03 - Teixeira...Coolhunters Webcizenships 29072015 JAdeBTeixeira 24 Newwaystounderstandconsumers Emerging trend Old News User awareness 100 0 Bandwagon Fireworks Pre-obsolete Nostalgia

Innova&on to meet changing consumer needs

J. André Teixeira, BSc, MSc, MBA, PhD Execu&ve Professor, Innova&on

Antwerp Management School, University of Antwerp, Belgium Lorange Ins&tute of Business, Zurich, Switzerland

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Five Innova&on Clichés •  Think out of the box

•  Innova&on is a must

•  Act local, think global

•  Consumer-‐led innova&on

•  Follow trends, research the market


“Thinking out of the box”: The world’s favourite cliché

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2, 4, 8, 16, 32, 64, 128

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8, 5, 4, 9, 1, 7, 6, 3, 2

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First pre-‐requisite to achieve great innova=on: Avoid fixedness

Marilyn Monroe’s skirt scene

Einstein’s tongue

Peace symbol

Mickey Mouse profile

Mercedes logo

Olympic rings

Eiffel Tower

Andy Warhol’s Che Guevara

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First pre-‐requisite to achieve great innova=on: Avoid fixedness

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Fixednesses



Nonsense is nonsense only when we have not yet formed

the point of view from which it makes sense

The Dancing Wu Li Masters: An Overview of the New Physics

Innova&on, the new business mantra


Innova&on, the new business mantra


The other mantra is “Global”


Can innova&on be global within FMCGs?

Some food for thought

There is no

such thing

as a globa

l consumer

Huge middle classes emerging

Demographics are upside down Life expe

ctancies and life e

xpecta=ons Habits a

s key drivers


Consumers are essen&ally local


Huge middle classes emerging

•  The surge of an Oriental model •  Globalized Asian product profiles •  GINI coefficients (wealth distribu&on) changing rapidly

•  Aspira&ons becoming more domes&c •  Fusion is the name of the game


Life expectancy and life expecta&ons

% Growth 1960-‐2010 M/F

Life expectancy 2010 F

Difference to Belgium 1960, 2010 F

China 105.2 76.8 35.8, 5.9

India 57.2 67.6 32.1, 15.1

Brazil 31.9 76.0 16.7, 6.7

Mexico 33.2 79.2 14.4, 3.5

Turkey 43.0 74.2 21.3, 8.5


Life expectancy, expecta&ons and lifestyles

•  If you were 50 in 1960 living in a country where life expectancy was 60, in average you had 10 years to live.

•  If you are 50 in 2015, in that same country life expectancy is now 80. So, you have in average, 30 years to live.

•  Deduct 20 (30 minus 10) from your 50 and chances are…

•  Your lifestyle at 50 is equivalent to that of a 30 year old, fihy five years ago.


Demographics reversed

“Emerging” markets? Sales in China, India, Brazil: #1, 2, 3 in auto, cell phones, toiletries, etc.


Gender blurring

•  The male / female lines are being progressively erased by design thinking and women’s new role in emerging economies

•  In FMCGs, this tendency is most remarkable –  From foods for “real men or real women” to foods for real people

–  Gender-‐blind fragrances – Male cosme&cs

•  Fast changes in role playing lead to a new legacy being built


Habit, the greatest marke&ng challenge

"Become your customers’ habit ... not their choice.” Neale Mar=n


Some hypotheses

•  Consumers know what they want. They do not know what they will want

•  Social mobility brings “scrimp and splurge”

•  Func&on follows form vs. form follows func&on

•  New ways to understand consumers 29072015 JAdeBTeixeira 20

Want and will want


What next?


“Scrimp and splurge”

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Fast track innova&on “Idea&on Speed Da&ng”© S.I.T. Consumer engineering “S&rring” commimees Mul&disciplinary analysis Foresight labs Habit assessment Mul&cultural tools Focus(ed) groups:

Early adopters Opinion formers Trend semers Category travelers

Ethnographic studies Mnemonics Rituals Cloud communi&es Buzz networks Cool hunters Web ci&zenships


New ways to understand consumers

Emerging trend

Old News

User awareness 0 100

Fireworks Bandwagon

Pre-obsolete Nostalgia

Users, trends and NPD


Emerging trend

Old News

User awareness 0 100

Fireworks Bandwagon

Pre-obsolete Nostalgia

Users, trends and NPD


Compe

&&ve Posi&on

Diffe

ren=

ated

Not differen

=ated

Price Market Premium

Clients’ needs, desire

s, expecta&o

ns

Relevant

Less

relevant

Extract raw materials

Manufacture goods

Deliver services

Stage experiences Customiza=on

Commodi=za=on

The economic value chain of goods, services and experiences

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Emo=onal iden=ty and Credibility


The Paradigm of Innova=on in Consumer Goods involves answers to 4 ques=ons

Innova=ve Idea

?

