Food Product Development: Based on Experience

Food Product Development Based on Experience

Edited by

Catherine Side

Food Product Development Based on Experience

BASIC SYMPOSIUM SERIES

Food Product Development Based on Experience

Edited by

Catherine Side

Catherine Side, MA, MSc, FIFST, AIB, has been an active member of the Institute of Food Technologists (IFT) and its counterpart, the Institute of Food Science and Technology (IFST) in Britain. In 1994 she created and has since directed the Virtual Consulting Group, a successful network of over fifty bioscience consultants. She is also a member of Stratecon International Consultants. © 2002 Iowa State Press A Blackwell Publishing Company All rights reserved Iowa State Press 2121 State Avenue, Ames, Iowa 50014 Orders: 1–800–862–6657 Office: 1–515–292–0140 Fax: 1–515–292–3348 Web site: www.iowastatepress.com Authorization to photocopy items for internal or personal use, or the internal or personal use of specific clients, is granted by Iowa State Press, provided that the base fee of $.10 per copy is paid directly to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923. For those organizations that have been granted a photocopy license by CCC, a separate system of payments has been arranged. The fee code for users of the Transactional Reporting Service is 0–8138–2029–4/2002 $.10. Printed on acid-free paper in the United States of America First edition, 2002 Library of Congress Cataloging-in-Publication Data Food product development based on experience / edited by Catherine Side.—1st ed. p. cm. ISBN 0-8138-2029-4 1. Food industry and trade. I. Side, Catherine. TP370 .F628 2002 664'.0068—dc21 2002004213 The last digit is the print number: 9 8 7 6 5 4 3 2 1

CONTENTS

Contributors

vii

Foreword

xi

Preface

xiii

Acknowledgments

xv

1 Effective Communication Tom Heyhoe

3

2 Focusing on the Participants: When and How to Involve Them Herbert Weinstein

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3 Managing the Product Development Process Frank Kramer

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4 Organizing Human Resources: By Project? By Discipline? As a Matrix? Charles Beck

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5 Product Life Cycle: Consumer Market Research Herbert Weinstein

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6 Shelf-Life Considerations and Techniques Michele Perchonok

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7 Product and Concept Testing—Methods and Cost Control Tom Heyhoe

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CONTENTS

8 Case Study: Introducing a New Flavor and Color Ingredient Catherine Side 9 Food Safety Systems: Anticipating Production into the Process Richard F. Stier

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103

10 Some Lesson Vignettes from Focus Groups and Other Market Research Charles Beck

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11 Equipment Integration in the Process: Patent Questions and Vendor Confidentiality Frank Kramer

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12 The Role of Food Packaging in Product Development Aaron Brody

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13 Contract Packaging or In-House Manufacturing? Herbert Weinstein

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14 Initial and Progressive Cost Estimates Frank Kramer

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Index

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CONTRIBUTORS

Charles Beck, PhD—Stratecon Dr. Beck was educated in Chemical Engineer-

ing at Cornell University, where he received bachelor’s and master’s degrees before applying his trade to military foods during his tour of duty. He then went to the Food Science Department of the University of California, where he earned a PhD in Agricultural Chemistry. Within the food industry he has consistently sought pioneering assignments: freeze-dried coffee with General Foods (now Kraft); textured vegetable proteins with General Mills; aspartame (Equal) and foods for renal patients with G. D. Searle (now Monsanto’s NutraSweet Kelco); a pastry pizza concept with Kitchens of Sara Lee; and ten new venture projects for R. J. Reynolds Development Corp. (including packaging, fast-food restaurants, mail order, food irradiation, cut flowers, plant tissue culture, and dental technologies). Since the “Barbarians at the Gate,” Dr. Beck has been consulting to the food industry from Winston-Salem, North Carolina, and he has created a network of other international professionals who complement his skills and geography. Stratecon’s projects often help companies decide how to manage technical developments that were not requested by the marketing department. Recent activities include evaluating the market size, pricing, and structure for a natural flavoring from a novel source; coordinating the activities of a benchmarking group with similar products and distinct territories; assisting entrepreneurs with entry strategies; supporting a grain-based company in its transition from commodity to specialty products; searching worldwide for unpublished emerging technologies in a specific product sector; and guiding several clients wishing to introduce health-based ingredients. Dr. Beck is also very involved, nationally and locally, in the Institute of Food Technologists and serves the Piedmont Entrepreneur’s Network in North Carolina. vii

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Aaron Brody Aaron Brody has been involved with food product and pack-

aging development for more than forty years and has taught the subjects on university levels for more than ten years. His food industry affiliations include General Foods, where he was on the team that developed precooked frozen foods including fish sticks; Raytheon, where he was a member of the team that developed the first microwave oven; Whirlpool Corporation, where he led the development of controlled-atmosphere food preservation that led to fresh-cut vegetables; M&M/Mars, where he developed dozens of new products such as Starburst; Mead Packaging, where he created and managed the development of the Crosscheck aseptic packaging system; and CCA, where he led the development of the Versaform insert injection molding system. He teaches food product development in the Department of Food Marketing at St. Joseph’s University and product development for Keller Graduate School of Management. Dr. Brody is coauthor of the definitive text on food product development, Developing New Food Products for a Changing Marketplace. He is recipient of Institute of Food Technologists’ Nicholas Appert Award, Industrial Scientist Award, Industrial Achievement Award, and Riester Davis Award. He is a Fellow of Institute of Food Technologists and Institute of Packaging Professionals. He is a member of the Packaging Hall of Fame and a graduate of Massachusetts Institute of Technology. Tom Heyhoe, FAIFST FAOQ—Heyhoe & Associates Tom Heyhoe’s original

training was in chemistry. He started his food industry career with Unilever, and over the next twenty years he worked for a number of major food companies steadily climbing the corporate ladder. In that period he also operated one company’s in-house consumer research program for several years. Since 1984 Tom has been a specialist food industry consultant. He has undertaken a diverse range of projects including developing drink concentrates for Malaysia, research on dairy products markets in India, and food safety projects for Australian government agencies. Tom is based in Australia but has also worked in thirteen other countries. Besides working as a consultant, he has managed to fit in nine years as a lecturer in food technology, sensory evaluation, and product development. Dr. Weinstein earned his chemical engineering degree from the Universidad Nacional Autonoma de Mexico and his doctorate in Food Science and Technology from the Massachusetts Institute of Technology. He has more than thirty years of industrial experience (General Foods—now Kraft Foods—and Unilever) in most technical aspects of food manufacturing, distribution, logistics, product development, quality control, quality assurance, and management, both technical and in business. His broad experience with the many aspects of product development, as well as his teaching experience in his native Mexico, in Brazil, and in the

Herbert Weinstein, PhD—Weinstein Consulting International

CONTRIBUTORS

ix

United States, support his many contributions as lecturer and participant in technical programs for IFT functions. Since retiring from the food industry, he has had more than eight years of consulting experience in different parts of the world. He has worked in food fortification projects in several countries in Latin America, Middle East, and Africa. His expertise is in technical feasibility, quality control and assurance, analytical and manufacturing training, monitoring and control, product development, and stability testing, as well as legislation and liaison function between private and public sectors. He served as Senior Food Technology advisor for USAID OMNI Project for three years. Since then he has contributed to several projects for the Micronutrient Initiative, Interamerican Development Bank, UNICEF, and the Pan-American Health Organization. Franklin Kramer, PE—Fremark Company Frank Kramer, a chemical engineer,

has dedicated his entire professional career to the food industry: thirty years with General Foods (now Kraft Foods) and many additional years with other large and small food companies, as well as teaching food process design for several years as an adjunct faculty member of Rutger’s Food Science Department. His many accomplishments during his corporate and consulting career are attributed to his ability to apply strong analytical and creative technical skills to successful commercial applications. Frank has worked on a wide spectrum of the food industry. His business assignments include work in various parts of the United States, Canada, Mexico, South America, Europe and the Middle East, providing a valuable cross section of technical, product, and business experience. He currently is president of the Fremark Company, consultants, specializing in process and equipment development and commercialization of new food products, Frank has bachelor’s and master’s degrees in Chemical Engineering, is a Fellow of the A.I.Ch.E. and a member of IFT, ACS, and Tau Beta Pi; has many publications including inventor on sixteen U.S. patents; and authored the section on coffee processing in the ‘97 edition of McGraw Hill’s Encyclopedia of Science and Technology. Michele Perchonok, PhD—National Space Biomedical Research Institute Dr. Per-

chonok received her BS in Chemistry from Brown University. She earned her master’s and PhD in Food Science with minors in Nutritional Biochemistry and Marketing from Cornell University. Dr. Perchonok’s initial product development experience was with The Quaker Oats Company in the Pet Food Division. After two years in that position, she was employed at Riviana Foods, Inc. Dr. Perchonok was responsible for the product development of rice mixes and other rice products for the food service, retail, international, and industrial markets. She also initiated shelf-life testing of raw ingredients and finished products and was responsible for nutritional and ingredient labeling. Michele Perchonok is active in the IFT. She has held the position of chair for the

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CONTRIBUTORS

Nominations and Elections Committee, Continuing Education Committee, and the Product Development Division. She also is a Councillor for the Texas Section. Catherine Side, MA, MSc, FIFST, AIB—Inside Consulting After graduating in Natural Sciences from Cambridge University in 1976, Catherine obtained a master’s degree in Brewing from Heriot-Watt University in Edinburgh and became Scotland’s first lady brewer. She then joined Biocon and served in a variety of positions, all associated with marketing of brewing and food ingredients, spending six years in North America. After a short spell as marketing director with a biotechnology company in England, she created Inside Consulting in 1991 and has enjoyed a successful career consulting in food ingredients, pharmaceuticals, and biotechnology. She has been an active member of IFT and its counterpart IFST (Institute of Food Science and Technology) in Britain (and has chaired committees for both) and has been IFT British Section Councilor. In 1994 she created and has since directed the Virtual Consulting Group, a successful network of over fifty bioscience consultants. She is also a member of Stratecon International Consultants. Richard Stier—Nathan Associates Richard Stier received a BS from Rutgers University in 1974 and an MS from the University of California at Davis in 1977. His first job was with the National Food Processors Association in their West Coast laboratory, where he eventually managed the microbiology section. Subsequent positions with Dole Processed Foods, a contract laboratory, and as an independent consultant have given him an opportunity to work all over the United States and the world. He has helped processors in North America, Central American, Africa, Asia, and Europe develop food safety, quality, and sanitation programs. His philosophy has been to emphasize the importance of these programs as part of operating a successful business, that is, these are not cost centers but cost savings centers. Stier has served in a number of positions with the IFT, including Councilor Representative to the Executive Committee. He has also worked closely with the IFT’s Continuing Education Committee helping to produce two CD-ROMs and participating in IFT’s programs the world over. Stier has contributed over one hundred articles to trade and refereed publications and serves as a contributing editor to Baking & Snack magazine.

FOREWORD

Food Product Development Based on Experience is the collective work of a team of seasoned food industry experts whose experiences and observations provide a how-to guide of successful product and process development. Many of the contributors are members of Stratecon International Consultants, who formed the core of the faculty for an Institute of Food Technologists’ short course in Product Development in 2000. That group again came together again in 2001 with a few additional individuals whose expertise complemented the Stratecon International Consultants network. Working with IFT’s Director of Education, Dean Duxbury, Charles Beck, and Herb Weinstein polled their associates for ideas and endeavored to determine if enough case study information could be made available to provide instruction based solely on a case study format. It was found that this was an insufficient basis for a course for two reasons. First, most of this data is proprietary, and releases are not easily obtained. Second, several of the associates felt that a cases-only approach might be too unstructured and simply provide a number of post holes. The consequence was a structured short course with emphasis on experience, a case study, and a variety of content including tangible examples. The examples were intended to provide the students with vicarious personal experience which would add interest to the course content and help students to limit their product development mistakes to situations which were not anticipated in this short course. Hence the presentations, which have been written up for this book, were originally developed for an IFT Basic Symposium, one of several training seminars offered by IFT prior to their annual meeting in July, 2001, in New Orleans. In the book, authors address the following key components of product development: • Managing the product development process. • Conducting consumer and market research. xi

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FOREWORD

• Making it happen. • Estimating cost and pricing. A case study and several short case history lessons illuminate product development from perspectives that include consumer and marketing needs, manufacturing ramifications, communication issues, food safety systems, shelf-life techniques, and distribution elements.

PREFACE

Years ago, in Woody Allen’s movie Annie Hall, he said, “A relationship is like a shark . . . it must keep moving forward or it sinks to the bottom and dies.” This analogy holds true for most businesses and aspects of those businesses. Companies who accept the status quo, refuse to innovate, or fail to change with the changing world, get left behind, lose market share, and may even cease to function. As an example, look at the United States steel industry. Following World War II, other nations invested in new plants and new technologies while U.S. manufacturers stayed with what they had. Guess who are the major players in steel today? The same holds true for the food industry. Food processors are under constant pressure to provide consumers with new and better products. Even established brands are tweaked on a regular basis to increase their continuing appeal. Look at H.J. Heinz’s recent work with ketchup. They have produced green and purple products targeted directly at children, even though they are already the market leaders. New product and process development is not, however, a commitment to be undertaken lightly. Successful new products do not spring fully grown from the brains of CEOs or marketing directors. They are usually the product of comprehensive market research, a planned product development program, and an organized marketing effort. Unfortunately, this common sense approach is not the road most followed. Food processors and others take short cuts, make decisions based on emotion rather than fact, or rush products to market without doing their homework, and this often results in failure. In point of fact, over 90 percent of the new products released into the market fail—and usually fail quickly. The objective of this book, and the Institute of Food Technologist’s short course that inspired the book, was to provide readers (and participants) with a road map for successful new product development. Of course, we cannot guarantee the success of each and every product that is released following the planned approach advocated by the authors, but we do believe xiii

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that the information provided will increase the chances of success. The programs described in this text are not just protocols based on theory, but on successful industry practices. The contributing authors have over 250 years of combined industry experience in product development, as well as related fields such as plant and production management, business development, food quality, and marketing. We believe that this text will be a valuable reference for everyone involved in the product development process, including those involved in concept development, product development, testing, and marketing. It is a text that we believe can be used across organizations to help people in many positions and departments to work more effectively and efficiently. Most importantly, following these guidelines will increase the probability that your new product will be successful. Catherine Side; Pangbourne, England; March 2002

ACKNOWLEDGEMENTS

Primary thanks go to all the individual authors for their time and dedication in preparing and giving the presentations at the IFT Basic Symposium in New Orleans in July 2001. They then rewrote the texts for this book promptly and worked hard with me during the editorial phase to ensure readability and consistency throughout. In particular I thank Charles Beck, who has led the Stratecon International Consultants from whom six of the presenters/authors are drawn (Charles Beck, Herbert Weinstein, Frank Kramer, Tom Heyhoe, Rick Stier, and Catherine Side). Without this infrastructure and years of networking, it would have been impossible to conceive and manage this project. Aaron Brody and Michele Perchonok provided their expertise in areas not covered by the Stratecon International Consultants group, and we thank them for their presentations and their excellent chapters in this book. IFT selected the basic symposium we offered, from a large number of potential offerings by other members and organizations. We thank IFT collectively for facilitating the presentation of the symposium, and Dean Duxbury, in particular, for ensuring that all the details and arrangements were correct. We also thank the delegates from the course for their input, questions, and comments, all of which have been reviewed and taken to heart. We collectively thank the companies, too numerous to mention, who have not only provided our lifelong experience of food product development but who also allowed us to use real-life examples of food products which have been developed. I thank friends and family for assisting with proofreading and encouraging me to complete the lengthy task of editing this book. I thank Rick Stier for the inspiration for the Preface.

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Food Product Development Based on Experience

1 Effective Communication Tom Heyhoe, Heyhoe & Associates

THE NEED FOR GOOD COMMUNICATION Estimates vary widely, but perhaps one in ten new product concepts survive the initial screening process. From there only one in ten will make it to market. The bad news continues because only one out of three new products on supermarket shelves survives more than twelve months. At the very start, getting key people in an organization to understand what a project is about, and what benefits it will bring, is critical to gaining support for its funding. It is here that being able to communicate well is vital. Later on when things go wrong, and they will, being a good communicator can make the difference between success and failure.

EXECUTIVE NEEDS In looking at how to communicate with an executive, or as an executive, it is necessary to understand what information an executive needs and wants. Also remember that what an executive needs and wants are not always exactly the same. 3

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Cynics would say that an executive’s demands for information are made to help fill in the executive’s day or to make subordinates’ lives more difficult. However, the answer is much simpler—executives need information to make decisions. Good decisions are what drives an organization forward. Information needs can be divided into two sections: initial and ongoing. Initial information needs focus on comprehending the project and deciding whether to fund it. Most organizations use a standard format for project presentation briefs. Typically these comprise a project description, strategic fit with the organization’s goals, time frame, cost, and benefits. The preparation and presentation of such a brief is often the joint responsibility of product development and marketing personnel. If this is the case, then it is vital that both work closely together and that each understands and respects the other’s thinking.

Initial Project Evaluation The first component of the brief, the product description, needs to be clear and concise. Too often product developers cannot suppress their enthusiasm for their project enough and include far too much detail. To combat this, many organizations set a limit on the length of the product description, say to one hundred words or a half a page. Whether such a limit is in place or not, it pays to keep the description short for two reasons. First, the longer and more complex the project description, the more likely it is that an assessor will tire of it or become confused. Where a number of projects are being considered at the same time, both reactions significantly lessen the chances of the particular project being selected. Second, the more detail that is included, the higher the likelihood that an assessor will find something to question or dislike. The second component, a strategic assessment, is sometimes neglected or, if submitted, uses a series of stock phrases that are almost meaningless—for example, “This will maintain the company’s preeminent position in the market.” A realistic strategic assessment is an essential part of a project brief. Many organizations have a standard format strategic assessment or product screening document. Most of these list a number of key factors and a score system for each. Table 1.1 depicts a simple format for such a document. Actual factors, values chosen, and weightings given will depend on the individual company. Organization size will particularly affect the dollar values set for capital expenditure and estimated profits. Of the other factors, technical feasibility is the one that needs to be estimated as accurately as possible. Many development projects use well-known technology, so technical feasibility can be confidently rated at or very near 100 percent. However, when substantial scientific research and untried technology is required, the product developer can be overoptimistic and allot a higher rating than deserved. This tendency needs to be guarded against. Finally, in using a screening document, most

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TABLE 1.1. Strategic screening document. Factor

Ranking

Score

Corporate fit (Company in this market or closely allied one)

1 (not in market) 2 (in but not dominant) 3 (dominate market)

Technical feasibility (Estimated chance of successful development)

1 (50–75%) 2 (75–90%) 3 ( 90%)

Exclusivity (Degree of protection of intellectual property)

1 (no protection) 2 (commercial secret) 3 (able to be patented)

Capital expenditure ($ million)

1 ( 3.0) 2 (1.0–3.0) 3 ( 1.0)

Estimated profits ($ million per year)

1 ( 5) 2 (5–50) 3 ( 50)

Expected life (Years)

1 ( 3) 2 (3–5) 3 ( 5)

Spin-off potential (Ability to launch additional varieties or related products)

1 (low) 2 (intermediate) 3 (high) Total

companies will insist that, even to be considered, a project must achieve at least a set minimum total score. Table 1.1 has seven factors with a maximum of three points each, giving a total of 21 points available. For it, the minimum score required for a project might be 16 points. The third component of the new product project brief, time frame, refers to the amount of time necessary to bring the product from concept to market. Most organizations have always wanted to get products to market at the earliest possible time. This means that the pressure put on product developers by management to shorten the development cycle can be extreme. Less experienced staff buckle under this pressure and accept totally unrealistic deadlines with two possible results. One is that deadlines are consistently missed and the product development group develops a reputation for unreliability. Obviously such a reputation can shorten one’s career with a company considerably. The second possibility is that essential development

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steps, such as accurate estimation of shelf stability, are omitted or not fully investigated. Sometimes such shortcuts do not cause problems. However, when they do, the problem can be a full-scale on-market disaster. Project time frames should always be realistic. One of the best guides is actual data from previous similar projects. The fourth component of the project brief is cost. Different organizations will have different requirements for what costs are covered and how these are broken down. Usually individual figures are given for staff (based on time and salary figures for each person involved), consumables (materials required for the project), external costs (specialist advice, product tests, and consumer research), and capital expenditure (for the product development process). The final component of the project brief is benefits. These should be concrete and should expand on material summarized in the strategic assessment document. Benefits to the organization in terms of effects on competitors and competitive activity are also important. Before moving to ongoing information needs, a reality check is necessary. It is a fact of life that many brilliantly documented and persuasively presented product development projects never get the go-ahead. There may be many reasons for this but the following two are worthy of mention. The first is that the executives reviewing project submissions have knowledge of specific company activities which will eliminate the need for the project. An example of such inside knowledge would be the proposed acquisition of a rival company with existing products in the category proposed. Secondly, the evaluation group may be seduced by another project which promises extremely high profits through the application of totally new high-level technology in a new market. This latter can be a real problem for an organization which finds itself operating outside its technical, marketing, or financial capabilities.

Ongoing Information Needs Once a product development project has been approved and is under way, it does not stop the need for a flow of information. On the contrary, communication becomes even more important. The corporate executive with ultimate responsibility for the project must be regularly updated on at least four key elements. These are progress against milestones, launch date viability, cost control, and external factors. Every project will or should have milestones, particular points at which certain goals have to be achieved. The executive responsible for the project will be reassured if these are being met. If the milestones are not met, then reassurance can be given by explaining what action is being taken to ensure that there will be no adverse impact on the project. Where milestones are not being met, the potential effect on launch date needs to be examined carefully. If there is a possibility that this will happen, the executive in charge should be alerted immediately. There are worse catastrophes for a

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company than not being able to put product on supermarket shelves at the promised time, but not many. Keeping costs within budget is also important. While minor overruns can be tolerated, substantial overspending needs to be highlighted. Reasons for this overspending, plus corrective action being undertaken, need to be spelled out. External factors such as increases in material prices which impinge on a product’s market viability need to be identified and communicated.

EXECUTIVE WANTS We have now identified what should be communicated at the project selection and ongoing development stages. However, before looking at the much harder process, communicating effectively, executive wants should be considered. As stated earlier, executive wants can be different from executive needs. Understanding this difference is part of the process of being able to communicate effectively. The cynic’s view is that executives only want to know what will keep them in their jobs. While the need for self-protection is part of the makeup of most sensible people, it is one of many possible wants. There are four other things which are important in understanding and identifying an executive’s wants: the background of the executive, the company, the nature of the project itself, and the culture to which the executive belongs. An executive with a strong scientific or engineering background will often want to explore the technical aspects of a project. Consequently, such a person will want detailed information on this aspect, but such information is unlikely to be of interest to someone with a marketing background. For some companies specific issues can be of much greater significance than those same issues are to other companies. One such sensitive issue might be the use of ingredients derived from gene technology. The nature of the project can also dictate what needs to be communicated. Consider, as an example, a project to develop an appropriate flavor-masking system for a pharmaceutical compound to treat a specific medical condition. The time frame for such a project could be lengthy because of the preparatory work necessary. Such work could involve initial flavor combination trials using a model system (pharmaceutical compounds are often intensely bitter) to represent the active compound rather than the active compound itself. Also necessary would be confirming that there was no chemical interaction between likely flavor combinations and any of the active and excipient materials present in the medication. It always pays to explain anything outside the norm in a product development project. Organizations are becoming much more global in their operations due to acquisitions, mergers, and expanding export sales efforts. Adding to this is the increasing tendency to search internationally for the best persons to fill senior positions and to post people to foreign countries. People take their culture

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with them and, to be able to communicate effectively, a product developer must try to understand what effect a different cultural background has on an executive or staff member’s wants. Here are some examples of what differences can be encountered when people from differing cultures interact. Time frame expectations are often different. In many countries the product development cycle is viewed as something which must be as short as possible. In other countries traditional organizations measure project time frames in years rather than months. Executives in such organizations can be uncomfortable with both short development time frames and the people who present them. Another cultural hang-up can be the difficulty some executives find in asking for more information as this would be seen to demonstrate a lack of understanding. One of the ways to handle this is to provide all available information initially. Yet another problem can be in dealing with staff who seem to lack initiative. In some cultures it is seen as disrespectful to act in advance of instructions from a superior.

HOW TO COMMUNICATE WELL Communicating well is not something that is only the gift of the few. It is something that can be achieved through understanding what needs to be communicated and what results need to be achieved from the communication. This must be coupled with a study of who is being communicated with and under what circumstances.

The Message For product development, the message is usually in one of two forms: a project brief requiring approval to proceed or a progress report. Obviously if there is a standard format used by the organization for either or both purposes, the format must be followed. However, special care should still be taken in preparing the documentation. It can be a serious error to assume that those being communicated with have extensive knowledge about the background leading to the submission or understand technical jargon. It is important that the message be clear to all. One way to go wrong is to include masses of supporting data. For example, in one organization the Operations Research Group was renowned for the size and complexity of its reports. The work was of high quality but much of it was never acted on because senior executives were not prepared to wade through the detail to clarify what was being proposed. When it was suggested to the person in charge of Operations Research that shorter, clearer reports would be of more value, the response was that all senior executives should undertake advanced courses in statistics so that they could understand what was being presented. The outcome of this was that the Operations Research Group was dis-

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banded and its functions folded back into the main research and development department. The lesson from this is that large documents are less likely to be considered because executives will not take the time to read them. In summary, messages should be clear, concise, conform to organizational requirements, and explain the reasons for any deviations from the norm. Additionally, they should clearly focus on what is wanted. For a project brief, the object is clearly to gain approval of and funding for the project. For progress reports where things are going well, the focus is only to reassure management that things are on track. Other communications—for example, advising of delays—may have a different purpose, usually to alert an executive to the problem and recommend appropriate corrective action.

