testing Epiphany #9: Budget (none) and timing (now) needs to be managed. 18
  19. 19. Part of Innovation Process Idea Generation Concept Prototype Initial & Concept Screening & Development & Product Testing Exploratory Development Refinement Refinement Fuzzy Front End of Idea Enters Formal Innovation System 19
  20. 20. Sources for New Ideas External customers/ Idea Generation operators Initial & Concept Exploratory Development Internal Trends (Sales, (Secondary) NPD, Marketing) New Product Concepts Discovery Suppliers Research (Primary) Epiphany #10: Respect how things had been done and add on. 20
  21. 21. Initial Exploratory & Idea Generation:Annual Innovation Calendar Quarter 1 Quarter 2 Quarter 3 Quarter 4 ‘Newidea@advancepierre’ mined on quarterly basis, innovation team review Quarterly activities/contest among employees through portal Oldies But Vendor Fair: Goodies: leveraging their Ideation with competency internal legacy against macroemployees across trends BUs/channels Industrial/National Account specific ideation Food Service Channel Discovery Ongoing Trend Watching/Fast Followers in relevant categories C-Store/Vend Low Hanging Fruit/Oldies But Goodies FS Channel concept screen concept screen concept screen
  22. 22. Concept Development and Screening Concept Screening & Refinement Very high level – product statements Two annual concept screens: 20-40 ideas Team refines Innovation Pipeline Innovation Pipeline Template per idea Projects initiated into PPF system Epiphany #11: An idea has to be LOVED to live! 22
  23. 23. Example of Innovation Pipeline – Year 1No Concept Year/ FS K-12 Retail C-S/ Oppty Dev 1st 2nd Vend $$$ Resources1 Fully Cooked Philly Steak Breakaway 11/2nd X X X $$ BS/LG Fully cooked, steak puck2 Smart Picks 2nd Generation 11/2nd X X $$ TG/CD New line-up of BFY items/whole grain3 Grilled Dippers/Schools 11/2nd X $ TG/TS Non-fried nuggets that have a dry rub4 Flatbread Sandwiches 11/2nd X X X X $$$ BS/JN Healthy, on the go alternatives to regular sandwiches
  24. 24. Pipeline Concept Template: Create a Template that includes:  Revenue Potential  Development Timeframe  Manufacturability  Fit with Strategy  Background  Consumer Testing  Trends  Competitive Set  Proposed Pricing  Next Steps
  25. 25. Concept A: FC Philly Steak Break Away Channel/Revenue Potential FS 250-1mm 1-5mm 5-10mm 10mm+ Schools 250-1mm 1-5mm 5-10mm 10mm+ Retail 250-1mm 1-5mm 5-10mm 10mm+ C-S/Vend 250-1mm 1-5mm 5-10mm 10mm+ Create a product that is wider/broader than a fully cooked Philly Cheesesteak application (which isVersatile steak like niche) product to: Development Timeframe Use on a sandwich (steak & 6 mo or less 6-12 mo 12-18 mo 18-24 mo egg, blue cheese & grilled onion) Chop on the grill for Manufacturability traditional Philly Low Modest Good Very high Rough chop with an Asian sauce for stir fries Product Fit with Company Strategy Cook, season with. Low Modest Good Very high vinaigrette, slice to top a salad
  26. 26. Completing the Process Prototype Development & Product Testing Refinement Project in PPF system  Resources are assigned Project follows ‘typical’ project development  Prototype development/testing  Concept/product fit  Variety development, etc. Epiphany #12: Let ideas die if they need too. 26
  27. 27. Measuring the ROI of anInnovation Process Remember Company goal:  Sales volume (sales & lbs.) from qualified new products (24 months or less in commercial distribution) is 10% PPF Quarterly Review reports on:  Amount of projects  Project types (extension, renovation, growth, ops)  $mm in YTD invoiced revenue from new products  Projects, $mm, and volume generated by product pillar  Project turn time Epiphany #13: A great program must rely on support systems.
  28. 28. Example: PPF Review Q2 2012 YTD Q2 2012 there were 139 projects in the PPF. Most are line Extensions and Renovations. 12 Growth projects are active in the pipeline.
  29. 29. The Wrap Up 29
  30. 30. Program Success is Dependent on… Goals Benchmarks Templates  Reporting  Pipeline Developing/aligning other support systems  Overall company strategy  Sales reporting system  Project Portfolio Forum (PPF)
  31. 31. Other Factors to SuccessJust start  All pieces will not be in place from Day 1  Not all projects need to follow entire processProgram toneDeveloping culture“Stick to the original plan, but play it by ear.”Casey Smeller  Be malleable and learn from mistakesInternal educationSell, sell, sell – to your internal customersHave fun and celebrate successes!
  32. 32. Examples of Recent Innovation

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