HEALTHY, CONVENIENT BUT ABOVE ALL TASTY Vivien Wilton-Middlemass FDIN SEMINAR: Better Quicker & Cheaper NPD March 2009 Defining a Clear Direction

HEALTHY, CONVENIENT BUT ABOVE ALL TASTY

Vivien Wilton-Middlemass

FDIN SEMINAR: Better Quicker & Cheaper NPD

March 2009

Defining a Clear Direction


WHAT ARE THE EFFECTS OF A CREDIT CRUNCH

As the credit crunch gains momentum we see:-

MARKET PLACE • More well established brands in financial difficulty

•Every aspect of business is affected - manufacture and services

•Same pattern throughout all industry.

•Companies try to reduce their losses by:- -reducing work force -cancelling expansion projects -scaling down their operations -reducing their borrowing/borrowing more cheaply -working more cost effectively


WHAT ARE THE EFFECTS OF A CREDIT CRUNCH

As the credit crunch gains momentum we see:-

THE CONSUMER•Every aspect of the consumers’ life affected

•soaring prices•static salaries/redundancies

•Consumers re-evaluate every aspect of their lives.• Lifestyle• Attitudes to brands and services• Examine the VALUE of what they are buying• Consider WHAT to do to improve their situation


HOW DOES THIS AFFECT THE FOOD & DRINK INDUSTRY

FROM THE CONSUMER PERSPECTIVE

•In order to adjust to their situation consumers:-

•Buy less or cut out luxury items

•Trade down branded to own label/ cheaper brands

•Eat in rather than eat out

•Produce homemade rather than shop bought

•Question whether the benefits of “Healthy/Organic/Fair Trade/Premium” lines worth the extra cost.

•Buy more economical pack sizes

•Consider where they shop and the cost of getting there


HOW DOES THIS AFFECT THE FOOD & DRINK INDUSTRY

FROM THE MANUFACTURER PERSPECTIVE

•In order to adjust to changing consumer behaviour manufacturers/retailers:-

•Squeeze their suppliers on price /larger discounts

•Replace ingredients with cheaper alternatives

•Review place and methods of production

•Try to take market share from their competitors

•Review cheaper packaging alternatives.

•Review methods of distribution

•Reduce advertising/promotional activity and review its effectiveness


AT THESE TIMES

SENSORY RESEARCH CAN HAVE AN

IMPORTANT ROLE

IN SUPPORTING THE

FOOD & DRINK INDUSTRY


Will not cover the technical aspects of sensory research

but consider the benefits of using the discipline

for those in manufacture/ retail of Food and Drink products.

PURPOSE OF THIS TALK


WHAT IS SENSORY RESEARCH

Sensory Research has been defined as “ the scientific discipline used to measure, analyse and interpret the characteristics of products as they are perceived by the senses of sight, smell, taste, touch and hearing”.

Uses a panel of individuals who have been screened for their sensory acuity and trained in sensory evaluation


SENSORY RESEARCH COMPARED TO MARKET RESEARCH

•It is different from market research in that it requires:-

- Small limited numbers of respondents (5 to no more than 30)

- Respondents are not demographically representative of population - Forced choice responses

- Products are always tested blind not branded

- Products are presented in balanced designs/serving orders

- Product trials are repeated

- Respondents only react objectively to what they perceive not subjectively as to what they like

- Respondents do not measure purchase intent/degree of liking

-The testing facility and test protocols are controlled


HOW SENSORY RESEARCH WORKS

How does it work?

• Sensory Research uses a variety of test methods and standardized procedures categorised as discriminative, descriptive and affective

•Sensory Research can show us:-

• How products are different

• What attributes make them different

•The magnitude of the difference


TYPES OF SENSORY TESTS

Discriminative Test Are products different in any way

Descriptive Test How do products differ in specific sensory attributes

Affective TestHow well are products liked or which products are preferred

TYPICAL DATA FROM SENSORY RESEARCH

From the data we can produce :- -a sensory fingerprint of a product,


-sensory maps showing product relationships,


TYPICAL DATA FROM SENSORY RESEARCH

-Sensory maps which linked to consumer acceptance data the underlying sensory characteristics affecting consumer choice

From the data we can produce :-

- Product Optimisation Target sheets for R&D to action


THE BENEFITS OF USING SENSORY RESEARCH

•The following examples based on real case studies which will demonstrate the benefits of sensory research and how it can and has been used to:-

• Maintain market/brand share in uncertain times • Assist in cost reduction/ingredient replacement exercises

•Use Taste to drive innovation/NPD / product optimisation

•Target products for specific market segments

•Top tips to ensure consumer acceptance and brand equity


MAINTAIN MARKET/BRAND SHARE

Case Study K:A major pasta sauce company wanted to understand:-

-how consumers rated their product compared to their competitors -what attributes of pasta sauce drive preference -what changes to their product are needed to maintain brand share.

Sensory Research was used to:--(a) Produce a sensory map of the PASTA SAUCE market which showed

-relationships between the products -sensory attributes important in discriminating between the

products

The clients’ product F significantly different –in colour (more orange) and more onion pieces


MAINTAIN MARKET/BRAND SHARE

Consumer Research amongst the target market was used to:-- determine acceptance of all the pasta sauce products

The most liked product was a competitor brand and when correlated with sensory research data showed the main drivers of acceptance were appearance and texture and NOT Taste as previously thought.

The clients product was compared to the most liked product, significant differences in the sensory attributes of appearance and texture noted and given to R&D as targets for product change.