The Audience If the audience is one person, such as one’s immediate superior, good communication is easier because it is one-on-one. In such a situation, it is important to study your superior and determine the preferred form of communication. Some people like frequent, informal verbal communication; others want written documents. Still others want visual communication such as bullet-point summaries or charts presented as overhead transparencies. Knowing how people like to be communicated with is the key to effective communication; however, one caution needs to be given. When verbal communication is the preferred method, it is always wise to back this up with a memorandum, e-mail, or fax which confirms the gist of what was said so there can be no uncertainty later on. As stated previously, an executive’s needs and wants must be taken into account and, again, cultural background can influence this. The following example will demonstrate the need for anticipation. A new, aseptically packed beverage product was being developed for an overseas client, and the draft package label was submitted for approval. Because the product was vitamin-enriched and going to a tropical country, the product development team thought it prudent to place a general caution against temperature abuse on the pack. The statement selected was along the lines of “Do not store for extended periods above 30°C (86°F).” This statement provoked a strong reaction from the client who wanted to know how long was an “extended period,” what exactly went wrong if the product was stored beyond this period, what happened if the storage temperature was greater than 30°C, and what was the effect on the product for shorter, hightemperature storage periods. The client was informed that the statement was purely precautionary and that the only likely effect was the partial loss of some of the vitamins. The client, of course, then wanted to know which vitamins were degraded and what was the amount of the loss. The reply to this was to identify those vitamins sensitive to heat and to cite literature references indicating the probable degree of loss in liquid systems. The client

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replied that this was not acceptable as it was not product-specific. The outcome of this was that special studies on vitamin loss had to be run and the cautionary statement reworded to keep the business. Besides the expense this entailed, the launch date had to be deferred. Communicating effectively with a number of people and gaining their support is more difficult. Again, if possible, try to learn about each individual’s background and use this to decide on the most appropriate form of communication to the group overall. Prior study will also be helpful in anticipating what each individual’s specific concerns and questions are likely to be so these can be prepared for. Three other situations should be considered at any meeting: avoiding getting sidetracked, coping with questions which are not able to be answered at the meeting, and providing backup or specialized documentation for those who want it. The first situation, avoiding being sidetracked, needs a cautious approach. It is important to be sure that it is a sidetrack and that the issue raised is only of interest to one or, at most, two people, neither of whom is the senior executive present. If this is the case, then a tactful response such as, “That is an important but complex issue. Could I go through it with you directly after the meeting?” often works. If the answer to a question raised at a meeting is not known at the time, then it is far better to admit this and arrange to provide the answer by a set time in the immediate future. Trying to bluff can be fatal. The easiest way to cope with requests for specialized information, such as detailed specifications for proposed capital equipment, is to bring enough copies for everybody to the meeting. When one person makes the request, it can be instantly responded to and the rest of the meeting participants can be offered copies at the same time. Alternatively, it can be helpful to one’s cause if a copy of any specialized information is provided to someone who will be attending and who is known to have an interest in that area. This can be sent out a week before the meeting under cover of an informal note such as “I thought you might be interested in looking over the kind of equipment that will needed for the project.” It is at the meetings that someone will raise a question, so it looks (and is) good if a senior executive jumps in and says that they personally have looked over the aspect that is being questioned and are very satisfied with the approach.

MONITORING AND TERMINATING PROJECTS Getting a project approved is important, but delivering the goods is paramount. Sometimes things just don’t work out, and a project has to be terminated. Understanding what and how to monitor is necessary to provide timely, accurate progress reports and special alerts. Knowing when and how to terminate a product development project is essential.

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Project Monitoring There are five essential elements in monitoring project progress. These are developing and applying measurable goals, assessing progress at regular intervals, closely tracking expenditure, keeping a sharp eye on outside suppliers, and being alert to the potential impact of external developments. The real progress of any project can only be measured against specific goals or milestones. It is important that these be set with the full knowledge and agreement of all involved personnel. Project progress must be assessed at predetermined, regular intervals. Often the period assessments are shortened as the completion date is approached. One common way is at intervals of every two weeks for the first two-thirds of the project and from then on at weekly intervals. If this is not done, then things can go seriously wrong. In one extreme case, a joint government-industry horticultural project was set up with investment over three years of the order of five million dollars, but when the official deadline for project completion passed, it first appeared that nothing of value had come from the project and that at least one key condition for funding had not been met. An investigation showed that the key condition had been varied for very sensible reasons and that, in fact, the project aims had been more than satisfied. The prime reason for the confusion was that the project steering committee had met only once, at the start of the project, and that none of the proposed review meetings scheduled for every three months had taken place. Too many projects run over budget and this is mostly because either the initial budget for the project was set too low (to improve its chances of approval) or not enough control was kept over expenditure. It is vital to review project expenses frequently and ensure that such a review covers not only payments to suppliers but purchase orders raised with them. Outside suppliers can be a particular problem and need to closely watched. It is important that they understand that they should set realistic time frames for delivery of goods and services and that they immediately advise of any possible delays. External developments not only can affect a project’s time frame but also can derail the project completely. Developments to be alert for include competitor activity, regulatory change, and emerging issues. Regulatory issues such as changes in labeling regulations or import access conditions crop up regularly. Issues such as the occurrence of BSE (Bovine Spongiform Encephalopathy) can make projects totally inviable. Five rules for keeping projects on track and within budget are as follows: • Don’t allow late reporting • Don’t allow underreporting • Control expenditure

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• Investigate problems • Reallocate resources as necessary to solve problems

Project Termination Sometimes projects need to be terminated. Reasons for termination include cost and time overruns, the new market being entered by one or more major competitors, technical unfeasibility and unavailability, or very large increases in the price of key raw materials. Terminating a project can be very hard because people get emotionally tied to their projects and closure affects them deeply. However, the consequences of not terminating a project can be even more severe. One case was the development of a new baked product. The product concept was excellent, but developing the manufacturing process proved to be far more difficult than was first thought. The development team refused to give in and ran in excess of two hundred factory trials before senior management terminated the project. Each factory trial cost approximately ten thousand dollars, so expenditure in this area alone was of the order of two million dollars. This was much more than the profit the product would have returned in its fastchanging market. Further, the time taken up by the project could have been much more usefully employed on projects with a greater chance of success. If a project should be terminated, then it is much better to do it earlier rather than later. Staff need to be given reasons for the termination and should be told in an empathetic way. It is also vital to learn from the reasons for termination and to share that learning so any mistakes are not repeated.

SUMMARY Communication with and by executives about product development projects will be effective if these guidelines are followed: • Project briefs are properly prepared and closely follow set organizational standards • People’s needs and wants are known and satisfied • The forms of communication take into account the backgrounds of those being communicated with • Reporting is regular and accurate • Bad news is communicated promptly with the appropriate corrective action spelled out

2 Focusing on the Participants: When and How to Involve Them Herbert Weinstein, PhD, Weinstein Consulting International

INTRODUCTION For most readers, it will be clear that “product development” is a team effort. Throughout this book, that principle is taken for granted. Therefore, a basic function of operation is that in the development of strategies and activities, the development team is already formed. When and how to involve the members of the team, as well as who those members should be or represent, will be the subject of this chapter.

PRINCIPLE Any food product development program and process should be an element of the marketing strategies of the company. These programs have to fit the organization’s goals and objectives. This concept becomes elusive if and when the product development effort is driven by one ideal and not a group effort. A single individual or group within an organization can very easily focus the efforts in a misguided direction if that individual works in isolation from the organization and its goals. 13

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PROCESS As stated before, the initial step in product development is generating the idea, or product concept, which will be the basis for the product development effort. In this case, the first objective to verify: Is our product concept or idea, prototype, or even a competitor’s product—if being considered—in accordance with the corporate goals and objectives? Normally the easiest way of verifying that the concept falls within the corporate objectives is confirming what those goals and objectives are. This is easier said than done. Experience indicates that many corporations, especially those of medium and small size, do not have clearly expressed goals and objectives. This is true particularly in the areas of product development. It is very simple to find a product that fits in a category, which in certain ways is similar to those the corporation covers, and thus, in the minds of some employees, within the company’s objectives. How many times have we read that the objective of the company is “Consumer Satisfaction”? This does not express or even imply with what kind of products or services the customer should be satisfied. After the company’s goals and objectives have been agreed upon, specifically in the area of products or services, the product development effort can start. As mentioned earlier, this step is not easy and not the scope of this chapter, but it is mentioned as a reminder of a basic principle that has to be defined to improve the success rate of any food product development program.

COMPLYING WITH CORPORATE GOALS AND OBJECTIVES The following questions require answers: • • • •

Are we developing in a vacuum? Are we following the corporate portfolio? Do we have upper management support? Do product objectives mesh with others—individuals, departments, and divisions—in the organization? • Is there internal competition for resources, time, and attention? • Do we have the product development resources to give an adequate level of effort to the process? With these and other questions, which can be personalized for each company or corporation, a decision tree can be constructed. This usually takes place in the initial steps of the process. In those organizations where the marketing function and the development function (in any shape or form) exist, this decision tree is defined by their mutual efforts. In many instances,

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input from other company areas is needed; for example, the financial group should answer monetary resource questions. At this point the team core has been defined and the team is on its way. Analyzing consumers is our second objective and major concern. We have to understand how the product idea or concept fits with them: • Are we creating a need? • Are we fulfilling a need? These two questions are important because the product development program is defined by the answer. The answers to these questions are dealt with in other chapters of this book. The product definition comes next as it is analyzed by the screening effort. Is the product: Innovative? Adaptive? Imitative? Line extension? New form? It will be assumed in this discussion that the team has already been formally constituted. The marketing and technical representatives have already been participating in the preliminary assessments mentioned above; thus they are the core of the team. It is possible that more members of these two functions can be called to integrate the group. Also, since the beginning, the team should have had representatives of operations (manufacturing, logistics, and purchasing). Generally at this stage finance and operations will be represented by a senior executive as a guiding voice representing his/her function. As the work of the team progresses into a more detailed definition of the product within the development process, other members of these functions, those more intimately associated with the operative steps, are required to contribute. For example, when production facilities to be used for manufacturing the new product are being discussed, the managers of any or all plants should be involved.

MANUFACTURING AND PACKAGING These are the questions that have to be answered: • Can we produce in existing installations? • Will we need new facilities? • What are the capital needs?

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(In answering this question, it is important to look at the overall corporate considerations and needs. Is the possible capital expenditure needed for this new project in keeping with the corporate priorities and, therefore, financial capabilities?) • Do we have to invent the manufacturing process? (If so, what does this mean in time, effort, and use of the resources?) • Is “our product” competing with other corporate projects/new products? • Are the required raw and packaging materials available? • Are other operational and operative considerations peculiar to the project available?

COSTS AND PRICING Costs and pricing are paramount in the competitive effort. A proper definition and up-to-date cost and availability of the following items (and possibly others) are needed for the decision making process: • • • • • • •

Raw and packaging materials Manufacturing costs Distribution costs Sales and marketing costs Depreciation Financial Taxes

All are essential and, at this time of the development process, should be considered. The information gathered and derived will allow the team to make an initial assessment of the competitive position of the proposed product; then the decision of how to proceed has an increased likelihood of being correct. It is evident that the total team involvement is now routine throughout the development process and that the following questions must continue to be answered positively as the product moves towards launch: • • • •

Are we confident of our costs? Can we correctly price our product? Is the pricing competitive? Does the product have a pricing competitive edge?

Team members with specialized experience and knowledge should now be the principal individuals responsible for obtaining the information and responding to the questions.

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MARKETING Marketing needs to answer the following questions: Current status—How advanced are the marketing plans and how accurate is their information? Market size—Who, when, and where are we targeting? (Do we know the demographics and location of our targets?) Lifestyles—Does our product fit? Growth rate—What is it? (The future market size depends on this.) Market share objectives reality check—Are we too optimistic? (Verify using as many different parameters as possible.) Volume—Can we handle it? (Has the team received the assurance from an operative at plant level? Go to the source; do not depend only on the VP.) Competitors—What can we expect? (What will be their reaction? What are their strengths and weaknesses?) Planning—Have we planned advertising, promotion, and branding? Testing—Is the testing done, do we have reliable results that can be confirmed by other means? If so, how do they stand up? Investment—Is the investment sound? (Is the corporation interested and willing to capitalize the project?) Distribution—Should we go with our own or contract with a third party? Cost—Is it the optimum? Is it suitable for the market? Any surprises in the offing? Sales—Can they cover the expected market share and/or sales coverage/ volume expectations? Sales force—Is it sufficient or do we need to increase personnel, temporarily or permanently? Rollout schedule—How realistic is it? Is the team happy and confident with it? Store allocations/shelving costs—Have they been considered? Are they reasonable and can the corporation live with them? Do they allow us to be competitive and expect reasonable returns? The development team is now a complete unit, an entity that is the parent of a new product. As we know, very often wishful thinking and other expectations blind the reality of a position or a judgment.

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PRODUCT DEFINITION The product is now defined by the following: • • • • • • • • • •

Consumer requirements Operational needs Product delivery requirements Uses and impact on the environment Service and maintenance requirements Business objectives such as cost targets and competitive analysis Manufacturing constraints and available or new installations Distribution system and needs Sales, advertising, and promotional support Government controls (such as product safety, regulatory issues, and nutritional labeling) • Package tamper-resistance evidence • Generally recognized as safe (GRAS) ingredients

EXTERNAL EVALUATION It is time for an external authority, somebody outside the team, to assess and evaluate the decisions made by the team. This is a valuable way of checking what the team believes to be the most critical characteristics, conditions, or issues of the project. If the project is sound, then the auditor will confirm the team’s evaluation and demonstrate that decisions were appropriate.

SUMMARY This chapter has shown that the food product development process is a systematic integration of many diverse disciplines. We have learned that to be successful, the project requires: • • • • •

Appropriate organization and top management support. Use of a disciplined development process. A team that is willing to outsource and partner. Activities that flow from business units. Market opportunities fitting with core strategies.

We have also learned that to understand the internal and external competitive environment, we need to:

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• • • • • • • •

Know the consumers, their needs and wants Keep the process in line with a variety of ideas Have a clear and focused product definition, from the beginning Have a superior and differentiated product and package Make use of research to assess and confirm consumer reactions Align manufacturing and retailing, focusing on the consumer Execute the product launch well Adapt, grow, and improve as market and competitive conditions evolve • Listen to feedback The only way for a product development process to be successful is to build and work with the team that has been associated with the project from the beginning. While recognition should be given to whoever had the original concept, it is the multifunctional team that attains success.

3 Managing the Product Development Process Frank Kramer, Fremark Company

INTRODUCTION After project objectives are defined and appropriate administrators, technical people and teams have been selected, continuing the project in a wellorganized manner is essential. This will ensure that it moves toward its goals in a timely and cost-effective way. It is equally important that the project not be overly organized, which might limit the use of the technical know-how and creative skills of the people involved. Two causes of inefficiency in conducting development projects are duplicity of work and constant iteration—recycling of project activities. Welldocumented and recognized assignments and frequent reporting can prevent duplicity. Communication, by use of Gantt or PERT charts, is very helpful in dealing with both problems. The charts show the timetable for each project activity, when the activity should be complete, and who is responsible for the activity. Some iteration is always necessary but should be reduced to a minimum. It is particularly costly, for example, if the iteration calls for going back to 21

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the laboratory to conduct additional tests after reaching the plant development stage. This often occurs because there was no thought as to what process and/or equipment would be required beyond the laboratory stage. The way to avoid this problem is to envisage the commercial plant process, almost from the start of the project. In fact, many companies develop the product and process at the same time to add product attributes only available by using certain equipment. An example is the production of a pound cake. The very fine gas bubbles that characterize a high-quality pound cake are best generated in a plant-scale Oakes-type beater. This chapter will discuss how a new product is developed using the threestage development ladder, what Gantt and PERT charts are, how to prepare these charts using available computer software, and what the advantages/ disadvantages of each are to product development. An example will illustrate how a new process was developed by effectively going through the complete development process. This example was accomplished by a small technical team in a relatively short time and with a minimum investment.

PRODUCT DEVELOPMENT LADDER As the product idea works its way from concept to the marketplace, it goes through three development stages (sometimes four). These are as follows:

Benchtop Produce concept samples for preliminary evaluation of quality, consumer appeal, benefits/risks, and cost. Provide database. Develop concept for the process and equipment.

Pilot Plant Prepare first scaled-up process to produce product as defined by most promising product concept. Prepare enough sample product to run significant consumer tests. Modify promising product to adapt to required changes in the product definition from consumer studies and economics. Using appropriate instrumentation, establish plant design, cost data, and control strategy.

Commercial Plant These are built based on pilot plant data and turned over to the Operations department after appropriate personnel training.

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Some complex high-risk projects, or those needing market test product acceptance confirmation, go to a semi-works-scale plant prior to the construction of the commercial plant. This is an extra step, which can be very costly and lengthy, so avoid it if possible.

Gantt and PERT Charts Gantt charts are essentially horizontal bar charts with Time/Date as the horizontal (x) axis and Activities listed on the vertical (y) axis. Each bar segment represents an activity. It begins at the scheduled start date and finishes at the planned end date. Each activity is labeled with the responsible person and the preceding activity, if any, which was required for it to start. The Gantt chart can show a Critical Path—the activities crucial for on-time project completion if set up on some of the available software. PERT charts determine the Critical Path. It is essential in this type of chart to specify the necessary preceding activities and those which are somewhat independent of time. Also important is specifying the amount of cushion time available for each activity as well as the scheduled project completion date. Each activity box contains the status information. Though there are many software programs for developing Gantt and PERT charts, the one generally considered the best is MicrosoftProject. It is easy to follow and after being programmed with the appropriate information, various charts can be produced by simply clicking on well-marked buttons. The newest Gantt chart program now has green, yellow, and red lights to accompany each activity, pointing out the time status at a glance.

Example: Continuous Boston Baked Bean Oven Development A new process was required for producing traditional, New England-style Boston baked beans. The traditional Boston baked beans (BBB) were made by baking the beans for twelve to sixteen hours in a baking oven with rewatering every few hours. The process required removal of the small bean pots from the oven and returning them after refilling with water. Another interesting BBB issue was using “Brick Oven Baked” as an advertising claim. The national brand beans, such as Campbell’s, were and are produced by a simpler boiling process. A new process was required to replace the old labor-intensive process which used long-outdated water-tube ovens, heated by vaporized kerosene. It was desirable to install a modern, continuous oven with automatic material handling and to avoid the labor required for handling the many pots involved. Without pot handling, possibilities for product contamination and unsafe personnel conditions could be eliminated. The company also wanted the new equipment to be simple to operate, to provide consistent good quality, and to be easy to clean.

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Development Planning Considerations Considerations in planning this development were as follows: 1. The company was small and had limited technical resources. The operators were mostly unskilled people unfamiliar with automation and instrumentation. 2. It was critical to learn how to reduce the baking time to less than four hours to be able to design a reasonably sized oven. 3. Because of the complex chemistry of foods in general and this product in particular, the most rapid way of making changes was modification of physical variables, such as temperature, rather than introducing major formula changes. 4. It was important to use a continuous baking oven with the pots fixed to the oven chain belts rather than having pots which were controlled by the operators that involved many steps: placing pots on the oven belt and then removing, emptying, cleaning, and replacing them by hand. Rectangular-shaped pots linked to the oven chain belts were chosen to replace the hearth belt normally used in baking ovens. The rectangular pots would have the same depth and front-to-back width as the old round pots, minimizing the effect of the shape change. 5. The company wanted the oven and auxiliary equipment to be built by a well-known baking oven manufacturer to avoid reinventing the wheel. The company was expert at making BBB, not at making baking ovens. Universal Oven Company was identified as the supplier. Planned Activities for Gantt and PERT Charts The software asks the user for information to construct the charts: 1. 2. 3. 4. 5.

Project expected Start and Finish dates. Time scale (days, five- or seven-day weeks, months). Activity list with Start and Finish date for each. Required preceding activity, if any. Responsible person for that activity.

In the charts illustrated, the listed activities for this project were these (milestones indicated in bold): Start Resource selection Benchtop process study Design and install pilot plant Pilot plant studies

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Concept confirmation Product consumer tests Plant design data Management approval to build plant Equipment ordered and delivered Building modifications complete Equipment installed and tested Process start-op and operator training Finish—Product in marketplace The 1-ft.  1-ft.  12-ft. (approx 30-cm  30-cm  360-cm) rectangular pot was designed to minimize changes in the pot geometry, gain more capacity, and form a uniform belt, which made it easy to load ingredients without materials falling between the pots. This effect was enhanced by adding a no-drip lip to cover the small spaces between the pots, and the lips acted as pouring spouts at the discharge end. The pilot plant pots were simply 3-ft. (90 cm) versions of the future plant pots. After achieving excellent quality BBB from the 3-ft. pilot, it was decided that the 12-ft. pots would be partitioned, forming four 3-ft. pots. This reduced scale-up risks, the most significant of which was potential nonlinear mixing. The old process was labor-intensive and slow. It used hundreds of 1-ft diameter cylindrical pots which resembled normal kitchen pots without handles. After the pots were manually filled with beans and premade sauce, they were placed in one of approximately nine ovens. The ovens were made of firebrick and heated by pressurized water tubes, in turn heated to very high tempera-

FIG. 3.1 Pots used in oven development.

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FIG. 3.2 Old baked bean process. tures by burning vaporized kerosene. Approximately every three to four hours, the pots were removed from the oven and refilled with water to make up for the water that had boiled off. The whole process took about sixteen hours. New Continuous Oven The continuous oven design was based on five basic ideas: 1. Replacing the normal bake oven hearth belt with the 12-ft. pots and the no-drip lip, described previously. 2. Rewatering at unheated positions in the oven. 3. Pouring cooked BBB into a discharge screw conveyor without spilling material onto the preceding dumped pot. 4. Timing the discharge conveyor so the complete flight-movement time equals one pot-dump time. This should give a uniform solidsauce mix into each flight. 5. Automating timers and feeders to enable operation of the entire oven process by just one operator. The issue of the “Brick Oven Baked” advertising claim was resolved by using a brick facing in place of the normal stainless steel side cover normally used on modern ovens. Based on this, lawyers confirmed that the company could continue to use this slogan. Gantt Chart Projected for Oven Development Project The chart (Figure 3.4) shows the activities numbered from 1 to 14, with the estimated number of weeks required for the completion of each one and sequenced depending on any necessary preceding activities. The time scale

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FIG. 3.3 New continuous oven. was based on weeks with no special allowance for weekends. The Microsoft Project program asks for the expected project completion date. The Activity Bars shown in red indicate that these activities must be completed as soon as possible to meet the target completion date; these are Critical Path activities. Note the Milestone activities, numbers 1, 8, and 14. Figure 3.5 shows the same information as a PERT chart. The Microsoft Project program provides the option of preparing a Gantt or PERT chart by simply clicking the appropriate button on the menu. The PERT version of the same data shown on Figure 3.4 is plotted by the program on this PERT chart (Figure 3.5). The Critical Path is shown in redoutlined activity boxes for the same activities designated by the Gantt chart. (Note that these charts were prepared to demonstrate the program used in the 1970 development as if it started on January 3, 2000, and was to be completed July 6, 2001.) Choice of Gantt or PERT Charts The Gantt chart method is the most commonly used project control system. It is easy to use, shows the status in an easy visual format, shows who is responsible for each activity, and can show the Critical Path. The PERT chart is a dedicated tool for identifying the Critical Path and is especially useful for complex projects involving many activities and many people. It has the disadvantage of being difficult to interpret without careful study.

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FIG. 3.4 Gantt chart (Microsoft Project). One of the many advantages of using a software program, such as Microsoft Project, is that projects are constructed on a computer and can be transmitted almost instantly to the entire project team both at the beginning and as the various activities come into focus later. Charting provides an al-

FIG. 3.5 PERT chart (Microsoft Project).

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most instant reporting tool, particularly for organizations that maintain internal networks or use the Internet for interoffice reporting.

SUMMARY The value of conducting development work following the three-stage development ladder was pointed out and demonstrated with a new unique process successfully developed by a small company. The advantage of starting process development at almost the same time as a new product development was emphasized. Gantt and PERT charts were defined and demonstrated as reporting tools which save time and money. Sample charts of each type were illustrated with the suggestion that for most projects, the Gantt chart was the easiest and best. Software such as Microsoft Project is available at a reasonable cost, providing user-friendly programs to prepare Gantt and PERT charts.

4 Organizing Human Resources: By Project? By Discipline? As a Matrix? Charles Beck, Stratecon

INTRODUCTION Whether you manage a food product development function or not, you are asked to put yourself in that role as you read this chapter. How should your effort be organized? Under what circumstances does the organization make much difference? If the function is composed of competent people, isn’t that enough? It turns out that no matter what you do or don’t do as a manager, the product development function will take on some structure. You may as well choose that structure consciously. This chapter is intended to provide you with an awareness of the optional structures which have been employed by others and with some indications of their strengths and weaknesses relative to your specific circumstances (size, culture, continuity, and complexity). The performance of any group of people is determined by each member having these characteristics: 31

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Competence toward the task. Freedom to act and speak. Ability to interact with others in the group and external to the group. Access to communications relevant to their function. Access to the resources needed to execute the assigned task. Comfort and self-confidence within the corporate culture. Happiness as a human being. Organizing a department in a company, large or small, has at its core, the fundamental goal of maximizing the performance of individuals. Only then do you maximize the performance of the department or the company.

Role Definitions During the first half of the 1970s, I managed a food research department for G.D. Searle Biochemics. We had responsibility for food enzymes, Searle’s emerging sweetener (aspartame), and for research into new food ingredient areas and special dietary foods. The department was of intermediate size with four Ph.D.s and a total of around seventeen people. The group was functionally divided into a process team, a sensory evaluation function, a nutrition/ special dietary function, an enzyme applications function, and formulators who put together products as needed, mostly involving aspartame. There were two professional formulators with technicians, and my efforts to have those two competent people work together resulted in months of chaos, bickering, and frustration for all concerned. Eventually, I assigned one of them to work on sweeteners while the other formulated for all other programs. It was like the parting of the Red Sea; each of these European-born food scientists now had his own turf and peace returned to the laboratory. I don’t know if the problem was independence, personal recognition, or something else. I do know that after we reorganized, the relationship between the two people returned to mutual respect, and all of our lives improved.