?

?

?

New Users

New Benefits

New Channels/Geographies

New Occasions

Answer YES to one or more of these ques=ons and you will probably have a good idea

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The innova&on paradox

•  The same people who want the latest gadget, the most modern technology, the best medical amen&on…….

•  …..wish everything were just like mother nature intended, with the added benefit of:

–  sustainability –  ecological balance –  renewability of resources, etc.

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The food innova&on paradox

•  The same folks who want the latest

gadget, the most modern technology,

the best medical amen&on…….

•  …..wish their food tasted just like

grandmother made it…

–  and very few grandmothers were

chemical engineers…

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Home made

Commercial

Convenience

Tech

no

log

y S

tre

tch

NWH * perception

Se

nso

ry

Str

etc

h

* NWH : Natural, Wholesome, Healthy

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Mother Nature’s greatest advantage


Consumer expecta&ons

•  “Natural” driven by un-‐natural criteria – Standard dimensions – Standard colours –  Instant ripening – Uniform taste and smell – Seasons erased

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Consumer-‐centricity •  The old paradigm was a one-‐way rela=onship: Brands

speaking to consumers in the mainstream media was the voice. The new paradigm is different; it's a two-‐way rela=onship: consumers want to be heard and the brand needs to respond

•  Social media is a major vehicle •  Consumers are vo=ng with their shopping cart for brands

that demonstrate that they're listening to the poten=al benefits consumers are looking for in products

•  There's recogni=on that if a brand doesn't evolve to address consumer needs, they'll be lel behind. The role of the retailer is to balance their needs with consumers

•  Ingredients are a major concern

Consumer Concerns with Food Ingredients

•  Three types of concerns: – Medically driven ingredient concerns (eg, gluten-‐free, foods for people with diabetes)

–  Ingredients appropriate for specific dietary choices and lifestyles (eg, vegan, kosher)

–  Ingredients that represent an "absence of nega&ves" (eg, GMO ingredients, and ar&ficial sweeteners, flavors, and preserva&ves)

Food Science and Technology •  The ul&mate value adding factor in the economic chain of foods •  From the farm to the plate on the table, many areas of science and technology:

–  Soil Science –  Meteorology –  Plant Science –  Animal Husbandry –  Biotechnology –  Agricultural Engineering –  Processing Technology –  Food Engineering –  Food Science and Technology (Chemistry, Biochemistry, Microbiology, Physical Chemistry, etc...) –  Nutri&on –  Diete&cs –  Sensory Science –  Anthropology –  Social Sciences –  Neurobiology –  Psychology –  Home Economics –  Food Law


However, the science and technology needed to feed, sa&sfy and indulge the

world popula&on will somehow be a kind of “closet” technology.

So far, most consumers wanted to take advantage of the plen&ful supplies, the safety, the variety and diversity of food offerings,

without thinking or being told about the technology behind them.

Compe

&&ve Posi&on

Diffe

ren=

ated

Not differen

=ated

Price Market Premium

Clients’ needs, desire

s, expecta&o

ns

Relevant

Less

relevant

Extract raw materials

Manufacture goods

Deliver services

Stage experiences Customiza=on

Commodi=za=on

The economic value chain of goods, services and experiences

JAdeBTeixeira 37

Emo=onal iden=ty and Credibility


Transparency from the

farm to the dining table

Food Innova&on

•  In Food innova&on, the consumer-‐centric approach is a must

•  Understanding new agendas is essen&al

•  The transparency of the food chain is cri&cal

•  An&cipa&ng trends by scanning many sources

•  Example: –  Emerging food trends:

•  Whole grains becoming the new normal

•  African heritage cuisine goes mainstream

•  Plant foods, old and new •  Personalised flavour preferences through herbs (Baharat, Provence, etc.)

•  Cultural condiments (kimchi, pickled vegetables, preserved lemons, etc.)

Major predic&ons affec&ng Food NPD •  Moving from:

•  Internal R&D

•  Problem solving

•  Compe==on

•  Teams of specialists

•  Disease response

•  Unhealthy but convenient

•  Lab science

•  Lifelong employment

•  Recyclable packaging

•  Breeding and cul=va=on

•  Measuring taste

•  Acceptable performance (heart,

diges=ve, beauty, etc.)

