New Food Product Development Ideagen- May 10th 2011Jim 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
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
The Future of FoodWorld population in 1999 – 6 Billion 2012 – 7 Billion 2025 - 8 BillionEconomic development in the ‘BRIC’ countriesFinite, or diminishing arable land resources
Current Challenges• Rising input costs – wheat, sugar• Retail concentration and power – price deflation• Economic downturn• Bank facilities• Globalisation• Energy costs
‘Food Harvest 2020’A vision for the Agri-Food Sector3 Themes - Act Smart - Think Green - Achieve GrowthTargets: To increasePrimary output by €1.5 billionValue added by €3.0 billion, andExports by €4.0 billion.
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!
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
PCF Market – Trends, Drivers• Health and Well Being Agenda• Taste, Quality• Convenience• Value
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
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)
• There has been no single trend that has had a bigger impact on the food industry and will continue to do so than……..• ConvenienceRichard George, Ph.D Professor , Food Marketing,St. Joseph’s University, Philadelphia.
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
Taste, Quality• Travel – more sophisticated, demanding consumers• More affluent consumers• Eating now an adventure or new culinary experience
Value• 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 StrategyFocus on:• Competitiveness - Lean Business• Innovation - New Product, Process Development• Management Development• High Potential Start ups
Competitiveness – Lean Business• Lean Business Principles• Top management support and involvement• Across Total Value Chain• Establish structure for continuous improvement• Impressive results to date
R&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 InnovationMostly:• 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
Food Innovation New Products • Pot Noodles • Cheese Strings Process Innovation • 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• Self heating packaging• Nanotechnology in intelligent packaging• Nano sensors• DNA biochips
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.
Management Development• 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