Perspective When I’ve attended industry or management conferences and listened to executives and managers speak in glowing terms about their new organizational structure, I’ve wondered what the worker bees would say about how they’ve been organized. Years ago, I interviewed for a position in a Canadian government laboratory. The director of the laboratory spoke to me for well over an hour, mostly about the matrix structure he had introduced to the group. Then one of his subordinates escorted me to the different laboratories and offices of the group. When any of the employees was alone with me they whispered warning messages that the organizational structure had made their lives hell. I don’t know if the problem was a misappli-

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cation of a structure, poor preparation for transition, or a really out-oftouch manager, but I did know I didn’t need a job that badly. Again, the point of all of this is that we need to remember to choose an organizational structure which maximizes individual performance for the people who do the work.

FUNCTIONS OF ANY ORGANIZATION To decide what structure we wish to apply to the product development department, we need to look first at our department as an organization. All organizations, companies or departments, have certain internal and external obligatory functions. Internally any organization must have a mission, a goal or purpose, a culture or rules of internal behavior, and the leadership to carry out the mission within the culture. Externally any organization must produce a product or service; satisfy a customer base; comply with government, regulatory, legal, and ethical requirements; and have an income which exceeds it outflow. This is fairly basic and, even though you won’t find many relevant references to product development, information in business school literature which features the organization as a whole company, large or small, is available. If we continue to view a generic organization as a model for the product development function, then we can look at the organization in relation to its stakeholders. Figure 4.1 shows an organization comprised of employees (note that I put them first) and management, which deals with suppliers, customers, investors (for example, parent company or shareholders), and outside influences (regulators, governments, and local community). We can also look at a typical organization in relation to its disciplines. Generic functions are management and its staff support, operations related groups, customer focused groups, technical functions and administrative support. Figure 4.2 shows a typical organization chart based upon disciplines. Clearly this is a company structure and the reason it is important here is that the product development function must ultimately deal with nearly all of these departments to carry out its duties. When you start connecting those disciplines which must communicate, the organizational chart starts to look like a spaghetti factory. Figure 4.3 illustrates the dynamics of departmental interactions, and now we begin to see that the way we organize the corporation (or department) may have a bearing on individual performance.

Efficient to an Extreme Thinking again in terms of individual performance, what is the most efficient organizational structure a business entity can adopt? I personally have chosen this structure for my own activities, but that was simply because I don’t have a cadre of employees. A sole proprietorship has a

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FIG. 4.1. Organization stakeholders.

FIG. 4.2. Organizational disciplines.

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FIG. 4.3. Interorganizational communications. number of limitations, but it is highly efficient. All communications are conducted with perfect transmission because they occur in the sole proprietor’s brain. There is no need for a personnel department: decisions are all unanimous (regardless of accuracy), and policies can be highly flexible and adapted to employee needs. However, sole proprietors have two severe limitations. The sole proprietor must know something about all of the disciplines which he or she represents on the organizational chart, and the size of the business cannot grow any larger than one, which the sole proprietor can personally manage by his or her range of skills, and by the use of up to 80 hours per week. Sole proprietors can extend their range of skills by creating a virtual organization in which lawyers, accountants, brokers, contract manufacturers, service laboratories, and others are contracted to fill the gaps. Now, however, the beauty of single brain communication is lost and your virtual company is composed of people who are not under the cultural umbrella of a true company: they are not family. Furthermore, these services, for a moderate-sized company may be uncompetitive when compared with an employee-based operation of the same size. Thus, the lesson is fairly clear: unless you’re happy to have a small business which one person can manage, you must understand how to organize the employees which you need to hire.

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FOCUS ON PRODUCT DEVELOPMENT So much for generic organizations; our goal now is to return to the core of our topic: the product development department. By analogy we must apply the same considerations. What functions must be carried out? Who are the stakeholders? What disciplines must be organized? Finally, what organizational structures are available?

Product Development Functions There are many functions inherent in conducting product development. They range from contributing to the target concept, to prototype development and refinement, to pilot scale and reformulation, and ultimately to aiding production and servicing the product after launch.

• Participate in the concept development process, if invited. • Analyze the target concept and translate it into prototypes for screening. • Refine successful prototypes for commercial considerations: – Ingredients, food safety, manufacturing, labeling, distribution, packaging, and cost • Screen again internally. • Further refine and run pilot test quantities for: – Consumer tests, storage stability, manufacturing information • Coordinate production scale (or copacker). • Continue to service the product line with quality improvements, cost reductions, and line extensions.

Origin of Concepts It is interesting to reflect on how the new product concepts evolve. Though it would seem logical to suppose that product development is always, or usually, a participant in concept development, that doesn’t always happen. Sometimes the marketing department just seems to show up with a product development request which could have been motivated by competitors, customers, the sales force, or Time magazine. Other concept development efforts are interdepartmental and strategic. The reality is that ideas can, and do, come from a broad range of sources. This was a topic in an IFT (Insti-

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tute of Food Technologists) Product Development Short Course given in Dallas, Texas, during the Annual Meeting in 2000. At that time I prepared an octagonal schematic showing internal and external sources of new product concepts. It is reproduced here as Figure 4.4. A Sara Lee Team In the late 1970s I worked as Manager of Advanced Technological Research for Kitchens of Sara Lee. Our job was twofold: to find and apply technologies to support the existing business and to find technologies which showed potential as the platforms from which new products could be launched. The unusual and interesting organizational aspect of this unit is that we were directly linked to the new products’ function in the

FIG. 4.4. Sources of product concepts.

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marketing arm of the company. We were not on a completely equal footing with our marketing counterparts, but we were unquestionably partners. In the thirty-four years since I was in graduate school, I have not met others who had been organized in this fashion, and it was, in retrospect, probably the best new product structure I have experienced. Who Is Responsible for Product Development? If you ask the product development department, they will obviously say product development is their responsibility. Marketing would probably beg to differ by pointing out that product development technicians (in the professional sense) are essential to fill the market gaps which their consumer analysis uncovers. The general management people may even take time to point out that their overview of the business environment is critical to anticipate when lines need invigoration or overhaul. Financial analysts also see themselves in a contributory role relative to the needs of a product line. In truth everyone should have a voice and contribute the insights which they bring to the questions of what, when, and why regarding product development. In reality marketing normally has control and involves others at its discretion.

Product Development Stakeholders In an ideal world (as viewed from the product development function) all relevant disciplines would be active participants right from the concept development stage. This rarely happens, but delayed participants should still be on distribution lists for product development communiqués. During the exploratory stage, essential disciplines include marketing, research and development (the home of product development), quality assurance, packaging, purchasing, and engineering. I chose the research and development department here because there may be research findings which can be applied to the product development effort to provide a proprietary position or just to move the project along faster. Quality assurance, packaging, purchasing, and engineering each have special knowledge and sources of knowledge which can be critical to a project. Quality assurance may point out that the chilled food under consideration will have extremely tight microbial specifications, because of limitations in distribution and handling. Packaging can often be the critical visual and convenience element to consumer trials, and yet delivery of equipment and printed packages often have the longest lead times. Purchasing may be aware of ingredient shortages or need to find specialized sources of ingredients which then might require time-consuming work to become authorized under company standards. Engineering has to figure out how the new product will be manufactured internally (proper equipment and available capacity), or via a contract manufacturer who will need to pass authorization (and negotiation).

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After the exploratory group approves a prototype, the second-stage stakeholders will need to become active unless they have already joined in because of the communications they have read. This will usually include sales, manufacturing, distribution, finance, law, and human resources (if additional staffing is anticipated).

CRITERIA FOR ORGANIZATIONAL STRUCTURE Recalling that, in this chapter, you are the Director of Product Development, what must you know and consider to determine a preferred structure for your department? The key factors in my view are size, corporate culture, continuity of the business paradigm, and complexity (the degree of need for cross-disciplinary integration). Note that Richard L. Daft in his 1995 book, Organizational Theory & Design, (an excellent source of well-documented information on organizational theory) chooses: size, goals/strategy, environment, and technology. He also mentions with less emphasis: leadership, culture, and values (human processes). Note also that when choosing an organization structure for your product development department, one size does not fit all. More than one structure may work for you, but others may not work at all.

Size In a very small company, the single technical employee who carries out research and development, quality assurance, and some process engineering, may be like a sole proprietor. No matter how you organize this person, the communications between little gray cells are still in the same brain. Furthermore, the depth and range of applied skills are limited to this one employee or the external resources, which can be supplemental. In a large company with many diverse technical people, the technical director can (as a military general) deploy the troops in various ways.

Corporate Culture Corporate culture is hard to define: it describes the way people behave within a company and every company will have its idiosyncrasies. Chain of command might be one factor of culture. In one company, for example, employees may only speak openly to direct reports while mostly saying “Yes, sir” to their superiors. In others, a lack of challenge by subordinates would be seen as noncontributory. In some companies, a superior takes responsibility for subordinates’ work and looks out for them as departmental family. In other situations, each employee is personally accountable for what they produce, and interim interference and confrontation are avoided. For many years, Pillsbury had a culture in research and development which, on one hand, pushed all researchers towards research management

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(and marketing interaction) and, on the other, rewarded technical achievements through technical audits and placing bronze plaques of patents in the research building lobby. In some companies, such as 3M, corporate culture has traditionally rewarded risk-taking by those who carry and attempt to carry new businesses from concept to reality. If ventures were reasonably well managed, then the entrepreneurial employees whose ventures failed, were given another opportunity. An individual could get three chances to be successful. Many other corporations refuse to acknowledge failure. Nobody involved in a failed project will acknowledge participation because those who led failures are often fired. The intriguing feature of this is that when you study the careers of greatly successful people, they have often emerged from failures which taught them very important life lessons. Historically, Procter & Gamble were students of their own successes and failures. If a project failed, they wanted to know why. Did the concept prove false or was the execution inadequate? Pringles™ is an example of a brilliant concept to bypass store-door delivery and at first it failed. Following analysis, the company restaged the product twice. Today Pringles™ is still on the shelf with a share of the chip market. For years, Americans have struggled with the corporate culture differences between many Japanese businessmen and themselves. These involve the time to close a deal for these reasons: • The Japanese often want to understand personally the managers of the prospective partner and know that they will be long-term partners. • They prefer to work out a great number of details that Americans assume they can handle after the deal is signed. These examples are each manifestations of a corporate culture that is not usually documented or codified by the company. Nonetheless these style factors cannot be successfully violated. A wise employee will learn and understand his or her environment.

Continuity of Business Paradigm How well do you really know, from a product development perspective, what business you are in? The people who make Bush’s canned beans will answer this more easily than will those at Del Monte’s canned fruits and vegetables, and the Del Monte people have a clearer picture than do Kraft employees who deal with a myriad of stock-keeping units in shelf-stable, frozen, and refrigerated distribution. The larger companies can deal with the size factor by divisionalizing and having separate product development units for each division. However, to fill needs and provide promotional opportunities, people will be moved between divisions. The situations just

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stated are not good or bad; they are, however, different. The organizational structure which you, as Director of Product Development, choose for your group must reflect the following: your ability to anticipate what your people will be doing six months from now, your need for flexibility, and your potential need for people with different skills. If your people only know one sector of product development and know it very well, you will be able to do almost anything in that sector and hardly anything outside of it. What business are you in?

Degree of Need for Cross-Disciplinary Integration If your company is in the gummy bear business, your product developers need skills in hydrocolloids, sweeteners, flavoring, texture evaluation, and sensory testing. Some marginal support from packaging might also be a plus. Suppose marketing decides that gummy bears should be the delivery system for nutraceuticals. Now there is an overlay for a number of new participants in the product development process: nutritionists, toxicologists, analytical chemists, perhaps some medical inputs, and inescapably, the lawyers. Moreover, there are now storage-stability issues which may be new and flavor-masking needs with which current staff can probably deal. Production temperature may become important, and process changes may force hydrocolloid changes. This example is perhaps quite timid compared to what would happen at a thermal processor who decided to go into irradiation or pressure processing. Years of knowledge and thermal process tables, along with the quality assurance history and regulator acceptance, are now all out the window. This time, the lawyer may come first, along with teams of process authorities, microbiologists, analytical chemists, nuclear regulatory people, and so on. What was complex, but well understood and within the control of product development, is now a company-wide activity, and you’re at the center of it. In addition to all the risk factors, what will happen to the taste, texture, and nutrients of your product? To choose an appropriate organizational structure for product development, you must understand either how autonomous or how interconnected your department is with other functions inside the company or with external resources which you may engage.

TRADITIONAL DEPARTMENTS BY DISCIPLINE In this classical departmental structure, each department has a staff of individuals with similar but complementary skills. They normally receive assignments from the department head who conceives them or, more often, responds to requests from elsewhere in the company. Department members carry out assignments independently or in conjunction with other coworkers when the project warrants more effort. When the assignment

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(at the department level) is complete, it is usually passed on to another department which carries the work to the next step (production, marketing, packaging, or other necessary departments). Looking at the technical organization from the Vice President of Technical down, Figure 4.5 describes a subordinate set of functions for engineering, packaging, quality assurance, and research and development. There are several benefits to the disciplinary structure. Each employee in the department has access to others who can help, understand, and train them. The structure provides some security as a familiar territory and has a department head who can represent employee issues to the next level. Quality control (of the product development effort) occurs as work products are approved by department heads for release. The department head structure provides management control of how each employee’s time is allocated. Departmental resources can be shared or allocated to meet the demands of the project mix. Even with all these advantages, the disciplinary structure has drawbacks. Employees may become insulated from the bigger corporate picture, and become less sensitive to external changes. The department may become the world of the product developer. Coworkers may be competing for individual recognition; this can be both healthy and unhealthy. For example, some companies have created recognition systems which focus on patents: this can make employees secretive about their ideas and reduce collaboration. Ulti-

FIG. 4.5. Traditional departmental structure.

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mately, in the disciplinary structure, the department head bears more responsibility than the employees; employees may not be exhaustive in their work because they expect deficiencies to be caught by supervisors. Interdepartmental transactions will inherently cause delays. Finally, the bigger innovative ideas usually involve more than one discipline. Hence, the disciplinary structure is at a disadvantage for significant innovative development. On a more generalized plane, whether a single product developer should have both long-term and short-term assignments is worth considering. On one hand, there is a strong likelihood that the long-term assignments will be neglected in favor of the short-term needs. On the other hand, if the employees can learn to balance their time allocation, their ability to understand both long-term and short-term projects will make them and their department stronger. From my own experience, giving employees both experiences is better, but not at the same time. The disciplinary structure is best applied to medium-sized companies whose focused businesses are technologically routine and where the business sector environment is stable. Sometimes to overcome the inherent turf mentalities which evolve here, full-time integrators take on the responsibilities for horizontal communication with participants as needed. They have titles such as project manager, product manager, or program manager. Task forces are similar in structure to teams coordinated by full-time integrators, but they are intentionally temporary. Cross-functional teams are permanent task forces with a full-time integrator as the leader.

ORGANIZING BY STRATEGIC BUSINESS UNITS (SBU) When a company’s activities, product lines, or geographic regions are distinct from one another and require different skills or, more often, different priorities, then these units may be structured in parallel and staffed to meet the specific requirements of each SBU. Figure 4.6 shows a typical SBU organizational structure. Note that this product SBU structure could just as easily be a geographic structure. Also note that the duplicated departments in an SBU structure will reflect the needs of each unit, while research and development, accounting, manufacturing, purchasing, personnel, engineering, and other departments may or may not be centralized. Even when accounting or quality assurance report through the SBU, they will still report to corporate departments for policy. An SBU structure is usually for large inhomogeneous corporations. In the late 1960s, General Mills, Inc. had dedicated technical groups for its Betty Crocker Division, its Golden Valley Division, Food Service, Beverages, Refrigerated, and later Frozen (when Kraft offered refrigerated distribution to a competitor), and other divisions. Each SBU is organized to respond to its own environment. The employee identifies with the SBU brand (or region) and usually focuses on the near term horizon. The SBU goals, which are

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FIG. 4.6. Strategic Business Unit (SBU) structure. (Analogous to geographic structure, e.g. North America, Europe, and Asia) shared by all SBUs, may be limited to company name and brand protection and sometimes profitability targets. SBUs may become insulated and ignorant of sister SBU activities; they may even compete. The primary benefits are that the SBU department can be staffed with the exact skills it requires and that the staff is entirely dedicated to the particular and immediate needs of the SBU. In a large company with a disciplinary centralized structure, there will be a number of flagship brands which represent a substantial share of corporate revenues. An emerging new product line has no power base to compete for product development support in a lean organization. Only by dedicating a limited staff to the emerging unit will it be adequately supported. Though the SBU structure allocates resources to the business units, it pays a penalty of efficiency. If allocation of resources in a central technical group could achieve the same division of staff focus (and that’s a big if ), then the centralized structure would be more cost-efficient in terms of utilization of personnel and the technical experiences of the technical individuals and of equipment duplication. Centralized service efficiency may never solve personality needs of SBU executives who may gravitate toward requiring absolute control. Regardless of this author’s mixed opinions about executives’ needs, when properly applied SBU structures can, and do, provide the focus and responsiveness needed for successful business management.

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HYBRID STRUCTURES As just described, the SBU structure provides some autonomy and local control, but it does not spin off the divisions; some corporate functions continue. When the autonomous portion becomes more focused on just a few essential departments, the SBU structure is referred to as a hybrid structure (Figure 4.7). The efficiency of a disciplinary (centralized) structure is retained for a substantial number of functions while key dedicated groups report directly to the SBUs. Even in the previous General Mills, Inc. example nearly all research people, regardless of reporting structure, were housed at the James Ford Bell Research Center in Golden Valley, Minnesota. In some cases SBUs will all share one manufacturing facility. In the early 1970s, at the Kitchens of Sara Lee, the baking was centralized in their Deerfield, Illinois, facility and each year the production people went crazy as the fiscal year ended. Each product manager, knowing that bonuses are related back to management objectives in the annual plan, decided to have product promotions in the fourth quarter. The bakery was already a three-shift operation, and there was insufficient capacity to produce the promotions. Top management avoided confronting human nature and simply put product managers on four different fiscal calendars. This was infinitely easier than dividing up an integrated manufacturing facility.

FIG. 4.7. Hybrid structure.

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In a way, all SBU structures are hybridized structures; some are just more hybrid than others. The benefits of hybrid organizations include: • Essential functions for SBUs are under direct control. • Common functions in central services are efficient. • Some insulation of SBUs is overcome by horizontal lines of communications to the central service departments. The drawbacks include: • There are inherent delays in, and competition for, central services. • Administrative overhead is required to resolve conflicts. • Management will also need to provide adequate communication.

MATRIX STRUCTURES/CROSS-FUNCTIONAL TEAMS The matrix structure is clearly the most sophisticated organization design, and it is depicted in Figure 4.8. In this structure, individual employees are assigned to one or more project teams and report to a disciplinary manager as well as each of the project managers associated with their assignments.

FIG. 4.8. Matrix structure. (Note that employees can have multiple assignments, as shown with bold or italic print.)

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As the project progresses (in the more evolved matrix systems) the project management may shift to the team member whose function is most central to the current project stage (for example, from marketing to product development, to packaging, to production, and to sales). The benefits of the matrix system are these: • Scarce resources can be spread over several activities. • Disciplinary oversight and project oversight are both intimately involved. • Rapid response is possible in a highly changing environment. • Surviving employees become highly versatile and broadly experienced in both technical and interpersonal skills. The matrix structure is well applied to medium-sized organizations with diverse product lines, especially when nonroutine technologies are involved. Matrix systems also have many drawbacks: • Dual authority requires substantial negotiation for resources. • Workers have two (or often more) supervisors who must evaluate their performance. • Workers can easily become overcommitted by several project managers who each see their own priorities amplified. • Many meetings must be attended. • Much coordination, as well as the ability to resolve conflicts, is required. • Finally, any weak workers (or managers) in this system will be trampled.

ORGANIZING PRODUCT DEVELOPMENT You, as Director of Product Development, now manage a function which has either an imposed or evolved structure. How do you know if it is working properly? There are a few telltale signs that indicate when a structure is not working: decisions are late and/or unclear, the company doesn’t respond to its environment, and too much conflict may occur. In a well-structured organization, vertical and horizontal communications are balanced so that employees know at least some of the strategic plan, and management knows what its people are working on. Also workers don’t meet for lunch as a department. Your product developers should take a marketer or purchasing agent to lunch. So how do you decide on the best structure for product development? Here are eight factors to consider: 1. Is the expected output of product development somewhat predictable and well defined?

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2. Is the product development activity large enough and active enough to organize? 3. Is the business and technological environment stable or shifting? 4. Is the product line homogeneous or diversified? 5. How open is management to delegating responsibility paired to authority? 6. How experienced is the product development staff? 7. Can you comfort those employees threatened by change, or can you afford to lose them? 8. Finally, will top management support a change in organizational style, even if the transition is stressful? Having some humility about a reorganizational effort is very important. If the rest of the company is satisfied with the status quo, a unilateral effort on your part may be a mistake. Company progress involves a network of partnerships.

INDIVIDUAL PERFORMANCE The not-so-hidden theme of this chapter is that the key to company performance (and your management career) is maximizing the performance of the individuals assigned to you. The way you structure the department is one important factor toward that goal. In my view, employee empowerment is at the very heart of the organizational design issue. To work toward employee empowerment, you must ask yourself a number of questions: 1. How much command and control does management require? 2. Are the goals and guidelines for the individual clearly defined and accepted by management? 3. How will vertical and horizontal communications be conducted? 4. When individual workers have a problem, to whom do they turn? 5. If workers are given independence, what do managers (you) do? 6. What happens to an individual who makes a mistake? Further toward making an organizational structure change which effects the individuals in your group, how do they view these different structures? From the perspective of employee outlook, a disciplinary department employee probably sees himself or herself as a professional specialist (for example, an engineer, accountant, or nutritionist). In an SBU structure, the employee probably identifies with the brand or product line (for example, Perky’s, lowfat ingredients, or tomato products). Hybrid team managers may identify with the current challenge or with the team. Matrix employees

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should be able to identify with their own abilities to adapt to a changing environment: multiple teams, multiple projects, and multiple leaders. The matrix person probably has the broadest perspective of the company.

SUMMARY 1. Medium to large research and development organizations can be structured in various ways depending upon size, culture, continuity, and disciplinary complexity. Those structures include: disciplinary, product or geographic SBU, hybrids, and matrix (cross-functional teams). 2. The structure that is chosen is probably less important than a clear management vision, well-defined leadership and management roles, employee empowerment/defined objectives, and a team perception of success or failure. 3. The very front end of a project should involve marketing/market research presentations to the product development team followed by joint target setting.

ACKNOWLEDGMENTS Special thanks to Dr. Aneil Mishra of Wake Forest University’s Babcock School, who guided me to academic source material. Thanks also to Sidney F. Sapakie for sharing some key points from his course outline.

BIBLIOGRAPHY Brody, Aaron L., and John B. Lord. Developing New Food Products for a Changing Market Place. Lancaster, PA: Technomic Publishing Co, Inc., 1999. Daft, Richard L. Organizational Theory & Design, 5th ed. St. Paul, MN: West Publishing, 1995. Fuller, Gordon W. New Food Product Development: From Concept to Market Place. Boca Raton, FL: CRC Press, 1994.

5 Product Life Cycle: Consumer Market Research Herbert Weinstein, PhD, Weinstein Consulting International

INTRODUCTION The U.S. market is undoubtedly one of the most active in the world for new product introductions. Many institutions, including consultants, publishing companies and trade associations, one way or another try to estimate the number of new products introduced each year. For example, various estimates in 1999 show between 4,000 and 8,000 new products were introduced. The success rate varies because of many factors. It is generally agreed that just one out of ten products which have gone as far as internal or external taste/preference panels, is test-marketed, and then mostly on a regional basis. From 1980 to 1990, General Foods Corporation estimated that out of every five products launched, just one would still be in the market three years later. Other food companies will have a different rate of success. The product life cycle is one of the many measurements used to gauge the success or failure of a new product and will form the basis of this chapter. 51

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CLASSIFICATION OF NEW PRODUCTS There are several ways of classifying new products, and it is important to be clear on when and why a product should be classified and/or called a new product. They are as follows: • • • • • • •

Line extensions Repositioned existing products New forms of existing products Reformulation of existing products New packaging of existing products Innovative or added-value products Creative products

The terms are self-explanatory. Their life cycle can be considered as independent of how they are classified; yet within the definition sometimes there is an implication of life cycle. For example, new packaging of an existing product could happen because a new packaging technology becomes available, making it better or cheaper. Alternatively, the life of the format and graphics of the package may have become old-fashioned, obsolete or need updating. Frequently a change happens when the Marketing Manager is new and would like to give a little push to his or her new product or assignment. Books and magazine articles provide a multitude of explanations and descriptions of the product development processes and their direct or indirect effects upon life cycles. Such articles will cover these topics and questions about the product: Is it novel? Is it unique, untried, unfamiliar, or previously nonexistent? Is it matching a competitor? Is it a copy, me-too, more of the same, or a line extension? Is it reinventing the wheel? In many cases, the new product is already out there somewhere, and the product development team does not even know it. Therefore, the above mentioned concepts are used to define or at least characterize a new product. The concept of product life cycle may or may not be associated with a classification of what a new product is or of a development which could create a new product, as will be seen later in this chapter.

DEFINITION OF PRODUCT LIFE CYCLE There is really no definition that covers all aspects of what constitutes a cycle of existence of a certain product. It depends on how the product was developed and, more importantly, how it is marketed. Here are some examples.