•  Moving towards:

•  Networked innova=on

•  Dilemma sensemaking

•  Compe==on and coopera=on

•  Transdisciplinary individuals

•  Beper than healthy

•  Portable and nutri=ous

•  Embedded innova=on

•  Serial careers

•  Smart packaging

•  Synthe=c design

•  Modeling sensory percep=on

•  New fron=ers of performance (cogni=ve, visual acuity, etc.)

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Ea&ng and Believing •  Shared values: Consumers want to know that a food company has similar values related to issues

such as sustainability and social consciousness.

•  Trust and ultra transparency: Consumers want to trust a food company, which is proven by transparency taken to even greater levels.

•  Cleaner and clearer food labels: Clean food labels with few ingredients are in demand, but consumers want these labels to be even more simple and clear.

•  Third-‐party cer&fica&ons: Consumers want proof of sustainability.

•  Food supply chain traceability: People want to know where food ingredients come from, down to the specific farm.

•  Profit to be associated with doing good: The fastest-‐growing brands are linking profits made by customer purchases with doing good, such as suppor&ng a village or dona&ng items to low socioeconomic popula&ons.

•  Grocery store chains to partner with them in promo&ng health: Consumers want to know that their grocery store is on their side, helping them achieve their total health goals.

Changing Consumer Needs

Ea&ng and

Believing

Shared values

Trust and Ultra-‐

transparency

Clearer food labels

Third party cer=fica=ons

Food supply chain

traceability

Profit associated with doing

good

Grocery stores as

promoters of health

US Na&onal Restaurant Associa&on trends for 2015 (1300 chefs surveyed)

•  Among the top 100 food trends (those which at least 50% of chefs iden&fied as a hot trend), whole grains placed prominently throughout the list:

•  #4 Healthful kids’ meals •  #5 Natural ingredients/minimally processed food •  #11 Non-‐wheat noodles/pasta •  #12 Gluten-‐free cuisine •  #13 Ancient grains •  #14 Whole grain items in kids’ meals •  #17 Nutri&on •  #26 Non-‐wheat flour (e.g. millet, barley, rice) •  #27 Simplicity/back to basics •  #34 Quinoa •  #39 Ethnic Flour (e.g. teff) •  #41 Nose-‐to-‐tail/root-‐to-‐stalk cooking (e.g. using en&re animal/plant) •  #46 Black/forbidden rice •  #80 Farro •  #94 Asian noodles (e.g. soba)

US Na&onal Restaurant Associa&on trends for 2015 (1300 chefs surveyed)

•  New to the list: Focus on natural ingredients and minimally processed food (#5)

•  Grain-‐based meal: building blocks of meatless/vegetarian items (#32) and ethnic cuisine (such as ethnic inspired breakfast items, #16, or ethnic fusion cuisine, #61)

•  One unifying theme for 2015 is grain variety. Indeed, while the gluten-‐free fad is losing some of its steam compared to previous years (-‐7%)

•  Chefs are including other ancient grains (such as naturally gluten-‐free quinoa, amaranth, millet, and teff), as well as pasta made from non-‐wheat sources, such as brown rice, buckwheat, or quinoa

•  Asian noodles (such as the tradi&onal soba noodle, made from whole grain buckwheat) are also gaining popularity (+5%) this year

•  Whole grain items in kid’s meals (the most popular kids’ meal trend behind healthful kids meals) took #14 in the top 20 food trends, placing above fruit/vegetable kids’ side items (#19), kids’ salads (#43), and oven-‐baked items in kids’ meals (#53)

•  From exo&c ingredients and ethnic flours, to the classic pantry staples (56% named oatmeal as a perennial favorite), whole grains are stepping into the spotlight in 2015

TRENDS IN FOOD R&D So, how is R&D coping?


Food R&D and Innova&on •  Seamless integra&on of Agricultural Sciences with Food Science and

Technology

•  Technologies consumers do not know they will want

•  Availability, Acceptability and Affordability

•  Capitalizing on food origin (Australia, a great “D.O.C.”)

•  Consumer-‐centric, not necessarily consumer driven

•  Fact-‐based real science

•  Crusade against the fact-‐free environments

•  Alert against “pop science” 29072015 JAdeBTeixeira 46

We are going to starve to death, but we will be perfectly “healthy”

by the =me we die

Food is like love. All you need is sanita=on, varia=on and

modera=on

Documents

03 - Teixeira...Coolhunters Webcizenships 29072015 JAdeBTeixeira 24 Newwaystounderstandconsumers Emerging trend Old News User awareness 100 0 Bandwagon Fireworks Pre-obsolete Nostalgia