COST REDUCTION /INGREDIENT REPLACEMENT/ PRODUCTION CHANGE

Case Study A:A major dairy manufacturer wanted to:-

-make economies by moving production to another site -the move carried out in a phased operation

Sensory Research was used to:--(a) Determine whether there was noticeable significant difference between products produced at the old and new production sites

No: Taking part in test = 55No: Correct identification = 31No: Incorrect identification = 24No: Req’d for significance = 26 at 95% CL

RESULT: A SIGNIFICANT DIFFERENCE WAS OBSERVED

TEST REPEATED OVER TIME OF MOVE UNTIL NO SIGNIFICANT DIFFERENCE BETWEEN OLD & NEW FOUND

-(b) Descriptive sensory research showed how the old and new products were different and the magnitude of difference.

COST REDUCTION /INGREDIENT REPLACEMENT/ PRODUCTION CHANGE

KNOWING WHICH SENSORY ATTRIBUTES WERE SIGNIFICANTLY BETWEEN OLD & NEW PRODUCTS PRODUCTION TEAMS WERE ABLE TO TWEAK THE NEW PLANT PRODUCTION PROCESS


USING TASTE TO DRIVE INNOVATION/NPD/ PRODUCT OPTIMISATIONCase Study D:A major ingredient supplier was asked by major retailer to look at new product innovation for a powdered product with 90% household penetration. Sensory Research was used to:- - (a)Produce a sensory map of 24 products in and around the fringe of the product category including, current and npd powdered, chilled, canned and frozen products. The sensory research highlighted all the appearance, aroma, taste and textural differences between the products and showed their relationship to each other.

Observations (axes F1 and F2: 61.20 %)

ABG

AGC

AGG

ASP

BBB

BFNBFRBGG

CGG

DOB

GFB

MGG

MGM

OXBOXG

QGG

SCGSGGSMG

STDTBG

TVG

-150

-100

-50

0

50

100

150

-150 -100 -50 0 50 100 150

-- axis F1 (41.70 %) -->

-- a

xis

F2 (

19.5

0 %

) --

>


USING TASTE TO DRIVE INNOVATION/NPD/ PRODUCT OPTIMISATION-(b) Consumer acceptance research amongst the target market on carefully selected subset of products The preference map below shows:-

-the overall direction of liking (See arrow)(aggregated data) - individual preference directions

- how respondents cluster in their preferences


USING TASTE TO DRIVE INNOVATION/NPD/ PRODUCT OPTIMISATION-(c) By combining both sets of data using multiple regression techniques we were able to ascertain the key positive and negative drivers of acceptance and highlight New NPD Opportunities We were also able to model the acceptability of potential new products which had not yet been produced


GET BETTER SALES BY TARGETING PRODUCTS FOR SPECIFIC MARKETS/MARKET SEGMENTSCase Study C:A confectionery manufacturer wanted to rationalise their chocolate brandacross Europe. -how consumers in each country rated their product compared to their competitors -what sensory attributes of the chocolate brand drive preference-whether the same product would have same appeal to all countries. Sensory Research was used to:--map current, competitor products and potential new products-correlate sensory data with consumer preference mapping to show the differences between consumers in different European markets

Driven by sweet and flavour strength and a dislike of milky soft and cloying attributes


USING THESE MAPS, THE CONFECTIONARY MANUFACTURER DID NOT RATIONALISE THEIR BRAND ACROSS EUROPE. THEY WERE ABLE TO:-

• DIFFERENTIATE MEANINGFULLY BETWEEN UK, FRENCH AND GERMAN CONSUMER PREFERENCES

• TARGET THEIR PRODUCTS TO EACH OF THESE MARKETS

GET BETTER SALES BY TARGETING PRODUCTS FOR SPECIFIC MARKETS/MARKET SEGMENTS

Driven by of milky, soft and cloying attributes and a dislike of sweet and strong flavour


OTHER USES FOR SENSORY RESEARCH

Product matching

Product improvement-Optimise an existing formulation-Need to change raw materials/ingredients

New product development

Diagnostic tool

Quality control

Process change

Selection of new raw materials

Product grading and homogeneity

Consumer acceptance and prediction


TOP TIPS TO ENSURE CONSUMER ACCEPTANCE AND MAINTAIN BRAND EQUITY

Sensory Research :--reduces the risks in decisions about product development and strategies for meeting consumer needs. -ensures greater and often quicker success in the market place

TIPS•Don’t just wait to hear from your competitor how he has changed his product - use sensory research to find how and what exactly he has done. •Check out whether even small ingredient and formulation changes to your product are noticed by consumers before you make them, otherwise it could be too late and they may have switched to another brand•Use sensory research to check out product deterioration/ product ageing/ in the market place•Check whether all your customers are driven by the same sensory attributes in your market or could you missing a opportunity?•Check whether your product is delivering all the key sensory drivers of consumer acceptance?• Check you are producing the right product for you brand image?


REMEMBERYou may have identified that consumers want HEALTHY AND CONVENIENT PRODUCTS…….BUT THEY DON’T NECESSARILY WANT A LEMON!

… defining a clear directionMcCallum LaytonBramley GrangeSkeltons LaneThorner, Leeds

+44 (0)113 237 5590www.mccallum-layton.co.uk

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HEALTHY, CONVENIENT BUT ABOVE ALL TASTY Vivien Wilton-Middlemass FDIN SEMINAR: Better Quicker & Cheaper NPD March 2009 Defining a Clear Direction