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JELL-O™ JELL-O™ gelatin has been in the market since the early 1920s. Although there have been several approaches to marketing this brand of gelatin dessert, from a technical formulation point of view, there are principally four different products: Regular—The typical formulation in existence since inception. Quick-recipe—The typical formulation, but modified physically in such a way that the gelatin dissolves faster. Preparation calls for one cup of hot water and one cup of cold water rather than two cups of hot water, thus allowing for a faster set. Instant—A change in formulation that allows a much faster setting time and where the product can be consumed almost immediately (twenty minutes after preparation). Ready-to-eat (RTE)—As the name implies, the gelatin dessert is prepared in a central plant, and the consumer buys it and serves it with no preparation time. What is the life cycle of each of them? The regular recipe was the only one available for a long time in the early years, but with social changes it became apparent that it was losing preference and/or share of market because of the long preparation time. Consumers needed a faster-respond product; in other words, the product had to evolve parallel to the consumer, even to the point of existing in a ready-toeat format. The manufacturer responded to consumer needs and desires and thus maintained the life cycle or existence of the product.

Pop-Rocks™ Pop-Rocks™ is a confectionery product, prepared with patented technology; the product pops in the mouth as the small gas bubbles entrapped in hard candy burst because of the mouth’s moisture, producing a sensation on the tongue. Marketing managers agreed that the product would be a fad, that its innovative functionality was not one that could attract the consumer for a long time, so a rollout marketing plan was developed, starting in the West Coast of the United States and slowly expanding towards the East Coast. This plan took account of a production volume which was limited because of the expense of purchasing and installing the innovative manufacturing equipment needed to produce Pop-Rocks™. Unfortunately, the marketing group did not predict that the product was going to be so successful, with demand such that smuggling was occurring between the West Coast and consumers who wanted the product in other parts of the country. Consumers paid many times its set retail price just to get it, irrespective of where it came from. The company produced as much

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product as it could, but the peak of the predicted life cycle came much faster than expected, and the product lost its newness and attractiveness quite quickly. Its life cycle was here today and gone tomorrow. Later, the company sold the technology and today Pop-Rocks™ can be bought in the United States, but they are imported from Spain.

Lunchables™ These are lunch boxes by Oscar Mayer including meat (hot dogs), cheese supplied by Kraft, and crackers supplied by Nabisco. The life cycle of a single type would not be long, because consumers do not want to have the same mix for lunch over a long period. Thus the contents have to be varied. In this case, the life cycle of the concept is what can be considered long and typical, but variations and options have to be presented to the consumer quite frequently because the life of each particular combination is limited. This consideration makes it difficult to define the life cycle of these types of products exactly.

JELL-O Pudding Pops™ This is an ice-cream type product manufactured with specific proprietary technology developed from a combination of ready-to-eat pudding and Cool Whip™. The distribution network for this product was designed to be different from regular distribution of ice cream: products were to be distributed at frozen food distribution temperatures. A well-known marketing fact for ice cream is that the always-available favorite flavors should be vanilla, chocolate, and strawberry. Pudding pops, because they would compete with ice cream, were designed to have these flavors too, and it was reasonably expected that they would have a long life cycle. These flavors were designed to be the base of the marketing scheme. However, promotional flavors were also included in the product range, with expected life cycles of perhaps one season. Here the concept and the product—in its basic flavors—could have a long life cycle, but some of the other flavors would have to be changed on a constant basis. So, we have established that the product, its concept, and its marketing will influence its design life cycle. The consumers’ reactions to it also influence the length of time the product remains viable in the market.

PRODUCT ATTRIBUTES The product’s attributes are identified by answering questions on its characteristics as they satisfy the consumer: • • • •

What is the product? Who are the consumers, and what do they want? When and where is the product’s place, relative to time and space? Where in the store should it be placed?

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When should it be placed? Is the placement timely: too early or too late? How does the price compare to its value? What are the quality and convenience perceptions? How is its positioning, by itself and relative to the competition? Are perceptions being promoted, and how is the advertising to the consumer defining and positioning the product?

These days, many other perspectives generated by consumers require consideration, specifically those concerns in the areas of nutrition, environment, religion, and culture. This is what makes a product, and because such a variety of factors influence its being—some real, some perceived, some generic, and some individualistic—the life cycle of a product can be, to a certain degree, variable to the consumer itself. In other words, one consumer might stop buying the product when another one is strongly pursuing it.

INFLUENCES ON THE LIFE CYCLE OF A PRODUCT From all the above explanations and examples, we see that many factors influence the real-life experience of how long a product remains viable and for how long the consumers will want to acquire it. This leads to the conclusion that the life cycle of a product is influenced by the following: • • • • • •

Demographics and economics Health, nutrition, and safety Technology Manufacturing style and capability Total quality management and just-in-time co-packing Other external and environmental factors

None of these factors are independent, and their influence is not always the same. They do not all have the same weight or even the same perception by different consumers. Therefore, the life cycle of a product is an independent and intrinsic characteristic, which is strongly influenced by many external circumstances, all of which lead to something unique in the eyes of each consumer.

TRACKING LIFE CYCLES The following are some generic examples of graphs that depict typical life cycles. These curves show attained volume versus time, in no particular units.

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FIG. 5.1 Classical life cycle chart. Figure 5.1 shows the most typical curve and the one that most marketers would like their products to follow. The classical product depicted here eventually reaches its peak sales point and then naturally descends to a point where the volume grows with population and the product is just there—a mature product. The curve in Figure 5.2 depicts a life cycle of a product that is launched, reaches its peak sales relatively quickly, and then just dies. This is often referred to as the hula-hoop type. Many such products are seasonal or promotional-type products: they come and go, some of them every year, like pumpkin pies for the Thanksgiving season in the United States or chocolate bunnies for Easter. The products depicted in the graph in Figure 5.3 take a long time to get started, and then when they do, they last in the market for relatively short periods. Of course, it is possible that one of the products depicted here could have a comeback and initiate a mature period or even increased sales. Many products show the type of curve in Figure 5.4 when they are promoted very strongly at the time of launching. Many consumers want to try the product, especially when enticed by giveaways, reduced sale price, or other promotional efforts, so there is a high initial consumption. In marketing, many errors have been committed when future sales are predicted on the basis of initial sales of products with life cycle curves such as this one.

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FIG. 5.2 Life cycle of a product that reaches its peak sales quickly and then dies.

FIG. 5.3 Life cycle of a product that takes a long time to get started and then lasts for only a short time.

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FIG. 5.4 Common life cycle of a product promoted very strongly at the time of launching.

SUMMARY Product life cycles are influenced by many factors, some of which have been discussed here. Main ones are the consumer, company policies (such as marketing, brands, manufacturing, and distribution), the external environment (such as the economy, health, nutrition, and safety considerations), and the general market trends. Each product’s life cycle is, therefore, not dependent on its formulation or manufacturing process, conditions that technical personnel alone can control. To understand the life cycle of a product, but mostly to influence it properly, the development team has to follow the marketing and development plans. It must also have the ability and flexibility to change and modify those plans when deemed necessary, with the input of the consumer (feedback) and the evolution of the markets.

6 Shelf-Life Considerations and Techniques Michele Perchonok, PhD, National Space Biomedical Research Institute

INTRODUCTION Shelf life can be defined as the time when a product no longer maintains the expected quality to the consumer. Clearly the quality loss should be without compromising safety. However, safety is not the only quality attribute that should be considered in determining shelf life. Increased microbial growth may compromise flavor and color without the food becoming unsafe. In addition, if a nutritional claim is part of the product concept, then a loss in nutrition may determine when the shelf-life end point has occurred. Finally, shelf life can be determined by the change in quality factors of the product whether they be appearance, texture, or odor. Shelf life and product quality are highly related. When determining shelf life, one needs to determine important quality factors or concepts for the food item. Is it safety, labeling, or acceptability? The product developer needs to determine which quality factor is most important and how quickly the quality factors will change. 59

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The product developer has not completed the development process until the product has been in distribution for at least the product’s nominal shelf life. The shelf-life end point is that time when the product no longer represents the product concept. Shelf life is an important attribute to consider when developing the concept for a new or revised food item and the desired shelf life should be stated. For example, a shelf stable product typically requires a shelf life of at least six months. However, if this shelf life is not considered during the formulation of the product, the shelf life may turn out to be only be two months.

FACTORS CONTRIBUTING TO SHELF LIFE Food is not a model system, and several changes can be occurring in the food at the same time. These changes may be due to microbial growth, chemical reactions, and physical changes. Often all of these will occur in a food. The product developer should consider these changes and determine whether the microbial growth, chemical reactions, or physical changes most quickly affect the food quality and hence limit the shelf life of the product. It is also possible that the limiting factor will be a combination of the changes. For example, the oxidation of the fat, a chemical reaction, will significantly change the product flavor, a physical change.

Microbial Growth Increased microbial growth can result in an unsafe food product if the growth is foodborne pathogens and toxins. However, increased microbial growth can adversely affect food quality resulting in the end of the shelf life. Microbial growth can change the flavor, appearance (including color), odor, and the texture of the food (Kuntz, 1994). Microbial changes can be measured during the shelf life. When designing these tests, environmental factors should be taken into account. However, the product developer must keep in mind the product concept and the desired attributes. By decreasing the pH to below 4.6, most bacteria will be prevented from growing. The lower pH may not be practical in all cases because the more acidic flavor of the product may not be acceptable to the consumer. Most bacteria grow optimally between 21°C and 38°C. Therefore, if the food is being stored outside those temperatures, tests for microbial changes probably do not need to be conducted. Changing the storage temperature can also change the rate of microbial growth. Lower temperatures will slow down the rate of growth, and higher ones will inactivate or kill the bacteria. Water activity, to be discussed in more detail later in the chapter, will also affect the rate of microbial growth. Water activity should be controlled at every step including ingredient storage, processing, and distribution to help prevent growth. At a water activity lower than 0.6, microbial growth can be prevented. Mold and yeasts will not grow below a water activity of 0.61,

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and bacteria will not typically grow at a water activity less than 0.91 (Taub and Singh, 1998). With the exception of osmophilic yeasts, most bacteria, mold, and yeasts will not grow below 0.7 water activities (Hegenbart, 1992). Increasing solids with sucrose or salt, using gums or starches, or adding humectants such as glycerin or corn syrup, can reduce water activity. Higher D.E. (dextrose equivalents) corn sweeteners bind more free water than lower D.E. sweeteners. However, a lower water activity may not be appropriate for the desired texture or flavor of the product (Eskin and Robinson, 2001; Kuntz, 1994). Decreasing the oxygen within the food storage environment can also prevent microbial growth. This can be done by removing the oxygen from the packaged food environment and maintaining the low oxygen level with an oxygen-impermeable packaging. However, at least 0.5 percent partial pressure of oxygen should be maintained to prevent anaerobic conditions. A partial pressure of 0.5 percent oxygen will not allow the growth of Clostridium botulinum. Similarly, increasing the carbon dioxide within the environment will help prevent microbial growth. If the product development team does decide to measure the microbial content of the food, then the team should ensure that the analysis is suitable for the food. First, only the organisms expected to grow in the food should be tested. For example, if the environment is not anaerobic, then it is not necessary to test for Clostridium botulinum. Other factors to consider are temperature and moisture of the food throughout the shelf life. These environmental conditions will aid the team in determining what organisms are more likely to grow. The team, as in other shelf-life testing protocols, should estimate the shelf life to obtain a valid number of data points in the sampling. Realizing that microorganisms have four phases in the growth cycle is important (Frazier, 1967). First there is a lag phase when there is very little increase in growth. Next there is growth phase where a large increase in microorganisms occurs in a short period of time. In the stationary phase the number is maintained. Finally, there is the death phase where the number of microorganisms decreases. Clearly, the testing must take into the account these four phases to better understand what is happening throughout the shelf life. As a rule of thumb, the product developer can use the following to determine the shelf-life end point for microbiological changes: Once there are 10,000,000 bacteria per gram, 100,000 yeast per gram, or visible mold growth in a food item, the microbiological shelf life has ended (Curiale, 1998).

Chemical Changes Enzymatic Several types of enzymatic reactions can occur in food which may affect its shelf life. Proteolytic enzymatic reactions will break down the protein in the food (Taub and Singh, 1998). Depending on the food, the impact can be loss of nutrition, loss of protein functionality during food processing or

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food preparation, or browning. Whether this reaction results in a shelf-life issue is again dependent on the product concept and consumer perception of the changes. Lipolysis, another type of enzymatic reaction involving the enzyme lipase and lipids, can result in flavor changes that are not acceptable to the consumer. Temperature, pH, and moisture are factors which can control lipase activity. The product developer, as part of the product team, must determine when the flavor change becomes unacceptable. Some oxidative flavor changes may not be significant enough to claim the shelf-life end point (Taub and Singh, 1998). Storage temperatures can also be kept lower to minimize growth of microorganisms with high lipolytic activity. Optimum highest enzymatic activity occurs at temperatures slightly higher than ambient temperatures (Kuntz, 1994). To prevent or minimize enzymatic changes within a food, the product developer has some options. The enzyme can be inactivated. Although each food system and each enzyme is unique, the required time and temperature for this inactivation is approximately 93°C for two minutes (Kuntz, 1994). If the heat treatment is not possible, then decreasing the water activity to less than 0.8 will provide the necessary environment. Lipid Oxidation Primarily, lipid oxidation may occur in foods high in fat when exposed to oxygen. The oxidation, measured by the peroxide method or by measuring the free fatty acid value, will result in flavor changes, namely rancidity. It can also cause changes in color, texture, and nutritional content. A higher level of unsaturation in the lipids will result in significantly more lipid oxidation. The environment where the food is stored can affect the rate of lipid oxidation. Higher temperatures and light can increase lipid oxidation. The presence of metal ions (such as copper or iron) will often increase the oxidation process through a catalytic reaction. Product moisture and pH will also affect oxidation. If the rate of lipid oxidation is too high, then adjustments can be made to the food or package. For example, a different package can be used which is more impermeable to oxygen. The food can be vacuum-packed or nitrogen flushed to minimize the oxygen content within the food package. If product reformulation is possible, then the percentage of lipid can be reduced, or a more stable, saturated form can replace the current lipid source. Also, higher acid and lower pH will aid in fat stability (Kuntz, 1994). Maillard Browning Other chemical changes can occur throughout the life of a product. One very common set of chemical reactions that can occur is nonenzymatic or Maillard browning reactions. Maillard reactions involve protein (amine group) and reducing sugars in a combination of chemical reactions, which result in

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the development of brown coloration and toasted to burnt flavor. Higher temperatures will increase the rate of Maillard reactions (Fennema, 1976). Although this set of reactions may be desirable (for example, in the toasting of bread), often the reaction will result in an unacceptable product. Decreasing the storage temperature of the food or controlling the water activity can control Maillard browning (Taub and Singh, 1998). Maximum Maillard browning occurs at water activities between 0.6 and 0.7 (Marsili, 1993). Nutrient Loss Over time, food should be expected to lose some nutrient content. Nutrient changes can be measured during the shelf-life testing if it is appropriate and the resources are available. Environmental factors such as temperature, light, water activity, and pH can affect the stability of thiamine, ascorbic acid, pyridoxine, folic acid, tocopherol, retinol, and carotene (Taub and Singh, 1998). This effect on stability may be more important if nutritional content is key to the product concept. In the case of a pet food, an assumption must be made that the pet’s diet is entirely this food. Hence, all of the daily nutritional requirements must be met with the food. Another example is if a nutrient claim is made and placed on the product package, then it is necessary to know that the claim is valid throughout the lifetime of the product. In other words, if a breakfast cereal is claiming 100 percent of the Recommended Daily Intake (RDI) in a serving, then the product development team must determine at what point the food product no longer meets the claim. At that time, the product team must consider the risk-benefit of adding more than the 100 percent RDI level of vitamins. One of the analyses that they may do is to compare the relative cost of the additional vitamin versus tightly controlling the distribution of the product to insure that the product never extends past its shelf life. Nutrients can be lost due to some of the chemical reactions that have been discussed above. For example, protein degradation can occur through the enzymatic proteolytic reactions or the nonenzymatic Maillard reactions. If protein is needed for functionality then the loss of protein may be significant. For example, the protein gluten is very important in the loaf development of bread. Loaf volume is directly related to the acceptability of the bread. A higher loaf volume will result in better texture and hence have a higher acceptability. If there is a reduction in protein, then the loaf volume and hence acceptability of the bread will decrease.

Physical Changes Texture A change in texture, often related to product quality, may occur in a food throughout its shelf life. Enzymatic reactions, moisture changes, and chemical reactions generally cause texture changes (Taub and Singh, 1998). The

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product developer should identify the texture changes that may occur and then decide if they can be prevented. The product team must evaluate the risk-benefit of shorter shelf life or increasing the overall product cost by making adjustments to the product formulation, packaging, or distribution system. As an example, consider a product with a sauce that over time loses its viscosity. In this case, the product developer should first review what type of starch is in the formulation and its properties. Next, the product developer should determine what temperatures and other processing conditions the food (and starch) is exposed to. For instance, is the product being shipped in the middle of winter and possibly being exposed to freezing temperatures? If the starch used in the formulation is not freeze-thaw stable, it is possible that the solution would be to either replace the starch in the formulation with a freeze-thaw stable starch or to change how the food product is distributed. Color Color is a major attribute that can influence consumers. Over the food’s shelf life, color can fade or change (browning) (Taub and Singh, 1998). All of these changes can be measured using a colorimeter or spectrophotometer. Although a cruder and less accurate measurement, color can also be measured using paint chips. Clearly, the choice is up to the product development team who should take into account the resources available to the team. Moisture Moisture gains or losses in a food may be indicative of texture changes and sensory changes including color and appearance. Depending on the food, there may be moisture migration between two components in the food or between the food and the outside environment. This migration may result in physical changes such as clumping of a seasoning blend or loss of crunchiness in breakfast cereals. In a freezer, the freeze-thaw cycle may create evaporation on the surface of the food. Finally, moisture loss may increase the crystallization of the food. The product developer may decide to measure the water activity of the food. Water activity (aw) is defined as the percent equilibrium relative humidity divided by 100. At this equilibrium relative humidity, the product will not pick up or lose moisture (Eskin and Robinson, 2001). The water activity can also be defined as the free water available for chemical reactions. The rate of microbial growth, Maillard browning, and other chemical reactions will change, depending on the water activity, and these changes can greatly affect the shelf life of the food. There are two types of water activity measurements. The first measurement is the water activity at a specific time. This number is very important

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to determine whether bacteria will grow or other chemical reactions can occur. However, this measurement will not determine what will happen to the food during storage in a very humid or dry environment. Knowing the information is important, especially if the packaging is permeable to water. In this case, a moisture sorption isotherm can be developed. The moisture sorption isotherm measures the water gain or loss in the food at different relative humidities. Moisture sorption isotherms can be developed by artificially forming various relative humidity environments in desiccators by placing the appropriate supersaturated salt solution in the base. The salts that can be used are shown in Table 6.1. The method to develop the moisture sorption isotherms is relatively simple. The samples are preweighed and placed in the desiccators. In about three weeks the samples are equilibrated within the desiccators. In other words, it will take about three weeks until the weight of the samples does not change. At a relative humidity less than the product’s water activity, there should be a loss in weight (water). Similarly, at a relative humidity greater than the product’s water activity, there should be a gain in weight. It is possible to develop moisture sorption isotherms of the finished product or just on individual ingredients. If all the ingredients are tested, then a mathematical equation will provide the overall water activity at a given relative humidity. This equation is as follows: aw  (aw1)m1  (aw2)m2  (aw3)m3  (aw4)m4 . . . Where aw is the total water activity of the mixture, aw1 is the water activity for component 1, aw2 is the water activity for component 2, etc., and m1 is the grams of component 1/grams of total mixture (Bell and Labuza, 2000). TABLE 6.1 Suggested salts to use to develop moisture isotherms. Salt Lithium Chloride Potassium Acetate Magnesium Chloride Potassium Carbonate Magnesium Nitrate Sodium Nitrite Sodium Chloride Ammonium Sulfate Potassium Nitrate Potassium Sulfate

Formula .

LiCl H20 KC2H3O2 MgCl2 . 6H20 K2CO3 . 2H20 Mg(NO3)2 . 6H20 NaNO2 NaCl (NH4)2SO4 KNO3 K2SO4

Salt aw values .112 .227 .328 .432 .529 .643 .753 .810 .936 .973

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About six relative humidities should be used to develop the moisture sorption isotherm. These relative humidities should be chosen so that the food’s current water activity is in the middle and the effect of a decrease or increase in relative humidity can be understood. A typical moisture sorption isotherm plot is a sigmoid (Figure 6.1). A steeper or higher rate of change at the higher relative humidities will indicate that the product is more hygroscopic (water loving). In other words, when a hygroscopic food product is exposed to a higher moisture environment, the product will gain moisture. Products that are hygroscopic may require more impermeable packaging, reformulation with less hygroscopic ingredients, and/or special consideration during manufacturing. More discussion on water activity and moisture sorption isotherms can be found in Moisture Sorption: Practical Aspects of Isotherm Measurement and Use. (Bell and Labuza, 2000).

SHELF-LIFE TESTING Conducting Shelf-Life Testing Although shelf life should always be determined on the finished product, it is not the only measurement that may be necessary. Shelf life can also be measured on individual components to determine which component in the formula may be affecting the shelf life significantly. For example, if there is significant clumping of a dry seasoning blend, the product developer may want to determine which component of the seasoning blend is more hygroscopic.

FIG. 6.1 Example of moisture isotherm sigmoid curve.

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Measuring shelf life on product that has actually gone through the distribution cycle is also recommended. As mentioned in the introduction, the product developer’s responsibility is not over until the product has been in distribution for at least one shelf-life period. The data obtained from the distributed product should be compared to the controlled shelf-life testing to determine whether future testing should be revised to better reflect distribution conditions.

Identify Future Handling of Product Prior to shelf-life testing, the product developer should determine how the product will be handled during distribution. Specifically, the distribution and storage temperatures need to be known for valid testing. If the product will be stored at ambient temperature, then the shelf life should be measured at that same temperature. Similarly, if the product is a frozen food, then measuring the shelf life at refrigerated temperatures is not necessary. The other environmental factors should also be considered. Will the product be exposed to high humidity? Clearly, testing the product to determine the adequacy of the packaging and formulation at that humidity is necessary. Testing the product at higher humidities would certainly provide a stress or worst case scenario for the product during the test. Light is another environmental factor to consider. If the food is going to be exposed to high amounts of light, then the shelf-life test should mimic the conditions.

Identify Product Changes Prior to shelf-life testing, the product development team must hypothesize what the expected changes in the product will be during its lifetime and which factors would be limiting for the product concept. These limiting factors can be broken into categories that have been previously discussed in this chapter: microbiological growth, chemical changes, physical changes, and loss of nutrients. Many of these changes can be evaluated based on sensory values including flavor, texture, color, and overall acceptability. The packaging that is used in the food product should also be considered when identifying potential product changes (Taub and Singh, 1998). The environmental conditions in which the food is distributed or stored, and the oxygen, light, and water barrier of the packaging should be considered jointly. For example, if the product is being stored at ambient temperature in a very humid location such as Miami, Florida, then the effects of water absorption on the food product should be considered as well as the water permeability properties of the package. When considering the barrier properties, the package design should also be taken into account. Does the package have a larger surface area? Is the sealability of the material dependable? Each of these questions may influence how the shelf-life test is designed.

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Design of Test The end point of the shelf life is when the product no longer represents the product concept. Therefore, the experiment should measure only those product attributes that are important to the predefined product concept. Furthermore, consideration should be taken on what parameters can be measured. The first shelf-life test conducted on a food product may not occur until once the product has been introduced into the market. The first test may use bench top or pilot plant-produced product. The next shelf-life test may occur during the first test run at the manufacturing plant. With these first two situations, some environmental or other product parameters may be introduced that would not occur in a longer production run. For example, it is possible that one of the proprietary flavor ingredients was produced at the supplier’s pilot plant. In a longer run, the flavor would be produced at their plant. It is possible that a slightly different flavor profile or strength of flavor would be noted. Another example is that in a shorter run, there may be considerable halting of the equipment. More introduction of moisture into the product is possible. For example, the seasoning in the bin is exposed to the environment for longer while in a regular production run the bin runs out in twenty minutes. In a plant test, the bin would not run out for several hours (for example, while the sealing equipment is being adjusted). During the test design development, the resources (number of people, analytical equipment, budget, etc.) that are available must be considered. For example, if sensory testing is to be part of the test design then the availability of the sensory testing facilities and personnel must be available whenever the design requires the testing. Another example relates to budget. It may be interesting to learn whether the loss of riboflavin in a pasta product is occurring over time. However, the product development team must consider the risk-benefit. Is the cost worthwhile for the data received or can it be better spent? The shelf-life test resources can be used more efficiently if the shelf life can be estimated prior to conducting the test. The estimate can be made based on other similar products with known shelf lives, literature, or earlier tests on the product or similar formulas. In a shelf-life test, at least six data points should be acquired including zero time and the end point (Labuza and Schmidl, 1985). Therefore, for a product with an estimated one-year shelf life, seven data points could be collected at zero time, and every two months until the end point (twelve months). No shelf life can be validated without testing the actual shelf life of the product through the distribution cycle. If accelerated shelf-life testing is conducted (further discussion later in the chapter), often the product changes seen at higher temperatures may not be observed at the normal storage temperatures. In other words, the more rapid the degradation in-

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duced, and thus the further from normal storage conditions, the less reliable the shelf-life estimate is likely to be (Labuza and Schmidl, 1985). Therefore, the final shelf-life test conducted on a food product may include pulling product from the distribution cycle throughout the entire expected shelf life of the product. In any shelf-life test, at least 25 percent more product than expected should be placed into storage. This will provide extra product in case some product is lost, the shelf-life test needs to be extended or more product is needed for extra samplings.

Shelf-Life Test Data Collection The measurements made during the shelf-life test should be those that will help the product development team decide when the product concept is no longer valid. These tests can be a combination of analytical tests and sensory tests. Ideally the analytical tests should complement the sensory tests. In other words, if the color may be an attribute that significantly changes throughout the shelf life, then the color should be measured analytically with a spectrophotometer and subjectively in a sensory test. Both types of testing are necessary to discover when the consumer in a sensory test can see the analytical differences. When possible, the sensory tests should be correlated with the chemical and physical tests (Kuntz, 1991). All chemical reactions adhere to the simple general rate equation of 

d[A]  k[A]n dT

where A is the quality attribute being measured, T is the time, k is the rate constant and n is the reaction order (Labuza and Schmidl, 1985). Most quality reactions in food are zero or first order. Zero order reactions have a constant change in quality over time. Typical zero-order reactions (n  0) are enzymatic browning, nonenzymatic browning, and lipid oxidation. Typical first-order reactions (n  1) are protein and most vitamin deterioration and microbial growth. Although not many reactions in food are second order (n  2), it has been reported that in limited oxygen, the degradation of Vitamin C is second order (Labuza, 1982). Figure 6.2 is a comparison of zero-, first- and second-order reactions. As the plot indicates, it is difficult to determine the order of reactions in the beginning of the shelf life. However, toward the end of the shelf life, the deterioration of the quality factor is less in a higher order reaction. Clearly, the product developer should estimate the order of the reactions that may occur in the food if possible. The product developer may then be able to better decide how often the quality attributes need to be measured.

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FIG. 6.2 Comparison of 0th order, 1st order, and 2nd order rate reactions. Sensory Tests Several sensory tests can be conducted during shelf-life testing. These tests can be discrimination tests using trained or untrained panelists, difference tests, duo-tri tests, triangle tests, and descriptive tests. Each of these tests provides a certain type of data. This chapter will not discuss in detail sensory testing since entire books have been written on the subject (Meilgaard et al., 1999). Analytical Tests The analytical or objective tests can be used to quantify changes. As mentioned previously, it is important that the product developer identifies those product attributes which are expected to change during the product shelf life and which are important to the product concept. Texture can be tested using a texturometer, and color may be tested using a colorimeter or spectrophotometer. Moisture can be measured using a vacuum oven, and nutritional content can be measured using AOAC methods (Horwitz, 2000).

Accelerated Shelf-Life Testing Q10 The Q10 is a measure of how the reaction rate changes for every 10°C change in temperature.

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Q10 is defined as Shelf life at temperature T°C Shelf life at temperature (T°C  10) In other words, if the color changes happens in half the time at 10°C higher temperature, then the Q10 is 2 (two). Food is a complicated system of chemicals. Hence, estimating the Q10 is not easy. However, typical Q10 values are as shown in Table 6.2. As can be seen from the ranges in Q10, there is no definitive Q10 for a given type of food. Each food must be tested to determine its own Q10. Also, be aware that the food may have several Q10s. The lipid oxidation may have one Q10 value and the Maillard browning may be a different Q10. Accelerated Shelf-Life Design Similar to an nonaccelerated shelf-life test design, the attributes that are measured should be only those that are key to maintaining the product concept. As mentioned before, shelf life can be defined in terms of safety, acceptability, and nutrition. These changes often occur at a higher rate at higher temperatures. Careful attention should be made on the temperatures chosen for the accelerated shelf-life test. The control temperature should be the temperature at which no changes are expected during the shelf life. Do not assume that this temperature is always freezer temperature. The freezer may introduce some changes that would not occur at higher temperatures. For example, if the food product contains a starch that is not freeze-thaw stable, then storing the food in the freezer may cause the sauce to break down. Table 6.3 provides some suggestions for the temperatures to use. The product development team must consider carefully each of the temperatures. The team may want to test the temperature at which the food is currently being stored as well as a proposed storage temperature. It is possible that a shelf stable food item is currently being stored at refrigerated temperatures to maximize shelf life. However, a request is made by management to consider storing at ambient temperature to save money. The product development team could then conduct an accelerated shelf-life test at the two temperatures in addition to the control temperature. The result of the test TABLE 6.2 Q10 values for foods of various food preservation methods. Food Preservation Method Thermally Processed Dehydrated Frozen

Q10 1–4 2–10 3–40

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TABLE 6.3 Accelerated shelf-life testing suggested temperatures. Frozen -40°C (control) -20°C -10°C -5°C

Dry

Thermally Processed

0°C (control) 23°C 30°C 35°C

5°C (control) 23°C 30°C 35°C

may provide management with comparable shelf lives of the food at the two temperatures. Then management can decide at which temperature to store the food based on the risk (decreased shelf life) and benefit (lower warehousing costs). Accelerated conditions may occur during normal distribution. For example, a nonenvironmentally controlled warehouse in Miami may reach over 37°C in July. In this case, the product developer will need to consider what effects these conditions would have on the food product. Furthermore, temperature may not be the only environmental factor to use in accelerated shelf-life testing. Humidity and light may be used if these conditions are expected and the chosen packaging is not impermeable to them (Kuntz, 1991). Accelerated shelf-life testing is not without the possibility of errors. For example, an increase in temperature may result in phase changes that do not normally occur in the food. Fat melting at higher temperatures can initiate or accelerate certain chemical reactions. Protein can denature at higher temperatures, which can change the functionality during processing or food preparation. Water activity of dry foods can increase with increased temperature. Increases in water activity will often increase the rate of reactions (Labuza and Schmidl, 1985).

SUMMARY Measuring the shelf life of a food is not always a simple endeavor. A food product is a complicated chemical system with many changes occurring throughout its shelf life. However, a product developer has not completed the development of the food product until the product has reached at least one cycle of its shelf life through the distribution cycle. If anything does go wrong in the initial product introduction, then the product developer should be available for the problem solving. The product developer has the best understanding of the product and can most easily troubleshoot the problem. Shelf life can be defined through one or more of the following criteria: safety, acceptability, and nutrition. Any of these criteria can contribute to the determination of the shelf-life end point. During the concept development of a new or improved food product, shelf life should be a stated attribute. However, without conducting the shelf-life study, the product developer cannot know whether the product meets the shelf-life criteria.

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It is not unusual for a food product not to attain the desired shelf life. In this case the decision must be made whether to stay with the shorter shelf life or to try to increase the shelf life without compromising the product concept. As discussed in this chapter, the shelf life may be adjusted by changing the processing conditions, packaging, storage environment, or the formula. In any case, by measuring the shelf life, the product development team can make educated decisions on whether the costs of these changes are justified for the product.

BIBLIOGRAPHY Bell, Leonard N., and Theodore P. Labuza. Moisture Sorption: Practical Aspects of Isotherm Measurement and Use, 2nd ed. St. Paul, MN: Eagan Press, 2000. Curiale, Michael S. “Limiting Growth: Microbial Shelf Life Testing.” Food Product Design. February, 1998. Eskin, N.A. Michael, and David S. Robinson. Food Shelf Life Stability. Boca Raton, FL: CRC Press, 2001. Fennema, Owen R., Principles of Food Science: Part 1; Food Chemistry. New York: Marcel Dekker, Inc., 1976. Frazier, W.C., Food Microbiology. New York: McGraw-Hill Book Company, 1967. Hegenbart, Scott. “Shelf Stable Products: Technology with ‘Keeping Quality’.” Food Product Design. February, 1992. Horwitz, William. Official Methods of Analysis of AOAC International, 17th ed. Association of Official Agricultural Chemists International, 2000. Kuntz, Lynn A., “Accelerated Shelf Life Testing: Is Faster Better?” Food Product Design. December, 1991. Kuntz, Lynn A., “Shelf Stability: A Question of Quality.” Food Product Design. June, 1994. Labuza, T.P., Shelf-Life Dating Of Foods. Trumbull, CT: Food & Nutrition Press, Inc., 1982. Labuza, Theodore P., and Mary K. Schmidl. “Accelerated Shelf-Life Testing of Foods.” Food Technology. 39, no. 9, 1985:57–62. Marsili, Ray. “Water Activity: Why It’s Important and How to Measure It.” Food Product Design. December, 1993. Meilgaard, Morten, Gail Vance Civille, and B. Thomas Carr. Sensory Evaluation Techniques, 3rd ed. Boca Raton, FL: CRC Press, 1999. Taub, Irwin A., and R. Paul Singh. . Food Storage Stability. Boca Raton, FL: CRC Press, 1998.

7 Product and Concept Testing— Methods and Cost Control Tom Heyhoe, Heyhoe & Associates

REASONS FOR TESTING CONCEPTS AND PRODUCTS The average American supermarket has around 34,000 different items (Anonymous, Supermarket Facts, 2001) on its shelves. Over 9,000 new food products and line extensions are launched each year (Anonymous, New Products and Services, 2001). Therefore, consumers have a wealth of constantly changing purchase alternatives. The use of properly constructed concept and product tests allows food companies to identify consumer wants and determine how well the products they are developing are likely to satisfy these.

RESEARCH OPTIONS There are many research options, and those selected will principally depend on at what stage the product development process is, what information is required and the budget available. Some of the more useful options which will be discussed are: 75

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• • • • • •

Important basic research Market profiling Chemical and physical analysis Sensory testing Focus groups Post-launch tracking

Important Basic Research Two of the issues of particular importance in product development are the need for ongoing cost-reduction studies for existing products and the ability to generate highly appealing flavors for new products containing herbal or other nutraceutical ingredients. Ingredient cost-reduction programs often rely almost entirely on negotiating lower prices with existing and potential suppliers or the substitution of expensive ingredients with cheaper ones, for example, replacing almonds with peanuts. Often alternative approaches focusing on ingredient synergies can be very productive sources of significant reductions in product raw material costs. Two ingredient categories where this type of work can be very useful are gums and intense sweeteners. Replacement of single gums with carefully selected blends can save as much as 35 percent of total gum cost while maintaining or even improving texture in comminuted meat products. Similarly using blends of intense sweeteners in low calorie beverages will routinely reduce sweetener costs by 15 to 50 percent and often provide a much better sweetness profile. Examining other ingredient categories in a similar way can also yield useful savings plus flavor benefits. As an example, using a blend of soy-based and whey-based protein concentrates in a range of diet beverages reduced protein cost by 25 percent and significantly improved consumer acceptance. Consumer demand for products with distinct health-related benefits is increasing, and many food manufacturers are developing products to meet this demand. Often this involves the addition of herbal extracts or chemical compounds with distinctive flavors or strong bitter or salt/bitter tastes. Product development groups then have to investigate ways of masking these unappealing characteristics by careful selection of product flavor type. Peppermint and chocolate are typical selections as well as the use of specific masking compounds. What is sometimes overlooked is the need to match the flavor impact time-intensity curve of the masking agent to that of the problem additive. Achieving this solves the difficulty of having developed a product which has a great initial flavor but a disagreeable, lingering aftertaste. Looking at the time intensity of flavor impact also extends to other ingredients such as sweeteners in the product. Where bitter flavors are a particular problem, the cooling effect imparted by some

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polyols can also be used. Consideration of aftertastes is always important in product development work; sometimes they are not picked up by standard, in-company taste panels where exposure to the product is very short.

Market Profiling Market profiling is a form of basic research which is of particular value when an organization is looking at entering a new market where competitors are already active. The types of questions which can be answered include: • • • • • •

Who buys the product? What need does the product satisfy? Where is the product purchased? What quantities is the product purchased in? What is the best season for the product? What is the product distribution chain?

The answers to some of the above questions sometimes appear to be selfevident. For example, it is obvious to all that ice cream sales peak in summer. However, for large countries such as Australia, the onset of hot weather is sequential from north to south. Knowing the likely timing of this sequence allows optimum setting of production, delivery schedules, and advertising support. Again, it can sometimes be assumed that every consumer’s purchase habits are the same. On one occasion, with an instant dehydrated potato product, this assumption was incorrect. Purchasers were segmented into two groups. The first group bought one or two packs on a somewhat irregular (as needs) basis. The second group, which accounted for approximately 70 percent of total sales, bought four to eight packs at a time on a weekly basis. This was clearly an opportunity to introduce a second, larger pack size to service this group. While much of the information obtained through market profiling is of the most direct value to a company’s marketing department, product developers will often pick up information which will trigger useful ideas. The development of a larger potato pack is one example of this. Research techniques used for market profiling include telephone polling, on-site interviews of supermarket customers, discussions with grocery chain distribution and purchasing management, and analysis of store sales data. Information technology systems are now so sophisticated that virtually instantaneous access to product purchase data on a store-by-store basis is possible. Combining such individual store information with relevant regional socioeconomic census data can allow a picture of the likely consumer to be built up extraordinarily fast.

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Chemical and Physical Analysis One of the most common tasks demanded of product developers is to duplicate a newly launched competitor’s product. The time frame allowed for response to the competitor’s market initiative is often very short, and occasionally simple methods get overlooked in the rush. Two such methods are chemical and physical analysis of the competitive products. While the advent of nutrition information panels now provides much of the information that previously would have had to be analyzed for, carrying out specific, relevant chemical analyses can prove useful. Typical of such tests are characterization and quantitation of the sugars present in many products. Additionally, if there is any reason for doubt, it is worthwhile confirming that the information on a product’s nutritional information panel is correct. In one instance, it was found that a small canned food manufacturer was basing its nutrient declarations on analyses carried out some years before by the previous owners of the company. This was despite the fact that several formulation changes had been made in the intervening period. Physical dissection of some types of products is often a great help in determining the approximate quantities of the major, particulate ingredients. Two examples where this has proved very useful were in determining the approximate ratios of meat-to-soy isolate pieces in frozen meat-based products and in finding out the percentages of various fruit and cereal components in Swiss-style muesli breakfast products.

Sensory Testing Sensory testing is, or should be, a scientific discipline using the senses to measure product attributes and acceptance. Sometimes, however, enthusiasm for the product or lack of resources leads to interpretation of results as being positive when there is no statistical basis for this opinion. Probably, the major error is relying on results from small panels. Panel size is critical and as Meilgaard, et al., have stated, “ . . . a small panel is representative only of itself.” (Meilgaard, 1999). In the following sections, the five common sensory techniques listed here and their uses will be discussed. As the available literature on sensory testing is both detailed and immense, information provided here on actual test methodology will be brief. • • • • •

Ranking Rating Profiling Difference testing Preference testing

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Ranking Ranking is the differentiation of products according to identifiable characteristics. Basically, a number of samples, usually three to five, are presented to panel members who are asked to rank them in order of strength of a particular characteristic. For example, panelists may be asked to rank a set of salad dressings in descending order of sourness. Ranking is often used in the early stages of product development to select levels of difference of a particular characteristic which are easily perceivable but not extravagantly so. The technique has the advantage that it is simple to set up, quick to run, and allows multiple samples to be assessed at one time. Two disadvantages are the need to ensure that the samples presented are identical except for the level of the characteristic to be evaluated and the need to ensure that all panel members have the same understanding of the term being used to describe the characteristic to be ranked. This latter problem is most evident when industry-specific terms, for example ‘flintiness’ as a descriptor of the hardness of a cracker, are used. Rating Rating is the quantification of differences between products according to identifiable characteristics. The identifiable characteristic should be an attribute which consumers would consider in deciding on the quality and desirability of the product. For example, amount of fruit flavor in a fruit drink would be relevant but saltiness in dairy foods would not. Rating is often used in the product development process to zero in on likely desirable levels of important product attributes. Rating methodology involves presenting panel members with a set of samples and asking them to rate the degree of intensity of a particular characteristic using a predetermined scale. Many different types of scales are used with the most common being numerical, detailed descriptive intensity and linear. Typically, a numerical scale will consist of a row of cells numbered one to seven or one to nine with one being lowest intensity. For each sample, panelists tick the box which corresponds to their assessment of the intensity of the characteristic for that sample. A detailed descriptive scale consists of a sequence of descriptions of intensity (for example, “can’t detect,” “just present,” “low level,” “moderate level,” etc.). Again for each sample, panelists are asked to tick the description which most fits their perception of the degree of intensity of the characteristic in that sample. Finally, there are line scales as shown in Figure 7.1. Here, panelists mark the line at the point which coincides with their estimate of the intensity of the nominated characteristic in each sample. Some line scales also have a midpoint marked with a descriptor such as “medium intensity.” This is done in an effort to assist panelists but is probably of little or no value.

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FIG. 7.1. End-anchored line scale. The rating technique has the advantage of being quick to set up and being relatively easy for the panelists to understand. Analysis of results is also rapid. However, there are some disadvantages. Numerical and detailed descriptor scales can have too few points which give too imprecise a result or too many points which, especially with detailed descriptors, may confuse panel members. Line scales with no midpoint are best as panelists are completely free to make their own judgements. Scale results, first calculated as distances from one of the end anchor points, can be readily converted to any numerical range, for example, 1–20. Finally, note that calculation of the exact values for individual products and, in particular, the degree of difference between products assessed needs to be done with care. Problems can arise, especially with untrained panels, from effects such as compression, for example, the tendency to avoid the extreme ends of any scale. Rating scales can be used to measure acceptability by using anchor point terms such as “inedible” and “excellent.” Additionally, a number of characteristics such as saltiness, sourness, and sweetness in salad dressings can be assessed at the one sitting. This brings the rating technique close to profiling or quantitative descriptive analysis. Profiling Profiling or descriptive analysis is a technique which uses specially trained expert panels to identify and quantitate sensory characteristics in products. Normally, panel numbers are small, say four to eight, and the panelists work to a series of set descriptors which have been established as part of their training. A major use of profiling is comparison of existing products or products under development with competitive products. The aim of this profiling is to determine the differences between the products with a view to matching a competitive product. For new food additives, profiling is done to investigate the differences between the new additive and existing additives of similar functionality. An example of this is with intense sweeteners where time and duration of sweetness perception and incidence and degree of subsidiary tastes, metallic for example, are very important. Awareness of these differences enables an organization to launch a new additive emphasizing its strengths while being aware of its limitations. Profiling is a vital testing technique in some applications but, on occasion, it can be overused or its results misapplied. The possibility of unnecessary use is important because setting up and maintaining an expert panel

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requires very substantial investment of money, time, and training. For many if not most food companies, the resources required are not justifiable. This is particularly true because independent testing organizations are set up for such testing and provide excellent results. Misapplication of profiling results can occur. One of the problems encountered is directly basing product reformulation on differences reported in panel judgements. Profiling will establish the difference in intensity between a manufacturer’s own product and a competitor’s for a predetermined range of characteristics, but it does not, and is not meant to, explain the reason for consumer preference of one product over another. Also the interaction of ingredients in forming overall flavors in food products makes simple increases or decreases in the perceived amount of flavor less straightforward than it seems. As a simple example, Dr. Robert McBride (McBride, 1990) demonstrated some years ago that increasing sugar content not orange flavor boosted perception of orange flavor intensity. Difference Testing The most commonly used methods for difference testing are the triangle and duo-trio tests. In the triangle test, panelists are presented with three samples, two of which are the same. Panel members are asked to identify the odd sample. In the duo-trio test (again three samples, two which are the same), one of the identical samples is marked as a reference sample. Panel members are asked to indicate which of the other two samples is the same as the reference sample. Difference testing or, more properly, lack of difference testing is routinely used in cost-savings projects, principally through raw material substitution. Confirming that there is no perceptible difference between the current product and a revised, cheaper formulation is a good basis for saving money while maintaining consumer acceptability. However, if such an approach is applied over time, problems can arise. As an example, a new frozen snack item was introduced quite a few years ago. The product was extremely well received and became market leader in its category. Over a fifteen-year period the manufacturer saw the need to reduce the cost of this product even though it had a very healthy profit margin. Raw material substitutions were made on a number of occasions, and each time testing indicated that there was no difference between the product then on the market and the proposed cheaper version. Therefore, each time the cheaper version was rolled out as a replacement. At the end of the fifteen-year period there was a need for reassessment as sales had started to fall consistently, and this could not be accounted for by other factors such as competitive activity and changing demographics. In fact, market conditions at that time should have been conducive to an increase in sales. As a simple start to the investigation as to why sales were falling, samples of the original, fifteen-year old formula and

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the one currently marketed were prepared using the same batches of incommon raw materials. Preference testing was then conducted, and it was found that the original formula was very significantly preferred. Perhaps these results are not surprising, but the manufacturer was then left with making a decision as to what to do to arrest the sales slide. One obvious option was to revert to the original formula, but this meant sacrificing a considerable part of the profit margin built up over the years. The company opted to stay with the formula currently on the market and tried to boost sales by means of a huge advertising campaign. This approach failed. As stated earlier, difference testing is most commonly used in cost-saving projects but much less commonly used in the development of new products. This can be a mistake, especially in the final stages of product development when changes to prototype formulations are generally small. Sometimes preference tests are run without first checking whether there is in fact a perceivable difference between the prototypes. Organizations may well save time and money by keeping clearly in mind that, if there is no difference, there can be no preference. Conversely, opportunities for product improvement can be overlooked in cost-saving projects where, every now and then, an ingredient substitution shows up as different to standard but is actually preferred by consumers. Preference Testing Strictly speaking, preference testing is used to determine which of a pair of products is the most preferred. Typically, the two samples are presented to panel members who are asked which sample they prefer and, normally, the reasons for that preference. Closely related to preference testing is acceptance testing where two or more products are ranked for degree of liking using line or hedonic scales. The results of preference tests need to be interpreted with care, particularly when the number of panelists is relatively small and there is some suspicion that panel members may not be truly representative of likely consumers (not just consumers in general). This caution should extend to analysis of the reasons given for the preference of one product over another. As an example, reasons for preference can divide between some panelists liking a product because of its strong flavor and others rejecting it because that flavor is too strong. Such a result gives nothing in the way of guidance to the development team. Overall, preference testing is an essential part of the product development process, but it is not an infallible predictor of market success. Many other factors affect the initial purchase decision while the sensory appeal of a food product is normally only experienced after purchase, preparation, and consumption. One of these factors is that, while the contents of a package may be excellent, other aspects such as price may override this. As an

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example, a cookie and cracker manufacturing company decided to enter the export market. In its home base, as in many other countries, cookies and crackers were routinely sold in standard-size (one pound or 500 grams) packs containing anywhere from fifteen to fifty units. Although the company knew that cookies and crackers were normally sold in much smaller packs containing one or two units only in the country targeted for export, it decided to stick with its standard pack size and pack form for the export product range. This decision was based on these facts: • Products had rated highly when compared to existing products in the target market. • Current pack gave highly satisfactory product protection. • No capital investment in new packaging machinery would be required. • Existing profit margins could be largely maintained as potential purchasers were well able to afford the larger than usual (to them) packs. However, initial export sales were low and continued that way despite solid advertising support. Additional market research was conducted, and it was found that the major use of cookies and crackers was as an item in the lunches children and workers took from home. Homemakers who assembled these lunches for family members preferred the convenience of the single-serve packs as they stored well until consumption and did not require the protection that unwrapped products taken from larger packs would have needed. Put simply, customers were well satisfied with what they had and were unwilling to change their habits for a marginally better taste experience. Another factor which can have a major impact is change in the realworld environment. An example of this was the catastrophic drop in consumption of beef and beef-based products in Japan when BSE (Bovine Spongiform Encephalopathy) was detected there. Having the best-tasting beef in the world didn’t matter as consumers simply refused to buy beef of any description.

Focus Groups Focus groups generally consist of eight to fifteen consumers who have been screened to meet criteria relevant to the concepts or products to be discussed. Additionally, as Kuntz (Kuntz, 1993) states, excessively dominant personalities are usually identified in the screening process and not used because a voluble, dominant person can monopolize the group discussion and not allow the views of others to be fully expressed. A worse situation occurs when two dominant personalities with opposing views surface in the group.

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Then the discussion becomes a battle for supremacy between these two, and nothing of the views of other participants is heard. The focus group is brought together in a meeting room with a moderator. It is the moderator’s job to first relax the group then introduce the concept or product being researched. Once discussion is under way, it is the moderator’s job to keep the group focused on the client’s needs and to ensure that the views of all participants are heard and that key points or opinions are followed up so that the maximum amount of information is gained. It is also the moderator’s function to wind up the discussion when no further useful information is likely to be gained. The length of time of focus group discussions will vary according to the complexity of the issues under discussion, the degree of interest of the participants, and the number of participants. However, anything more than two hours is usually unwarranted. Meeting rooms used for focus group discussions are often purpose-built with audio and video recording equipment and a one-way mirror to allow direct observation of the participants’ body language during the meeting. Subsequent viewing or listening to tapes of the sessions allow researchers to check on particular points and undertake a more in-depth analysis. Focus groups are very useful in the product process as companies can find out what support there may be for dramatically new and different product concepts before spending too much money on product development or investing in new equipment for commercial production. The technique also can provide valuable information on more mundane issues such as selection of flavor varieties, pack size and form, and even purchase price point. The advantages of focus group techniques over simple questionnaire-type surveys reside in the depth of information obtained and the ability to follow up issues or problems immediately. The success of a focus group rests on the clarity of the research objectives set, the ability of the moderator, and the skill with which the group has been selected. It is extremely important to keep in mind that more than one focus group session, preferably at least three, is required to get usable results and that focus groups are not a substitute for other techniques such as properly conducted in-home placement tests.

Postlaunch Tracking Postlaunch tracking is not used as often as it should be because some companies believe that their just-launched product is as perfect as they can make it and that its success or failure is a market whim. Products can always be improved, and postlaunch tracking is one means of improving products, especially at the stage between regional and national market rollouts. The technique involves identifying and interviewing consumers who have tried a new product, particularly those who have decided not to purchase it again. Repeat purchasers can readily be located by observation and interception at supermarket checkouts while dropout purchasers are more difficult

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to locate. One technique that works with both groups is telephone canvassing. Repeat purchasers are asked what they like about the product and why they have repurchased it while those who have discontinued use are asked what they found wrong with the product. Analysis of the positive responses allows market positioning to be fine-tuned and optimized while analysis of the negative responses can lead to significant product improvements. The value of postlaunch tracking is evident from the outcome of such a study on a range of frozen, stir-fry vegetable mixes. The mixes were launched in a major regional market with a high expectation of success because of their excellent in-home placement test results. Initial sales were very strong, but there was a rapid tail-off. Postlaunch research showed that the commercially produced mixes reaching consumers were significantly inferior to those laboratory-prepared samples used in the home placement tests. The major fault found was that the on-market products contained a high percentage of chaff, small broken pieces of vegetable. When prepared in the home, the products were unattractive in appearance, and the contrasting flavors and textures of the vegetables just did not show. Further investigation showed that there were two causes of the chaff problem. The first of these was that the product development team had used eight or nine different vegetables in each variety of the product with the aim of creating a deluxe image. Because of the differences in size, shape and density of the vegetables, the factory had found it impossible to create homogeneous mixes and had extended mixing times in an effort to overcome the difficulty. Of course, this only increased the amount of breakage. The other reason was the lack of protection provided by the package selected for the market. Some frozen vegetables are quite brittle, and the vibration and movement that is normal in product shipping caused further breakage. The product development team moved to remedy the problem by fundamentally reformulating the products. The number of vegetables in each variety was reduced to four or five with the most fragile materials being removed. The type of package was also changed to one that would provide more protection to the contents during transport. The result was a much improved product at store level in a much more up-market pack. The revised products were rolled out nationally at a price 10 percent higher than that charged in the regional test market. This was because the marketing department had decided that, even though production costs were virtually unchanged, a higher price was justifiable given the improved look of the pack. The revised products sold, on a per capita basis, at three times the best level achieved by the original products in the regional market.

MARKET-SPECIFIC SEGMENTS AND TECHNIQUES There are so many different markets that it would be impossible to cover them all. Therefore, this discussion will be restricted to just a few important and interesting ones.

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Children From six years of age, children are fully capable of making judgements and understanding and using scoring techniques including line scales. It is possible to work with children as young as four, but a higher degree of interaction is necessary, preferably one adult per child. Best results with these very young children are obtained by using pictorial scales such as the simple three-point scale shown in Figure 7.2 When working with children, remembering that they tend to be extreme in their judgements is important because they either like something a lot or dislike it a lot. While adults can be averse to rating a product as awful, children will quite happily mark it right down to the bottom.

Older Consumers Older people are forming a growing proportion of the population, and marketers are increasingly turning their attention to them. The most common approach is to develop and promote products promising specific nutritional or health benefits. Probably breakfast cereal manufacturers have been most prolific in this endeavor, and store shelves are stacked with products claiming to prevent or alleviate almost any condition. However, this form of market segmentation brings problems of its own. One of these is that each product is useful to only a subset of the total senior market and, therefore, sales volumes will be lower, and production costs higher than for whole-of-market products. A second problem is that most older people do not see themselves as old or sick and do not want their product purchases to suggest those characteristics to other people such as those in the checkout lines with them. The second approach used by marketers has been to formulate products with stronger tastes to compensate for the loss of sensory acuity in the elderly. While loss of sensory acuity does occur as people age, it is not uniform, and some seniors have better taste perception than people decades younger. However, launching stronger tasting variants of foods (for example, one claiming “Now with extra chili”) may be more successful with the senior market because these products are not promoted as being specifically for older people but are targeted at people who want extra taste in their lives. Obviously, teens and twenty-somethings will also form a large

FIG. 7.2. Acceptability testing of young children: simple facial expression scale.

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part, perhaps the major part, of the market for flavor-boosted foods and beverages. It is likely that a better and, therefore, more profitable approach to capturing and retaining the senior market would be for food manufacturers to concentrate on eliminating nonproduct barriers to usage of mainstream products. Appropriate actions might include: • Increasing the type size used on labels to make them more readable by those whose eyesight is no longer perfect • Reviewing and rewriting directions for preparation so that they are simpler and easier to follow • Making easy-open packs that actually open easily

Foreign Markets A few companies are globally successful with a single product or range of closely related products. The success of such companies often rests on three criteria: • A taste that is almost universally liked, chocolate being one example • Massive, long-term advertising and promotional support • The product or products satisfying emotional, possibly aspirational, needs For most companies, success in foreign markets first revolves around understanding and matching local taste preferences. This can be more difficult than it seems because it is sometimes very difficult to identify which specific taste and flavor components of complex sauces and fermented products are the prime determinants of preference. In some cultures this task is made harder when testing development products against their popular, locally made equivalents or trying to establish a degree of acceptability because of the reluctance of people to give offense by saying that a product tastes lousy. In tests involving ranking, many adult respondents will cluster everything in the moderately to well-liked sector. Often focus group techniques are very productive, but the group’s moderator must have excellent crosscultural understanding and skills to elicit real opinions rather than polite generalities. Besides the difficulties in understanding and matching local taste preferences, companies wishing to enter foreign markets successfully must be clear on things such as pack size and form preferences, price points, available media promotional options, distribution systems, and likely storage conditions. While large companies can and do succeed in foreign markets, many are caught between the expense in individually matching each country’s or region’s taste expectations and the cost savings from product formula standardization. For such organizations, it can come down to

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satisfying everybody and having forty slightly different versions of the one product or having four, suboptimal recipes. On the other hand, small exporters with low overheads and a high degree of versatility and comfort with small production run sizes can be very successful in supplying products to niche markets in foreign countries.

Segmentation Market segmentation was touched on when discussing products aimed at older people. To many food marketers, finding and owning a specific segment of a product category is like finding the pot of gold at the end of the rainbow. There are analytical techniques, often proprietary, available which can be of use in identifying such segments. One technique is sensographic segmentation which groups consumers by their different sensory preferences within a distinct product category. For example, one population subset might prefer peanut butter with a sweet, lightly roasted peanut flavor while another might like a saltier, more heavily roasted peanut flavor. The sensory research company, SensoMetrics, suggests (Anonymous, 2000) that such sensory preference segments, if they exist, can be detected by testing large numbers of consumers with a wide range of product variations. It is after having found such a segment and having developed products that consumers within the segment really like that real difficulties are encountered. The key question becomes one of how to attract consumers in the target segment to the product when they may not have even worked out the reasons for their taste preference. Where product thickness is concerned, marketers can use terms like “extra pourable” to indicate that a new product is thinner than others. For consumers for whom taste tests show that they prefer a saltier product, a label carrying the phrase “Now, even more salty” is not likely to be a purchase incentive as people know that excess salt may be bad for them.

Regular Benchmarking Some market sectors are highly competitive, being dominated by just a few, very large companies. In these, product improvement and new product development activity is intense. Companies involved in such areas have to regularly check their mainline products’ acceptability against that of their competitors. One such sector where this is the case is pet food, for these companies are always at risk if the palatability of their products falls behind that of their competitors. Product palatability is critical to products made for companion animals as the only way that an owner has to determine whether a product is acceptable is if the pet approaches the feeding bowl as soon as it is set down and starts eating with enjoyment. Any sign of reluctance to eat will usually mean that the pet owner will buy another brand. For this reason, pet

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food manufacturers test their products against competitive ones whenever the opposition introduces improved products and often run tests annually just to check whether there have been any unannounced improvements. Testing the palatability preferences of cats and dogs is relatively simple. Basically, samples of two products, each in a separate bowl, are presented to an animal simultaneously. The identity of the product first approached by the animal is recorded as are the amounts eaten of each of the products presented. First approach is a measure of comparative odor appeal, and totals eaten are a measure of the animal’s relative acceptance or enjoyment of each product. The numbers of animals used per test and the number of days over which they are fed vary within the pet food industry, but the basic test methodology is the same.

Packaging Tests The package in which the product is contained is a vital part of the total item as it is purchased. Packages can influence product quality, and sometimes the product/package interaction is not considered until consumer complaints start to flow in. There are two times when product/package compatibility must be assessed: when a new product in a new package is being developed and when a change in packaging material for an existing product is being considered. There are many methods for sensory examination of packaging odors and effects of these on foods and beverages. One source of information is the International Organization for Standardization, which has published a number of relevant standards. When looking for such standards, checking for standards in the process of development as well as published standards is also worthwhile. Equally, there are many publications on all other types of sensory testing, one of the providers of standard methods being ASTM International. Other organizations can provide additional useful material, for example, the American Statistical Association’s survey series.

NEWER TECHNIQUES New testing techniques are being introduced at a greater and greater rate. Also, existing techniques are being improved and modernized. Therefore, this section will provide a very brief look at a few techniques which are both scientifically interesting and are achieving, or likely to achieve, widespread use.

Electronic Noses Electronic nose technology is based on the use of specialized sensors which change in electrical conductivity when exposed to a range of volatile or gaseous chemical compounds. No sensor is specific to only one compound,

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but using a range of sensors which exhibit different conductivity values for individual compounds, the pattern of responses can be analyzed to uniquely identify what is present. The sensitivity and accuracy of electronic noses has been improved by using the sensors in combination with mass spectrometry. Actual and potential uses outside the food industry include air quality checks, pollution control, and detection of drugs and explosives. The food industry is using electronic noses for confirmation of origin of materials such as olive oil, inspection for common contaminants, quality control of finished products (affirmation that product odor is within a specified range), shelf-life determination, and product development (analyzing and matching the odor profiles of competitive products). It is probable that, with further sophistication and by correlation with human and animal sensory panel results, electronic nose technology will play an increasing role in product development and sensory analytical work.

Electronic Tongues Electronic tongue technology has followed the work done on the development of electronic noses. Again, a number of different sensors are used in combination. On exposure to different chemical compounds in solution, for example organic acids, the sensors respond to varying degrees by changes in their electrical conductivity or even fluorescence. By analysis of the patterns of responses, a taste profile can be built. This profile can include basic tastes like sweet and salty but can also extend to specific compounds such as bitter alkaloids. The electronic tongue has an advantage over the electronic nose because it can directly sense nonvolatile compounds in liquids rather than just the odors carried by gases such as those trapped in container headspaces. Use of the electronic tongue will be in areas similar to those described for the electronic nose.

Applied Sensory Neuroscience Fundamentally this technique involves the measurement of the electrical activity of different regions of the brain when a subject is exposed to an odor, flavor, visual, or tactile stimulus. Measurement of the magnitude of the response is made by means of a non-intrusive electrode array mounted on a lightweight helmet or headband. The aim of the research, some of which is being carried out at the Sensory Neuroscience Laboratory at Swinburne University of Technology in Australia, is to determine the true rather than reported response of participants to sensory stimuli. This would be of particular value in testing in regions and countries where social and cultural practices are such that oral and written responses are modified or inhibited. Further, this approach would allow large numbers of samples to be evaluated very rapidly.

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Real-Time Testing Wireless technology already makes real-time response of testers possible. For example, consumers taking part in a survey or taste panel in a shopping mall can view questions and input their answers on individual laptop or notebook computers that transmit this data to a central computer for analysis. Advantages of this method include: • Removal of the potential for bias that might be induced by human interviewers • Elimination of data errors during transcription • Ability to follow particular lines of inquiry or sample offerings with individual panelists depending on their responses to previous questions Obvious further developments are to extend this approach to in-home placement testing by such means as coupling a laptop computer with a mobile telephone.

Matrix Analysis Matrix analysis is a mathematical technique which is used in experimental design and modeling. Its use in the food industry has largely been confined to process simulations such as those for sterilization of foods. Besides process simulations, the technique can be used in product testing where a large number of variables are required to be evaluated.

COST CONTROL There are various ways to control product and concept test costs, the most obvious being not to carry out any such testing. This approach is most often advanced by chief executives or owners of small-to-medium companies who believe they know exactly what their customers want and state that their organizations have succeeded without any such fancy techniques. It is true that some small companies manufacturing niche products are very close to their customers and are successful. However, initial success generates growth and satisfying an expanding market requires investment. It is at this point that many small enterprises fall over because they are not prepared to change their ways of doing things. Product and concept testing are means of improving the chances of on-market success, and it is a very brave (or foolhardy) person who will do without them.

Worthiness of the Development Project Before looking at ways to save money on product and concept testing, it is worth considering whether the development project is truly worth doing. This is sometimes the case where organizations get caught up in cost-reduction

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mania and projects with no meaningful payback are undertaken. As an extreme example, the purchasing manager of one food manufacturing company demanded that the product development department carry out an evaluation of a replacement flavor for one of the company’s beverage products. The beverage variety in question was the lowest seller in a range of three, and the proposed replacement flavor was only 5 percent cheaper than the original one. A quick calculation showed that the expense of the development work, difference testing, and shelf-life testing was such that it would take, quite literally, fifty years to recoup these costs. Needless to say, the product development manager refused to carry out the project.

Basic Cost-Control Steps There are four main ways of controlling test costs: • • • •

Concentrate only on essentials Use the do-it-yourself approach Use only truly expert research organizations Spend early rather than later

A major reason for cost overruns when testing products and concepts is because like-to-know items are added into the research brief. It may be interesting to know more about consumers’ opinions, to test preference for additional but unlikely varieties, or to test all across a competitor’s range, but it all adds to the bill and rarely provides really useful information. Before undertaking or commissioning any testing, get agreement from all departments involved on these points: the objective of the research, the key issues arising from those objectives, the questions that need to be asked (and answered) to decide those issues, and the types of research that will be most appropriate. Note also that retesting when the original results were not what was hoped for is like questioning the referee’s decision: almost always useless. While large companies have large research budgets, smaller organizations must be more prudent. The option of running some of the simpler forms of consumer testing oneself rather than using an outside agency becomes appealing. As an example, it is relatively easy to locate people satisfying particular demographic criteria by drawing from parents, senior citizens, sporting and service groups, and clubs and use them in preference and acceptability tests. Usually a local hall is hired as a venue, the organizations providing the panelists are given a suitable donation, and individual panelists are rewarded with a small gift. When setting up such tests, it is important to run them according to accepted test protocols. Also any company planning to run their own tests should check with its legal and insurance agencies first so that issues such as liability and privacy are fully understood and covered. As well, it is essential to check with prospective panelists on health issues such as allergies before permitting them to participate.

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When using outside agencies, companies sometimes put price ahead of expertise in selecting the agency to carry out the work. Getting something cheaper often means getting something inferior. As an example, a major cookie manufacturer selected a research company to check the acceptability of a new cookie. The selection was made on price and the promise of rapid results rather than reputation. Quite by accident the cookie manufacturer found that the research company had set up a mobile unit at a large shopping mall and was running the acceptability tests on shoppers selected at random. For many products this approach is good, but the problem was that the product in question was a cookie specially designed for children in the four-to-ten-year age group. Obviously, the results obtained from this invalid research were worse than useless, and the agency was never used again. It is always much better to use research agencies with demonstrable expertise in the tests to be run. In an effort to save money, companies carry out little if anything in the way of preliminary testing, instead relying wholly on the ability of their product development team. Eventually when testing, usually in-home placement, is done, the product can be found to be seriously deficient. This wastes both money and time as the product development process has to be repeated almost from scratch. One relevant incident occurred in a very large company when a young and very enthusiastic product development team was given the task of developing a curry sauce. The team worked diligently tasting and adjusting prototypes constantly. However, they neglected, and were allowed by company management to neglect, simple in-company paneling with noninvolved company personnel. When the final prototype went to in-home placement testing, it was rejected by almost all consumers as being far too hot in flavor. What had happened was that the palates of the development team members had become habituated to curry heat. and they had consistently increased the level of curry in the prototypes as they moved along. The lesson is that a little early testing with consumers, even if they are company staffers, can provide a reality check which will help to keep a project on track.

Focus Group Alternatives Focus groups are expensive, partly because of the cost of setting up and maintaining the specialized meeting rooms. There are two alternative means of operating focus groups which can be done at lower cost. One of these is to set up the focus group meeting as a teleconference. This is particularly advantageous where a highly specific group such as buyers for a retail chain need to be brought together. Using a teleconference means that travel and accommodation costs are avoided and the group members give up only the time for the actual meeting. Teleconferences also allow anonymity of participants (to each other). This can be helpful where sensitive subjects such as

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patterns of alcohol consumption are to be discussed. The disadvantage of this method is that any printed material (for example, advertising story boards) or product samples must be distributed beforehand. The other method is to set up a suitably protected website and have participants access and comment in real-time. This approach again allows participant anonymity but also allows visual material such as video clips to be used. One disadvantage of this approach is that people who are comfortable interacting online are unlikely to be fully representative of the total population. Another possible disadvantage is that nonparticipants may access the site and disrupt things. However, there are Internet security measures which, by and large, eliminate this possibility.

SUMMARY Concept and product testing are an essential part of the product development process and, properly carried out, will substantially increase the chances of market success. The key features of good concept and product testing rest on these criteria: • • • •

Defining research objectives carefully Concentrating on what is essential to know rather than nice to know Keeping in mind that consumer preference is critical Remembering that the product itself is only part of what the consumer considers when making a purchase or repurchase decision

BIBLIOGRAPHY Anonymous. “Sensographics.” Newsletter No. 28, SensoMetrics Pty. Ltd., Sydney. 2000. Anonymous. New Products and Services. Washington, DC: Food Marketing Institute, 2001. Anonymous. Supermarket Facts: Industry Overview 2000. Washington, DC: Food Marketing Institute, 2001. Kuntz, Lynn A. “Making the Most of Focus Groups.” Food Product Design. September, 1993. McBride, Robert L. Psychological Basis of Sensory Evaluation. Edited by R.L. McBride and H.J.H. MacFie. London: Elsevier Science Publishers, 1990. Meilgaard, Morten, Gail Vance Civille, and B. Thomas Carr. Sensory Evaluation Techniques, 3rd ed. Boca Raton, FL: CRC Press, 1999.

8 Case Study: Introducing a New Flavor and Color Ingredient Catherine Side, MA, MSc, FIFST, Inside Consulting

INTRODUCTION As the team member active in the business development, it fell to me to produce a case study for symposium delegates to work on, but with the proviso that I should not use the seminar as a sales platform. Thus I selected an ingredient that has limited niche market opportunities to see what delegates would choose to do with it. In this chapter I give a background to the product and its benefits, and then set some questions for readers to consider. I summarize the answers given by the delegate teams and finally show what really happened when the product was introduced, with some explanation and interpretation.

SAFFRON AND SAFRANTE™ The ingredient studied was Safrante™, the innovative creation of a Spanish company which already has an approximately one-third share of the world market for saffron. Some background follows. 95

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Traditional Saffron Saffron consists of the stigmas of crocus flowers which are grown in Eastern countries; it has been used for thousands of years to provide flavor and color in many recipes, notably rice dishes from India, Indonesia, and Arab countries. Some regional specialties would include saffron cake in parts of Wales, paella in Spain, and a variety of soups in France. Saffron is expensive to buy but has a unique place in the spice repertoire because of the subtle flavor and color properties it imparts to food. Saffron is easy to use (a few strands are added to the water in which the food is prepared), but saffron has low solubility, so the extraction during cooking is extremely inefficient. Ground saffron is also offered for sale; it has slightly better solubility but is resisted by users because of the opportunities for adulteration with inferior materials and even total substitution with other cheaper products. The grades of saffron are Mancha with greater than 200 color units, (with subgrade Coupé regarded as the very best), then Sierra (120 color units) and Rio (90 color units). Fake saffron from gardenias (crocin color), capsicums (paprika), and even vegetable matter dyed with artificial food colors are widely offered for sale. Because real saffron has to be handpicked and is so fluffy (170,000 flowers are needed to make 1 kg of saffron), the price is high: in the range £350 ($550) per kg. The world market for saffron runs at about 160 tonnes per year of saffron strands or their equivalent. Faking saffron with cheap materials is an obvious way to make quick money if you can fool your customer.

Why Safrante™ Was Developed To demonstrate the insolubility of saffron itself, a few strands can be added to cold or hot water and the color observed. It takes fully twenty hours to reach maximum color and flavor extraction. Any normal cooking process might extract 30 percent of the relevant compounds from the strands, and the rest is wasted. The inventor of Safrante™ saw the opportunity for a saffron extract which was completely and instantly soluble in hot or cold water, and he went on to make just such a product by purely physical processes (a patented freeze-dry extraction). Despite the add-on costs of processing, Safrante™ is much more cost effective to use. The Safrante™ extraction is complete so the dose rate can go down to around 30 percent of that of saffron strands, and the usage price drops to around 50 percent. Effectively, the insoluble plant material in saffron strands is replaced in the production process by soluble maltodextrin (a source of maltodextrin free of genetically modified material has been identified and incorporated). A user would get all the benefit of saffron, pay just half the price, and have a clean label declaration of “Saffron Extract and Maltodextrin.”

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Other Potential Issues Surrounding Safrante™ There are no legislative barriers to the use of Safrante™ in Europe or the U.S., and the label declaration is straightforward. Storage and packaging do not present any problems, as long as the powder is kept dry prior to use. Safrante™, like saffron, is light- and heat-stable. A further product, Safrante-Amber™, has been developed with only the coloring matter of saffron and little or no flavor; it is offered at a further 30 percent discount from the Safrante™ price. I noted in my introduction to the symposium delegates that there was some research to show that the polyphenols in saffron (and, therefore, also in Safrante™) had some cancer-preventative effect. The amount of research is limited and it would be too early to legitimately promote the product as a functional ingredient.

Use as a Natural Color Safrante™ is supplied as a concentrated powder which can be used as a saffron replacer. But it is also a natural color, and in comparison to other natural yellow and orange colors (turmeric, paprika, and annatto), the cost of use is in same range, particularly if Safrante-Amber™ is used. Opportunities in nontraditional saffron areas are, therefore, apparent—for example, in soft drinks and sweets.

DELEGATE EXERCISE Delegates were divided into groups of approximately ten and were given the opportunity to examine a variety of products, specifications, publicity materials, and other data and were invited to consider some of the following questions, or their own questions. • How was Safrante™ developed? Should it have been done a different way, or should events have taken place in a different order? • What could be done with Safrante™ for home use, restaurant use, and production in food factories? • What sort of packages should be offered? • What would be the marketing mix (packaging, pricing, promotion, etc.)? • What new products could be produced with Safrante™ by the delegates or their customers? • What new market areas might they approach? • What sort of marketing effort would they put into the project (number of sales people, promotional investment, or advertising)? • What sort of sales volumes did they think might be generated?

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• What would be realistic time and sales objectives? • What would be their press strategy? • What would be the likely customer reactions to the products themselves and the food products containing Safrante™? Teams were asked to nominate a spokesperson and to report back the following morning, using acetates or other presentation materials, and to present the findings in four-minute slots to the whole group (approximately seventy delegates and nine speakers).

THE PRESENTATIONS All the groups were highly optimistic about the potential for Safrante™.

Group 1 They decided to develop a marketing plan and they first showed a summary of what they had learned. They decided that target markets were food manufacturers, food ingredient distributors, wholesalers, brokers, and pharmaceutical companies. The uses would be in flavoring, coloring, and as a spice and health food ingredient. For marketing strategy, they would hire an agency for the promotion of Safrante™ and perform a consumer education campaign on saffron, complete with production and growing details, and then move to Safrante™ to show the new product concept. The campaign would involve billboards, new product sections in ingredients magazines, trade shows, food shows, food magazines, demonstrations in food and beverages, free trial samples, TV, and radio. Their goal was to capture 10 percent of the saffron market for Safrante™, within one year. In Month 1 they would do the market research and establish the market size and breakdown; then they would do test marketing in Months 2–3. Production would start in Month 3 and continue throughout. Advertisements and promotion would begin at Month 3, and then launch would be in Month 4, with sales beginning also in Month 4.

Groups 2–7 Other groups had similar highly ambitious approaches to the market although none of them showed in great detail to which products they would add Safrante™ or what new products they might develop with food manufacturers. One would set up a distribution through partnerships and joint ventures, sell the first $1 million in two years and retire on the proceeds in the third year.

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Another group particularly targeted those sectors of the market where faking was rife. (Unfortunately they were not able to say how they would locate this market sector, for it would indeed be useful information.) They also had a very ambitious sales plan. A third group added cosmetics to the plan and would take a royalty on sales. The next group decided to focus on nutraceuticals and expected to take 10 percent of the saffron market in a very short time, with more sales in traditional natural colors areas soon after. Another group introduced the concept of selling Safrante™ into the textile industry for those people who like naturally dyed fabrics for their clothes. They would also target cosmetics. This group had worked overnight to make a PowerPoint presentation on a laptop computer, featuring their proposed website for Safrante™—a beautiful piece of work! The final group was very specific on its target list of company types and would work with a well-known chef to promote Safrante™ through recipes and appearances on TV and at trade shows. With aggressive pricing, this group would attain sales of $3.25 million in the first year.

WHAT ACTUALLY HAPPENED How Safrante™ Was Launched After the product had been invented, the inventor’s colleague took a small booth at FIE (Europe’s major food ingredients show) in November, 1999, and promoted Safrante™ to the world. Given my background in the marketing of natural colors, some experience of working with Spanish companies, and a knowledge of the U.K. market, I suggested to him that I take an agency for the U.K. This was agreed, and a month later we met in Madrid for exchange of information and samples. He also passed me a handful of leads from the show, parties who had visited the booth and expressed interest. Simultaneously he set up an agreement with a U.S. color supplier to cover the North American and Japanese markets. I would work in a sales consultancy capacity with supplies directly from Spain to the customer, and the U.S. company would stock the product and perform its own invoicing. Rewards would be on a commission basis. Product was already available in three strengths and offered in bulk packaging and in take-home packs of three sachets in a box. These latter packs retail for approximately $2 in Spain and are sufficient to prepare three dishes (such as a paella or a pot of homemade soup). For market research I identified key sectors of the U.K. market already using saffron—ethnic food producers, flavor houses, major groceries and supermarkets, and restaurant supply companies. Likely products in which Safrante™ could be included seemed to be ethnic foods such as Indian naan

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breads, pasta and pasta dishes, and part prepared rice dishes (Indian, Indonesian, etc.). We also looked at the repack market for supermarket sales to the public and the premix market with flavor companies. The U.S. company thought up a new package: the one-ounce shakers—a typical spice bottle with perforated lid for minor additions to dishes. These would be packed in trays of twelve and promoted to restaurant supply companies. We also contacted some TV chefs. We compiled a sectorised target list and performed a large amount of sales work—phoning, sending samples and information, making follow-up calls, and making visits. In addition I sent press releases to all the food magazines and wrote a big color article for International Food Ingredients, syndicated it and distributed offprints. It was our reasonable belief that significant numbers of companies would want to save money in saffron, with the security of dealing with a reputable supplier and a guaranteed authentic product. We had expectation that the success of the saffron replacer would provide the impetus for the acceptability of Safrante™ as a replacement for other natural colors. After all, it has light and heat stability, which is not true of annatto, crocin, paprika, lutein and turmeric, which are the established orange and yellow natural colors.

Results of the Sales Effort At the time the symposium was given, the straight answer was that after some eighteen-months effort, time investment, and a large number of free samples and supporting information, no sales at all had been made in the U.K., and only trivial amounts had been sold in the U.S.A. to restaurants and pasta and ethnic food manufacturers. However, there had been some more significant sales in mainland Europe in the area of pastas and ethnic foods. The sales volume might amount to $10,000 in the first year. Marketing costs and investments would probably amount to three times that figure. If you include the cost of development and patenting, the investment might run to $50,000. Subsequently the effort in all markets has begun to pay off, and sales have been made in almost all the above-mentioned food sectors. There is still a long way to go. So far, promotion in pharmaceuticals, cosmetics and textiles has not taken place, and the replacement of other natural colors is not yet developing. There is much left to do in saffron replacement and in continuing to build credibility.

What Lessons Should Be Learned? There are many lessons to be learned from this exercise. The inventor clearly performed a good job in developing Safrante™. In the past, people had tried to develop an extraction technique for saffron

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simply for evaluation purposes, and they had repeatedly failed to achieve a satisfactory process. So it was not an easy job, and the decision to patent the process reflects this. However, no specific market research was performed prior to inventing the product; the inventor and his associates in the company just had a general feel for the market, having worked in saffron for many years. The product development was done without identifying specific market opportunities and, therefore, a critical step was missing. Product development should include multidisciplinary inputs from the generation of the concept all the way through to market launch. However, this exercise did require the invention first. In other words, it would have been impossible to do market work before the invention because the team would have met the technical-barriers-too-high syndrome. This is a good example of a breakthrough invention and then the difficulty in making it work. Perhaps the most significant lesson learned was the entrenched resistance that established saffron users and small dealers have to anything new, especially if it might alert them to the real or imagined possibility of adulteration. Despite our clear statements, certification, obtaining of registrations, and so on, the official saffron market did not want to know about saving money, legitimately or otherwise. In summary, major users such as chefs and fancy food preparers, felt that if there were no strands, it wasn’t saffron. I even received hate mail from an old family company claiming to be a leader in quality saffron supply to restaurants and fine people everywhere! Considerably more time needs to be spent with existing and potential saffron and Safrante™ users to really understand their needs. However, this is not necessarily a realistic aim since there is a high risk of investing a lot of time for possibly no result on our part; it also remains difficult to persuade potential users that any time they invest in talking to us is worthwhile. Our intention remains to replace saffron with a cleaner, cheaper, easier, but totally wholesome product format, Safrante™. It is going to be a long process. Although saffron is expensive, the cost in package is dictated more by the cost of the box than the cost of the saffron contained in it. The same goes for a manufactured food product: the cost of the saffron (or now the Safrante™)is still only a fraction of a percent of the total, and savings are often not significant when compared to other areas susceptible to cost reduction. Perhaps an alternative position would be to offer Safrante™ at a higher price than saffron, emphasizing the ease-of-use and establishing a niche market that way. It is probably too late to contemplate this approach now that the market is aware of the product. What about the other target areas—for example sales to food manufacturers for incorporation into soups, cakes, and other dishes? Those sales are now developing, and a major lesson must be noted in that sales can take a long time, sometimes longer than you ever imagine is possible. It is particularly important that product development people (particularly those developing novel ingredients rather than finished goods) understand this and not

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have unrealistic expectations of their marketing colleagues. In the real world, manufacturers have to embrace the concept and understand the ingredient first. Then the ingredient must be available on the shelf in the product development lab when the demand comes round. In Britain these days, many products are developed for a particular customer, (often a supermarket) and the products must be developed in very short time periods. Your ingredient must be known and on the lab shelf ready to be used; there is no time to research the potential ingredient and wait for samples to be sent once the project is started. Effort has been made in small pack distribution and restaurant supply with the one-ounce shakers, and this is beginning to look more promising. A lot more work is needed for widespread penetration. The main problem here is finding and convincing the intermediate companies (restaurant suppliers) to stock and promote the item. Individual sales directly to restaurants would be too costly to administer. And what about promotion? There is some product recognition as a result of the press coverage, but again much more work needs to be done. Perhaps it is time to take advice from the symposium delegates’ responses and spend $1 million on promotion to earn the first $3.5 million, and then retire. Or perhaps by now we all recognize that this is a special niche product with good prospects but limitations. An advertising campaign is unlikely to pay back. I thank the delegates for their contributions and hope that they won’t lose their shirt on anything similar in real life.

9 Food Safety Systems: Anticipating Production and Integration into the Process Richard F. Stier, Consulting Food Scientist

INTRODUCTION Food laws and regulations throughout the world mandate that manufacturers of foods and ingredients produce safe and wholesome products. The products that are manufactured must be of acceptable quality and be produced at a reasonable cost. If they are products manufactured for the retail market, they must be appealing in another way; consumers must feel comfortable with the products that they buy. They must also meet a consumer need, whether that need is for fresh, organic, or healthy products or for one of the dozens of other criteria that determines what people purchase. This is why there has been such an expansion of products such as fresh-cut vegetables, fresh pastas, and organic foods. Consumers are willing to pay for these value-added products, believing rightly or wrongly, that these products are better for them and more flavorful. This quest for fresher foods has created more than one headache for food scientists and, unfortunately, more than one public health issue. If there is a concern, whether real or perceived, 103

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about a product’s health or wholesomeness, the product will be rejected by the consumer. So the question is, where does the processor draw the line? How can an operator determine what kinds of processes and/or formulations will provide consumers, institutional users, and industrial customers with the products they want, but without laying themselves open to risk. The answer is building safety into the process. Assurance of safety is a combination of sanitation, understanding the microbiology, good manufacturing practices, good production practices, and proper packaging. One tool that will be addressed at length later is the microbiological challenge study. This type of study is a key element for evaluating changes in formulation and also checking processes designed to inhibit the growth of microorganisms, thus minimizing or preventing spoilage and assuring food safety. It is an essential tool when it comes to evaluating formulations that incorporate so-called hurdle technology. The main goal of challenge studies is the determination of the combination(s) of process, formulation, and packaging which will provide the processor with safe, wholesome, and high quality products. But first, the stage needs to be set for assuring the safety of new products. Remember, food safety is the law, whereas quality is negotiable.

FULFILLMENT OF THE MISSION Bringing a product to market is, as has been emphasized in throughout this book, a team approach that requires proper planning and coordination of all the parties involved in the development process. Management needs to provide support for product and process development and foster an environment where the individual groups responsible for bringing products to market can work together for the common good of the company. This seems like a rational and common sense approach to doing business, but all too frequently it is forgotten. Instead of cooperating, we often find marketing, sales, R&D, production, customer services, and others in competition with each other. The chances for success are much higher if R&D, marketing, production, and all others, including a company’s food safety team, work together toward a common goal. Management’s responsibility is to provide the environment in which departments can work together effectively. Rather than address the whole development process, this chapter will address the food safety component only. In a recent article in Food Safety magazine, Larry Keener wrote at length on why Hazard Analysis Critical Control Points (HACCP) systems fail. He placed the blame in two areas: doing HACCP backwards and failing to educate properly those responsible for developing, implementing, and maintaining the plans. Keener defines doing HACCP backwards in several ways. One is the development of HACCP at the plant level by persons who are involved in production but do not have the necessary skills to properly do the work. A second is retro-

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fitting HACCP plans into existing HACCP models. In large operations with a corporate entity, doing HACCP backwards indicates that HACCP development was conducted at the plant level, not through the corporate quality and safety staff. Because the persons in the manufacturing units are usually production-driven, HACCP plans which are developed may be flawed. Rather than assure safety, they may only impart a false sense of security. Keener urges that “HACCP should be driven by the company’s food safety department in conjunction with research and development (R&D), marketing, quality assurance (QA), packaging and other corporate functions.” The individuals at this level should have the expertise, knowledge of company infrastructure (including suppliers), and an appreciation for the business as a whole to do the needed work. Keener suggests that corporations employ (what he calls) the product development funnel, which involves integration of food safety into the product development cycle. It follows the basic HACCP principles, which have been adopted worldwide, and helps to assure that new or improved products that have passed through the various gates (Figure 9.1) in the funnel are safe and wholesome. We will talk more about HACCP later. Keener’s approach is sound when working on the corporate level, but there are many small operations which do not have the necessary corporate support structure. Small companies are still required to manufacture foods that are safe and wholesome and may be required by law or market pressures to have a functional HACCP program. If small operations do not have the internal expertise available to large corporations, they must go outside for training and the necessary expertise. They have to do HACCP at the plant level, so either they make a commitment to education or they turn to consultants, university extension, their trade association, or the government. Such companies are often forced to “ . . . do HACCP backwards . . .” (as Keener has said) because of their business environment. Another possible source of help, which is often overlooked, is the industry itself. As an example, Dole Fresh Vegetables has realized that it is in their own best interests to provide information to the industry, including their competitors, on food safety issues. There are a large number of small companies in the fresh-cut industry, and Dole fully understands how the problems of their competitors can adversely impact their business; hence, they encourage education.

SAFE AND UNSAFE Hundreds of new products appear on the markets each year, and as you have heard, the vast majority of them fail for one reason or another. The new or improved products that appear on the shelves each year differ not only in formulation and appearance but also in what needs to be done to assure safety. The risk potential varies from product to product across the

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FIG. 9.1 Generalized product development and food safety funnel.

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range. Hazards will be greater in meats, poultry, seafood, dairy products, or minimally processed products, whereas formulated foods like snacks, cereals and pastries are usually fairly safe. Ingredients like fats and oils, sugar, starch, or gums are also fairly safe. Potential hazards inherent in a product affect not only how a processor must view safety but also how it is viewed by the regulator. Meats are rich in protein and a source of a wide range of microorganisms, including those of public health significance. This is one of the reasons that HACCP has been mandated for the meat and poultry industries and why there is such an interest in alternative methods of processing or in-package processing. Food safety is one reason why food irradiation is finally gaining acceptance. New treatments such as the SureBeam process (developed by Titan) are being utilized by more and more operators. Also, consumers finally seem to be coming to the realization that microbiological food safety is a real issue and that meat treated with ionizing radiation will be safer. The true facts about ionizing radiation may finally be overcoming the fear of the word irradiation with all its unnecessary negative connotations. US Agriculture Secretary Ann M. Veneman recently suggested that all ground meat destined for use in the school lunch program be irradiated. Her rationale was that it would be safer and would eliminate the need for testing. Unfortunately, this became a consumer issue, and the important technical, safety, and economic issues were lost. As noted earlier, most ingredients such as fats and oils are very safe. The oils used in processing and those sold on the grocery shelves are very pure products: 98–99 percent pure triglycerides. The few minor components will not affect the safety of the product. The vast majority of these oils have also been refined, bleached, and deodorized, which makes them safe for everyone, even those who are allergic to the seed or plant from which they are derived. This was described by Hefle and coauthor in Food Technology in 1999. If a processor decides that he wishes to formulate a product using pressed oils, there will be a safety concern due to the possibility of residual protein in the oil. This is why processors need to understand their raw materials and the sources. Noting the importance of the allergen issue, the Food and Drug Administration has recently declared war on allergens through a series of initiatives which are science-based and which have garnered support from the industry. The food industry, especially those manufacturing seemingly safe products, must not become too complacent, however. Problems happen even with products perceived as safe. Nationwide attention was directed at a multistate outbreak of Salmonella argona. The food responsible was a toasted oat breakfast cereal which had been contaminated with the pathogen. The baking process for the cereal would be expected to kill the pathogen, and the product is dry, so it should not support growth; the problem was, therefore, most unexpected. Foods can also be contaminated after

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processing, so all processors need to maintain good sanitary practices. Good sanitation is a HACCP prerequisite. As all food processors know, Murphy’s Law applies to them too: “Anything that can go wrong, will go wrong.” Building safety into the system is economic good sense. It protects your products, your reputation, and most important, your markets. We should also remember another form of Murphy’s Law. “There is never time to do it right, but there is always time to do it again.” If food safety is not done correctly the first time, you may not get a second chance. So, as food scientists, we need to provide the tools for the integration of all disciplines to assure the development of safe and wholesome foods through proper planning. In other words we must do it right the first time. Safe food is the top priority, and it is the law.

HACCP: A QUICK OVERVIEW Although this chapter is about product development, not specifically HACCP, it is essential that we touch on HACCP and HACCP prerequisites in order to assure safe food in the development process. Prior to initiating a program to develop and implement a HACCP plan, the processor must have a series of basic prerequisite programs in place. These are as follows: • • • • • •

Good manufacturing practices (GMPs) Sanitation standard operating procedures (SSOPs) Product identification and coding systems Product tracking and recall programs Preventive maintenance programs Education programs for management and staff

Without these, a processor should not even think of proceeding with HACCP plan development. These are the foundations of food safety and quality, and if they are not properly developed, implemented, maintained and monitored, the HACCP plan will be compromised. Both the seafood and juice HACCP regulations include the six prerequisite programs noted above. For example, improper cleaning may allow the development of biofilms, and pathogens exist which will form biofilms. If biofilms do develop, a more rigid cleaning program than normal will be needed to assure their removal. If these films contain microorganisms of public health significance, the products manufactured in that system may become unsafe, even if a HACCP plan is in place. Failures in these basic programs will compromise the plan. Because HACCP is a systems-approach to food safety, all operating groups within a company or organization should be involved in developing

FIG. 9.2 Flow diagram for HACCP implementation. 109

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and implementing the plan. There needs to be a team leader or coordinator, however. Although this is not mentioned as one of the twelve steps shown in Figure 9.2, it is an essential element in the program. The team leader should normally be appointed or hired by management. If appointed internally, the team leader should be someone who has some background in HACCP. If the team leader is a consultant, he or she should not write the HACCP plan but should serve as a facilitator in its development. The team leader should have the following basic skills or knowledge: • Practical experience of working in or with food processing and handling operations. • A basic knowledge of microbiology and foodborne illness. • An understanding of good sanitation, good manufacturing practices, and industry operations. • A basic understanding of chemical and physical hazards. • An understanding of the equipment and means to control or eliminate potential hazards in a food plant. • An ability to communicate this knowledge effectively. One of the most important roles of the team leader is to assure that each member of the HACCP team fully understands how HACCP works, and will thus probably have to conduct some in-house training.

Assemble HACCP Team The next step is to set up the HACCP team. As noted, HACCP is a systems approach to food safety, so the team should reflect the system or wholeplant operation. The team should, therefore, include representatives from throughout the plant or operation. Among the groups who should be represented are R&D, quality control/assurance, engineering, production, receiving, warehousing, shipping, and purchasing. Having a backup from each group is also a good idea. By doing this, not only will more people receive the basic training in HACCP, but also someone from each group within the company will likely be represented at each HACCP team meeting. In countries such as the United States or in Europe where there are labor unions in most food plants, including one or more union members or the shop steward on the team is also a good idea. This is necessary because the essence of the program is monitoring and control. Operators or line staff are frequently assigned the responsibility for taking a measurement and signing off on their work. Some union people will fight against responsibility. The union will be more prone to support HACCP if members are convinced that it is a tool to conserve jobs and enhance benefits. Purchasing plays an integral role in the HACCP program, so including a representative is essential. Companies should be allowed to purchase only

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from approved suppliers, and the purchasing department will be responsible in part for assuring that these suppliers meet established specifications. The purchase of substandard materials will often create more problems than the savings warrant. The team leader must be sure that team members and their backups fully understand HACCP and its principles. As noted earlier, the team leader should initiate in-house training programs or be sure that the money is allocated to send the team to off-site classes. One of the primary causes of HACCP failure (as cited by Keener) was poor education. The ultimate goal of the HACCP team is to develop a HACCP plan for the whole operation, that is, all products and lines. At first this may appear to be a monumental task, and it will entail a great deal of work. The members of the team will find, however, that as they work together and plans for products or lines are developed, that there will be a great deal of repetition. Ideally, a basic plan may be developed for one product that can be utilized for more than one of the products being manufactured. Line extensions or additions to a product line may be able to use basic plans with only slight modifications for each product. It is important, however, that the program developed for each product within a product line be validated to assure safety. To develop confidence and help the team better understand how HACCP works, the team leader should select just one product or one line to work with in the first instance. Then the leader should select a line or product in which there is a high probability of success for the plan which is developed. Nothing breeds confidence like success, so the greater the chance for success, the more enthusiastic the team will be. The team will then develop the plan for this particular line or product. They will follow the basic principles we have described and devise a program that will assure the safety of the product(s) being manufactured. They will list all ingredients, packaging materials, and other components of the product, and prepare a detailed flow chart describing how these materials flow into and are incorporated into the process. The next step is simply to set up the plan, applying the basic principles.

Describe the Product The HACCP team must fully describe each product. This description should include its formulation, its manufacturing and packaging processes, its distribution method, and the potential for abuse during distribution or by consumers.

Identify the Intended Use and Consumers of the Food The HACCP team must determine how and by whom the food will be used. Of primary importance is whether the food will be used by a group who may be more susceptible to illness or injury. Such groups are the aged

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or infirm, infants, or the immunocompromised. Foods destined for institutional use would be of greater concern than those targeting the adult market. The same applies to infant formula or baby foods.

Develop a Flow Diagram That Describes the Process The HACCP team must then develop a process flow diagram. This flow diagram should begin with the ingredients, raw materials, and packaging materials as they enter the plant, proceed through the process and go through the steps after processing and warehousing. Having the team insert all process parameters (times, temperatures, etc.) into the flow diagram at this time is recommended. This is essential because one or more of these parameters may be necessary to control a hazard. During this step the team should make an effort to incorporate items such as employee practices and traffic flow into the diagram. The team should also make recommendations as to what should be incorporated into the prerequisite programs to help build the foundation for food safety. A less-detailed flow chart may be used when sharing a plan with a regulator or client. When developing the plan, the more detail, the better.

Verify the Flow Diagram The HACCP team must then visit the plant to confirm the flow diagram they have created. This may be accomplished by simply watching operations. The team should compare the existing flow diagram (and make corrections as needed) against operations at all times of the day. For example, is the night shift following the same practices as day shift?

Develop the Plan Using the Seven Principles The seven principles will serve as the basis of developing the plan. The HACCP team will quickly learn that there are seven interrelated principles. They must work together for the plan to be successful. Once the plan has been developed, the team is responsibility for providing the proper training for line staff who will be involved with the program, whether those line staff members are monitoring critical control points (CCPs) or taking records. Consulting with line people during the development stage is also a good idea. These people tend to understand the products and the equipment they are operating better than most and can provide valuable insights into the plan. The team may also find that existing monitoring programs may need to be upgraded or realize that new equipment is needed to do the job properly. This refers back to management support. If management is behind the program, they should not grudge the purchase and installation of tools aimed at assuring product safety, assuming that the tools are reasonably priced. A common mistake made by people who have

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just begun working with HACCP plans is including too many CCPs. If your plan has more than five or six CCPs, take another look at what you have done. If there are too many CCPs, the potential for system failure rises. After training the line staff, the plan must be tested. Monitor how well it works and make changes if needed; be sure to keep records of what is done. What everyone must remember is that HACCP is an evolutionary system. It should not stagnate but should grow as the operation grows. If you discover over a period of months that a CCP is unnecessary, it can be eliminated providing that the data supports its elimination. As noted, it is absolutely essential that the HACCP team keep records of the steps that are taken during the development phase of the program. This history will be extremely useful as new lines or products are added, and may prevent repeating mistakes. When developing the HACCP plan, the team members may realize that they need more information to do their job. Specifically, they may not know how the process affects pathogens. They may need to conduct studies to determine what will happen to the product if there are pathogens present. Will the pathogens be destroyed or just inhibited? Studies to validate the HACCP plan will be required. These challenge studies are often an essential part of the development process and can be used to evaluate the effects of the process on both pathogens and spoilage organisms.

HISTORICAL PERSPECTIVE Humans have effectively been doing challenge studies for millennia. However, the development of the term hurdles led many food processors and microbiologists to believe such studies form a new way to preserve and protect foods because the methods by which the hurdles inhibited spoilage microorganisms were not understood until recently. Drying, for example, has been known for centuries. Tomb paintings and grave goods in ancient Egypt have shown that drying fruit was known 5000 years ago. Egyptians created a hurdle to prevent spoilage and preserve the food; it was low water activity. Salt was one of the commodities upon which ancient peoples built their trade and over which wars were fought. Salt could preserve meat, fish, and vegetables and was necessary for life. Again, the ancients understood that salt prevented spoilage and could preserve their food but did not know why this happened, only that it worked. Pickling and fermentation have been widely used throughout history. Fermented products include cheeses, bread, olives, and beverages (such as beer and mead). Again, wall paintings and figures from Egypt’s tombs indicate that these methods of preservation were practiced thousands of years ago. The difference between these ancient hurdles’ technologies and today’s technologies is the quality of the food. Whereas our ancestors used these techniques to assure that the food would provide them with a source nutrients in hard

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times, in today’s world, hurdles or challenges are applied to not only protect the food but also assure that it is going to be purchased again and again. The challenge study is the tool which allows hurdles to be validated. The challenge today is safety and quality.

Preservation by Heat Heat is probably the best and easiest way to protect our foods. The canning process was developed in 1811 and has grown to a multibillion dollar industry worldwide. Yet acceptance of canned products has dropped. Why? Food is perceived as not fresh enough. Consumers may forget that canned or hermetically sealed products are among the safest of foods. Early canning operations were rather hit-or-miss. Salmon canneries in Sacramento in the mid-1800s used vats of salt brine. Sealed cans were placed in the hot brine and boiled for various times. They were then set aside. Those that did not explode were painted red and sold. Canning as a science had its beginnings in approximately 1920. As a result of several outbreaks of Clostridium botulinum poisoning from canned foods produced in California, Drs. Esty and Meyer began extensive work to better understand the organism. With the development of formula for calculating thermal processes by Dr. C. Olin Ball in the 1920s, canning began its evolution from an art to a science. Because canning is a fairly straightforward process, it is a good starting point for a discussion about challenge studies. Several steps must be followed when doing any kind of challenge study when heat is the processing medium. These studies may be conducted to produce shelf-stable or extended shelf-life products. Operators must: 1. Define the medium. What is the product? Salts, acids, and other materials can affect heat resistance. 2. Select a target organism. If working with low-acid canned foods, the organism is usually one or more strains of C. botulinum and/or nontoxic Clostridia. Most researchers use a variety, for example, P.A. 3679 or a Clostridium sporagenes strain. Alternatives to heat will be addressed later. Obviously, toxic organisms can never be used in a processing facility. If one is looking at juices or pickled products, it is always best to select an organism that has been isolated from spoiled product. This may entail more work as culturing the organism can be difficult. 3. Be sure that the selected organisms have appropriate heat resistance. This is where many studies fail. If researchers produce a spore crop or a culture and do not spend the extra time and effort to establish heat resistance of the crop in neutral buffer, results could, at best, be suspect or, at worst, lead to results which will be detrimental to food safety. This step is time-consuming, and also

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can generate more work. If the culture does not have a certain level of heat resistance, the crop will have to be regrown and the tests repeated. 4. Document the processing parameters. There needs to be a way to monitor product heating so that it can be incorporated into the process calculations. 5. Culture/recover media. If heated organisms are going to be recovered, the selection of the proper recovery medium is of utmost importance. Damaged organisms should be given every opportunity to recover and grow. Several tools are available to evaluate heat treatments. In a laboratory environment, one can use the three-arm flask, TDT (Thermal Death Time) cans, TDT tubes, a thermoresistometer, or simple test tubes or flasks. The data gathered from these laboratory studies should then be confirmed by field studies. Three-Arm Flask This is a simple tool for evaluating heat resistance of organisms at temperatures below boiling. The flask is filled with a medium, which can be buffer, juice, or a milk product. One arm contains a temperature measuring device, the second a stirrer and the third a cap. The test organisms are placed into the medium and removed at set intervals. They are cultured immediately. TDT Cans and Tubes These are used for evaluating the heat resistance of cultures in liquids or foods. Tubes that are quite thin can only be used for liquids. With each system, a method of monitoring heating is needed, thus one or more tubes must be mounted with a thermocouple. A method of heating the tubes or cans is also required. TDT retorts are used for sporeformers of low-acid canned foods. If one is working with other organisms such as heat-resistant molds or spoilage organisms, a water bath may suffice. Thermoresistometer There are just a few of these units in the world. They can be used for testing wet or dry heat resistance of spore-forming bacteria. The advantage of the system is that a small volume of the organisms is moved into a chamber where they are instantaneously heated. The carrier vessels, small aluminum boats containing even smaller cups with the target organisms, are dropped directly into culture media at the end of the process. The pioneering work and best publications on this method came out of the old National Canners Association in the early 1950s, so the original and most comprehensive work is not available by computer searching.

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Although there is a movement towards nonthermal methods of heat preservation as a means of improving quality, heat is still the best, safest, and easiest process parameter to control. It is also the most understood. Understanding how to perform heating studies is essential. The greatest mistakes occur when people select the wrong organism and fail to characterize that organism fully before embarking on the work

Alternatives to Heat for Hermetically Sealed Foods In 1981, the Food and Drug Administration approved the use of hydrogen peroxide for use in sterilizing packaging materials. This resulted in a number of European companies bringing their systems into the United States. Among them were Tetra Pak, Bosch, Combibloc, and Benco. All shared the same problem: insufficient documentation to demonstrate that they could destroy sporeformers as claimed by the manufacturers, although they did have a history of performance. The National Food Processors Association worked with each of these companies to develop the documentation and the methodologies for demonstrating that the packages and/or packaging area could be sterilized. Since these were production systems, all work had to be conducted using nontoxic sporeformers with resistance equivalent to C. botulinum. A major part of this work was development of methods. Using the principles mentioned above, test organisms with peroxide resistance similar to C. botulinum were determined. Spore crops were produced, and packages or filling areas were evaluated. In many cases, manufacturers then had to reengineer the systems to assure that sterility could be achieved and that applications of the sterilant could be properly monitored. The basic principles described above were followed to the letter. These were more than research studies. They were done to validate that the systems could be sterilized and that sterility could be maintained, and properly monitored. The data generated needed to withstand scrutiny from the Food and Drug Administration and, more importantly, assure that the public health was protected.

Designing Challenge Studies Heat is the simplest and easiest way to protect our foods. It is a highly effective and easily monitored parameter in industrial operations. Foods that are heat-processed, of which there are many, are rarely involved in outbreaks of foodborne illness. There have, however, been too many high profile foodborne illness outbreaks in recent years. Investigation showed that none of the foods involved in the outbreaks were given a full, in-package thermal process by the processor, clearly showing the success of this method. Some of these outbreaks, associated products, and their apparent causes may be seen in Table 9.1.

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TABLE 9.1 Recent high-profile foodborne illness outbreaks. Product Jack-in-the-Box Hamburger Odwalla Apple Juice Schwann’s Ice Cream Sara Lee Luncheon Meat (1999) Radish Sprouts (Sakai, Japan) Toasted oats Raspberries Jewel Dairy Milk Jalisco Cheese

Apparent Cause Contaminated meat; insufficient process Contaminated juice; unpasteurized Contamination of mix with salmonella Post-process contamination No process Post-process contamination Field contamination; no process Post-process contamination No thermal process

These problems and others have prompted the issuance of regulations and have made the public more aware of microbiological food safety. Despite this great push toward assuring the microbiological safety of our foods, outbreaks continue to happen. However, the statistics do indicate that 90–95 percent of all foodborne illnesses are caused by mishandling in the home, in restaurants, or in food service operations. It is not the processor who is the one at fault in most cases. It is, however, up to processors to do whatever they can to eliminate the remaining 5–10 percent; use of challenge studies, many of which incorporate hurdles, is always the best solution. Since consumers cannot test food for safety, they expect whatever they buy to be safe and wholesome at the time of purchase. Unfortunately, once food is in the hands of consumers, anything can (and does) happen. The principles used for thermal studies are perfectly valid when conducting a study in any other system. The study must consider the following: • • • • • • • • • • •

Existing food system or baseline End results Test organisms and inocula Processing parameters Test conditions Conditions for evaluation Potential for nonbacterial spoilage Hurdles used Packaging Legal issues Reality check

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Existing Systems or Baselines One of the most common reasons for a study to fail is operators not establishing baseline data for their existing products or processes. Processors should have full and complete databases on each and every product. This includes physical, chemical, and biological/microbiological data, plus variations. Operators should also have file data which was gathered during the product or process development. Why is this important? If there is going to be a change in a product, process, or package, one cannot evaluate how that change will affect the product without knowing the baseline. For example, changing a package in a refrigerated food may affect the microbial flora, but without an understanding of the existing product, the change cannot be properly evaluated. If the package change encouraged the growth of lactic-acid bacteria, it might be good from a safety standpoint, but the growth of such organisms would probably affect flavor and consumer acceptance. Part of this baseline is understanding the process and all its unit operations. The United States used to have a mushroom processing system called albuvac. Fresh mushrooms were treated with albumen in a vacuum chamber, blanched to set the albumen, canned, and thermally processed. The processor and the supplier of the system really did not fully understand the process, since failure to properly blanch and rinse mushrooms resulted in albumen leaching into the brine of the canned product during retorting. This reduced heat penetration and resulted in growth of major spoilage problems, leading to potential safety issues.

End Results Whenever a change is contemplated or a study conducted, it is absolutely essential that the goals of the project be clearly defined. What is the objective, and how will this objective be measured or monitored? For example, I once had a boss who stated “Objective of the study was to gather data.” For what? Why? What are we to do with this data? Whether the project is driven by the marketing group, is being designed as a cost reduction, or as a means of improving the overall safety of the system or product, establishing clear and definable goals is an essential first step. These goals must be realistic and obtainable. One goal which is becoming more often requested is the five-log reduction for pathogens. It has been adopted by the regulatory groups, but is it a necessary step? This and the majority of the following issues can be grouped together in good experimental design.

Processing Parameters When setting up any study, establishing processing parameters up front and making them realistic is also essential. For example, an operation is filling pouches with a sauce product and the in-plant equipment and bag-makers

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specify that fill temperatures not exceed 180–185°F. It really doesn’t make a great deal of sense, then, to conduct preliminary studies at temperatures in excess of the operating conditions in the plant. And beware the benchtop studies. They should be used to provide guidance, not definitive answers. What one learns at the bench can be applied to trial runs in the plant. Do not use these for final decision making.

Selection of Target Organisms This is and will always remain a problem. The selection of a target organism and the appropriate inoculum level depends upon the product and process. If you are validating a new aseptic filling system for low-acid products, there are certain hard and fast rules that should be followed. To evaluate the product processing side, nontoxic Clostridia or spore-forming bacilli of defined heat resistance are needed. If the sterile zone and packaging material are to be sterilized with hydrogen peroxide, use Bacillus globigii and Bacillus stearothermophilus. It is recommended that you work with the in-house processing authority or use a recognized authority from outside. These are not systems that just anyone can validate. With other products, good sense and reality should prevail. Unfortunately, one does not have to look too far for situations where common sense was ignored. A processor wanted to develop and market a line of pasteurized, refrigerated entrees and sauces in a vacuum bag. The products would be hot-filled, held in excess of 185°F for ten to twelve minutes and then quickly cooled. All natural ingredients were to be used. Because they were low profile pouches, they cooled quite quickly, as demonstrated using thermocouples. Whenever possible, the products were formulated so they had pH values of less than 4.6. Some were low-acid products, however. The products would be distributed and sold in the refrigerator case. The initial feeling was that simply using thermocouples would allow the processor to verify that the process would be adequate. The processor felt that inoculated studies were essential, however. The organisms selected were those that had been isolated from the same or similar products that had spoiled. The study was designed so that there would be inoculated and uninoculated product. Incubation temperatures would be 35, 40 and 45°F. The latter would be considered an abusive condition. Their in-house expert insisted on the inclusion of proteolytic C. botulinum spores in the study and that one set of samples be incubated at 70°F. Rewriting the proposal to accommodate this request tripled the cost of the project. And what would it actually prove? That the processing parameters were inadequate to destroy C. botulinum, and that spores heat-shocked in a vacuum-packed product and incubated at 70°F will grow. The study would not prove anything. If the product would remain under refrigeration as it is supposed to, this organism would not be an issue. Common sense and reality need to be part of the equation.

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Hurdles Take care when formulating a product and incorporating ingredients that would constitute hurdles. If it is a product line extension or an improvement or modification of an existing product, use should be made of the preexisting baseline data. The importance of understanding the baseline data has already been emphasized. Ideally, researchers should seek to learn the effects on each individual component that constitutes a hurdle. They can then begin combining to determine the effects of both hurdles. Does one reinforce the other so that in combination the benefits of the individual materials are higher? This is important for a number of reasons. After safety, perhaps the greatest is cost. Why incorporate ingredients or additives into a food system when there is no real benefit? Some of the materials that are acknowledged as inhibitory are expensive. An expensive antimicrobial should not be used unless there is a real benefit. Consider practical processing when conducting research that utilizes hurdle technology also. Several years ago a group published a study demonstrating that acidifying mushrooms to various pH values would allow reduction in the amount of heat required to achieve commercial sterility. Since it was already known that organisms tend to become more sensitive to heat as pH drops, nothing new was learned. By suggesting that processors adopt such a system, they were, in reality, making the system more complicated and potentially more hazardous. Processors (the retort operators) would have had a range of processes from which to select. The potential for error would be increased. In the real world of plant operations, the simplest process is usually best.

Legal Issues Challenge study design needs to take the realities of food law into consideration. Published work using ingredients which are either not approved for certain food uses or utilize materials at above allowable levels often seem like exercises rather than something of value. Why do people bother? Does it make sense to conduct a challenge study and determine that “ . . . a formulation with 400 ppm nitrite inhibits C. botulinum in beef franks,” or 1 percent benzoic acid showed excellent inhibitory effects against a certain yeast in a juice blend. The law in the United States prohibits the use of these compounds above a certain level.

Reality Reality also means common sense and keeps recurring. Studies investigating microbial inhibition should always be designed to reflect the real world. First, studies pertaining to food safety and quality should address practical problems and not create (or imply) that others may exist. Second, studies should always discuss real-world situations. Again, don’t suggest that a

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problem exists where there is none. I see far too many examples of work that fails to address these basic premises. Here are a few examples, good and bad. 1. Ground product was inoculated with a high-level of E. coli 0157:H7 and given a mild irradiation treatment. The treatment only achieved a three to four log reduction. The presenter acknowledged that when this particular pathogen was found in foods, the levels were at most 0.3 organisms per gram. The process may not have destroyed all those inoculated, but it did inactivate much more than a normal meat product would have. 2. The author of a book chapter stated, “Botulism has been linked to coleslaw. . .”. The study to which the author referred was a feasibility study. There has never been an outbreak, but work conducted has shown that the organism could grow under certain abuse conditions. The text fails to cite the full article and simply leaves the statement as may be seen above. The implication in the textbook is that bagged, precut vegetables are a potentially hazardous product for botulism. This is not the case. A recent study at the University of Georgia reported that botulism could grow in packaged precut vegetables, but only under abuse conditions. The study also stated that the products would be obviously spoiled before toxin production. My concern is that someone will not read the full text of the report and may simply say, “Well, it could grow, and is, therefore, a hazard.” 3. A few years ago an outbreak of E. coli 0157:H7 was attributed to an Italian dried, sliced salami. The company involved with the outbreak and others analyzed hundreds of samples of whole chubs for the pathogen. It was never discovered in a whole chub, yet overnight, this particular style of product became hazardous. To demonstrate that the normal fermentation process was inadequate, a group prepared to make the product using a batter inoculated with the pathogen. The batter contained 1 x 109 E. coli 0157:H7 per gram. The fermentation process did not achieve a five-log reduction, so the researchers concluded that the process was unsafe. For a product to get this many pathogens in it, it would have to have been manufactured from almost pure dung. The numbers of pathogens should really not rival the starter culture (that is one reason starters are used). So no wonder the pathogens were not reduced significantly. Remember also that in real life, contaminated meat products contain less than 0.3 organisms per gram. Organic acids are excellent inhibitors of many organisms. In small amounts, they impart unique and often distinctive flavors to foods. At

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higher levels, they would make a food unpalatable. I have seen publications that report, for example, that the addition of 2 percent lactic acid to a formulation or product served to inhibit a particular organism. Did the researchers ever stop to consider that someone might want to eat that product? The flavor profile of such a formulation would probably be terrible. Remember always to take care when designing a challenge study, especially if it may be published. Consider cost, benefits, impact, and whether it will meet your needs.

Challenges with New Systems As noted earlier, there is a great deal of interest in new nonthermal processes. Among these are pulsed electric field (PEF), high hydrostatic pressure (HHP), pulsed light, and ultraviolet light. When setting up studies with these systems, follow the same criteria and consider the same issues as noted above, but establish baseline performance because the need is even more critical. These are new processes, so it falls on the companies interested in the technology or the research institutions involved with the systems to develop the tools and methods to properly evaluate the processes and products for which they can be used. As these are new technologies, developers and potential users should approach them with an open mind. For example, I believe that many individuals concentrate too much on both pathogen reduction and large reductions in total count. If the process does not achieve a five- or six-log reduction, it is a failure or has no application. Think again. There are many ingredients and products for which buyers have established very rigid and often non-negotiable specifications. What if a treatment, such as pulsed or ultraviolet light, achieved a one- or two-log reduction only in a product or ingredient? It obviously would not be sterile, but it may well assure that that product will remain within an established specification. Such a process would not be a substitute for maintenance of GMPs, but it might pay off if out-of-compliance lots dropped from a few percent to zero.

SUMMARY As food processors, it is our duty to assure that manufactured products are safe and wholesome and have high quality. One of the tools for assuring the manufacture of safe food is the application of HACCP, a management tool for the production of safe foods. The production of safe foods follows through from the original product conception. Management must coordinate activities so all groups with a stake in the process work together for the common good. In a corporate environment, food safety should be driven from the corporate side. If food safety is done backwards, that is, done by the plant people, there are concerns that the program may be compromised.

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One of the tools for assuring that foods are microbiologically safe is challenge studies. This is particularly relevant these days, as industry tries to minimize processing and applies hurdles. Failure to do appropriate studies can jeopardize a product’s position in the marketplace, simply because the processor failed to perform due diligence. A classic example of this is the Odwalla outbreak. The company had been warned that failure to pasteurize their products put them at risk. The literature also cites a number of outbreaks directly attributable to unpasteurized juice products, also where companies failed to act. Work done since that time has confirmed that E. coli and other pathogens will survive in acidic products; this emphasizes the importance of pasteurization. The key to setting up a challenge study is proper experimental design, which includes established objectives and methods of evaluating the study. Prior to conducting any such work, processors need to understand their existing systems and the baseline, but above all, must apply common sense and be realistic when designing and carrying out the study. Processors should consider whether the study utilizes conditions which are realistic, within legal boundaries, not cost-prohibitive, and which will produce a final product that will be acceptable to the ultimate user.

BIBLIOGRAPHY Centers for Disease Control. “Update—Salmonella argona Associated with Breakfast Cereal.” CDC Media Relations (June 8, 1998). Hefle, S.L., and S.L.Taylor. “Allergenicity of Edible Oils.” Food Technology (1999): 53:2, 62–70. Keener, L. “Why HACCP Systems Are Prone to Failure.” Food Safety. (December 2000–January 2001): 1719, 40. USDA-FSIS. (“Pathogen Reduction; Hazard Analysis and Critical Control Point (HACCP) Systems.” Code of Federal Regulations, Title 9, Part 304, Final Rule. Federal Register 61:144, (July 25, 1996): 38864–38871. USFDA. “Procedures for the Safe and Sanitary Processing and Importing of Fish and Fishery Products.” Code of Federal Regulations, Title 21, Part 123 and 1240, Federal Register 60:242, (1995): 65197–65202. USFDA. “HACCP Procedures for Safe and Sanitary Processing and Importing of Juice.” Code of Federal Regulations, 21 CFR Part 120, 66:13 (January 19, 2001): 6137–6202.

10 Some Lesson Vignettes from Focus Groups and Other Market Research Charles Beck, Stratecon

INTRODUCTION What follows is a selection of mini-case studies that provide the reader with vicarious experiences. We hope that the result goes beyond entertainment (at the expense of others) and that the reader can now apply these experiences so that history need not repeat itself. There are very few ways to introduce a new product successfully—there are endless ways for it to die. Even though product development and marketing people are wired differently and speak different languages, these two disciplines especially (and others) must learn to get comfortable with each other and function as a goal-directed team. The vignettes which follow are each individual stories, but they have been crudely classified into three categories: 1. Communication 2. Protocol 3. Consumer testing 125

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It is clear that by reading these, each person will recall a number of their own experiences which could be included. You are encouraged to spend a few extra minutes closing your own stories with “What Happened” and “Lesson.”

COMMUNICATION VIGNETTE: ASPARTAME DEBUT Charles Beck During the first half of the 1970s, G.D. Searle & Co. discovered and developed aspartame (Equal) as a sweetener. At that time I was part of Searle’s Fermco Division, which sold enzymes to the food industry as processing aids, and we were the only connection between the healthcare company and the food industry. Getting an idea of the potential size of the industrial market for this product was very important, and we prepared to generate interest by providing sachets of the sweetener at the Annual Meeting and Expo of the Institute of Food Technologists. The sachets were a big hit. Food processors clamored for test-quantity samples, even if they had to pay developmental prices. The company was initially very pleased with the interest and wherever possible we tried to get potential usage volumes so a manufacturing facility could be sized. Potential customers had their product development people preparing very attractive retail prototypes which, after a while, were refined and ready to be manufactured and introduced. Two problems: at this time there was only a small pilot plant in Japan and uncommitted output was very limited, and the FDA hadn’t yet approved the food additive petition.

What Happened Searle had told researchers (and it was public knowledge) that approval was still pending, but processors had to do the technical evaluations in order to be competitive. In many cases marketing fell in love with the low calorie products and until processors started planning introductions, not everyone understood that the production of this product was all on hold. Customers were furious with Searle.

Lessons 1. This one isn’t easy. Perhaps companies should only release a research product with an informed consent. That is, the recipient acknowledges in writing that the product is not yet approved and that manufacturing capacity is not in place. Refusing to provide samples is counterproductive for everyone. 2. If you are the food processor’s product developer, don’t let your management make extensive plans contingent upon an emerging or uncertain ingredient.

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COMMUNICATION VIGNETTE: CHEERIOS Charles Beck Louis Huber was a product developer at General Mills, Inc. a long time before I joined them in 1967. He had formulated an oat-based ready-toeat breakfast cereal which he produced as little spheres. He took the product around to his cohorts, and most agreed it was quite promising. Then the product was presented to marketing who also recognized its taste appeal. Unfortunately, marketing came back after studying the product and rejected it. The cereal would compete on the shelf with Corn Flakes, Puffed Rice, Rice Crispies, and others—all of them had a lower bulk density, and the oat product, in the same size box, would cost much more. They thanked Mr. Huber, but that was that. Louis Huber wasn’t done; he had the drive and imagination to change the bulk density without changing the flavor or texture. His tiny little letter Os have probably made more money with less advertising than any ready-to-eat cereal product in history.

What Happened The product developer was told where the problem was, and he solved the problem.

Lesson Product developers are problem solvers. To be successful they need other disciplines (as we all do) to pinpoint the problems worthy of solution.

COMMUNICATION VIGNETTE: THE SURIMI SURPRISE Jeanne Meeder The company manufactured a range of surimi seafood products. One of its highly successful crab products caused great alarm when three product complaints came in at the same time from a single region. • A woman woke up at night and when she entered the kitchen she observed some glowing food on the floor where her dog had overturned the garbage. It was the surimi. • A group of people was enjoying a picnic. As the sun set in the west and darkness fell, the crab salad took on an iridescent glow. • A homeowner, whose refrigerator light had burned out, opened the appliance at night and the crab product in a shrink-wrapped tray was glowing.

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What Happened These crab products had been sold in bulk and were repackaged in Styrofoam trays at the store level. The problem was only in products distributed from one store. Fortunately, the fluorescent organism, which was introduced by cross-contamination at the store level, was not pathogenic. Tests done with recovered organisms and fresh crab surimi showed that substantial efforts were required to reach the level of fluorescence achieved in this single event.

Lesson When a product leaves the control of a food processor, the final safety is a function of product handling in your plant, at store level, and in the hands of the consumer. Though store level handlers should have known to avoid cross-contamination, there is always vulnerability to gaps in training.

COMMUNICATION VIGNETTE: PRECOOKED CHICKEN Course Student After this part of the training course was presented in New Orleans, one of the offshore students offered this story. His company produced poultry products, and they recognized the opportunity to offer packaged, precooked chicken products at retail. The products were to be revolutionary because they would be fully cooked and no such products had ever been sold in this country before. The advantages were that the products could be eaten cold or simply reheated and that there could be big consumer savings on the fuel normally needed for home preparation. When the product was launched, there was great disappointment because consumers found the products were fibrous and had no juice.

What Happened Consumers saw the products labeled as “fully cooked,” but it didn’t register because they had never heard of such products before. They fully cooked the products again.

Lesson The company’s excitement about this product was because it was revolutionary, and yet they forgot that when you have a large paradigm shift, the consumer needs a correspondingly increased level of education about the novelty of the product.

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PROTOCOL VIGNETTE: CUSTOMER SERVICE Jeanne Meeder A food product marketer was planning to introduce a stuffed chicken breast product which, late in the process, its selected supplier disclosed it could not provide. With only six weeks to the launch date, the marketer went to another processor and asked for help. The second processor mobilized its people in a crash program (working days, nights, and weekends) and produced a product satisfying the marketer, obtained USDA approvals, prepared the necessary photographs, rerouted blank packaging and had it printed, and in five weeks met the challenge.

What Happened 1. The marketer was very pleased and still is a faithful customer of the second processor. 2. The employees who fulfilled the need were totally exhausted by the effort, and that still lives in their memories as both an act of heroism and a month of hell they never want to repeat.

Lessons 1. For the first processor, don’t promise what you may not be able to deliver. 2. When you really go out of your way to service customers, you may earn a lasting loyalty. Note: This enormous effort was a big risk; what if all this effort was spent and the second processor failed on any dimension (product development, USDA approval, packaging, or timing)?

PROTOCOL VIGNETTE: BEEF NOODLE SOUP—DRY MIX Tom Heyhoe Based on the popularity of chicken noodle soup as a dry mix, marketing wanted to have a beef noodle companion product formulated and introduced. Typically, the noodle in the beef variety is broader and thicker and, therefore, requires a longer cook time (twelve minutes versus five minutes). Marketing had been notified and accepted the change. Nonetheless on the morning of the first production run, when the packaging was just-in-time delivered, the preparation instructions had not been altered from those of the chicken product. Since the noodles were made in-house, a seventy-five-minute adjustment of noodle output configuration salvaged the production run and the launch requirement was met.

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What Happened The message didn’t make it to the people who approved the printing.

Lesson It’s perfectly okay for marketing to have primary control of the package development, but it’s essential that all participants have a sign-off before the presses roll. Protocol failed here.

PROTOCOL VIGNETTE: SNACK CAKE Richard Schoenfeld A major snack cake company was seeking to improve the sponge for one of its flagship products. Based upon the European use of the emulsifier DATEM (diacetyl tartaric acid esters of mono- and diglycerides), it was thought to be a good candidate to achieve the goal. In Europe DATEM was found to improve conditioning for raised-dough systems, as it stabilizes air cells. Based on this prior history, the company saved all the time and expense of laboratory screening and went directly into a plant trial. When the cream filling was injected into the center of the sponge, the cells were so stabilized that air could not escape and products just kept exploding on the line. The production line was down for hours to clean up the mess and to retreat to the previous formula.

What Happened DATEM was well adapted to European flour, which is weaker than US flour, and, therefore, benefits from improved conditioning.

Lesson Always do your homework. In this case, the company had a substantial research group (and the kitchen and pilot equipment) to do a small test very easily. It was an unnecessary and expensive error.

PROTOCOL VIGNETTE: SPECIALTY FAT Richard Schoenfeld During the development of a powdered specialty fat ingredient, a laboratory process had been successfully scaled up to a pilot plant trial. Encouraged by this, the company arranged for a full-scale production trial that would provide a supply of the fat which could be used for developing specification sheets and which could be used to sample prospective customers who would then identify applications.

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After several days of tempering the finished powder, the microbiological results came back with very high plate counts.

What Happened The production equipment had not been thoroughly cleaned and sanitized prior to making this run. The company learned something, but what they learned was costly in money and lost time.

Lesson Know what product was run just before yours and pay for (and insist on) a prerun cleanup if it is required. Tests at production scale are often seen as a plant intrusion and are frequently tailgated on other production, just before the cleaning crew arrives on the graveyard shift. If you didn’t already know this, the midnight plant trials serve both to insure that bread and butter production is not compromised, and that further plant trials are discouraged.

PROTOCOL VIGNETTE: CONDITION OF EGGS AT STORE LEVEL Dan Best During its commercialization of new egg pasteurization technology, Pasteurized Eggs Corp. was balancing the processing level to insure microbiological safety while still retaining the freshness and functionality of raw eggs. Dan Best, as a technical member of the board, was concerned about the condition of the eggs on the store shelf—were they overprocessed? He could have arranged for an audit by one of the retail audit companies or he might have gone to an analytical lab with regional facilities. Either of these actions would have carried several thousand dollars of additional expense during the product introduction phase of an early stage company. Ultimately, he called a food professional friend in the test market area, and for the cost of a few dozen eggs, the question was answered.

What Happened Once the retail condition of the product was known, it was a simple matter to optimize the processing, distribution, and retailing protocols.

Lesson Before designing a big research program, determine what you really need to know, and how you will use the data after it is developed.

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PROTOCOL VIGNETTE: RENAL CALORIC SUPPLEMENT Charles Beck While working for G. D. Searle & Co.’s food ingredient division, our business planning group decided that we were uniquely positioned to enter the special dietary food sector. After a well-researched medical study, the renal (kidney) area was chosen because, though a small market, the restrictions applied to every meal and the renal dieticians made a strong case for patient needs. (Salt restrictions limit taste, and protein restrictions limit texture.) We created two frozen product types, each in a few flavors: a frozen cookie and a frozen cup dessert. These delivered fat, starch, and sugar, and were highly flavored to contrast them with an otherwise bland diet which the patients weren’t eating. The fact that the products were frozen made them cooling in the mouth and refreshing. This helped to overcome the cottony mouth which many renal patients experience. The renal dieticians were very encouraging and wanted the products to help their patients. The patients were also receptive, even though these products were at the high end of cost per serving. However, this project as structured died a quick and well-deserved death.

What Happened We were trying to deliver frozen food to 50,000 renal patients throughout the U.S., and they might as well have been one person per city.

Lesson Look at the whole project. Even if you are a product developer, you need to consider the package, the market, the consumer, and the distribution; or to be certain that others have not left gaps.

PROTOCOL VIGNETTE: BLACK RICE Tom Heyhoe A new dry-mix curry and rice soup had been developed and in-home testing had been very positive. Shelf-life tests were under way, but no results were yet available. Given the excellent consumer trial results, marketing was very keen to get the product on sale in time for the winter peak season. R&D had considerable experience with dry-soup shelf-life tests and did not think that curry and rice would do anything other than follow the usual pattern; that is, a very slow loss of flavor over time. With only a week to go to full-scale production, the first shelf-life examination revealed something extraordinary. All the rice in the accelerated storage packs had turned black. Panic set in, but there was only one

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thing to be done—find out what caused the problem and then determine how to fix it. Research established that an enzyme in one of the curry powder spices had attacked the coconut oil-based fat. A solution was put in place: heat inactivate the enzyme in the curry powder and switch to a different fat.

What Happened The decision to accelerate the offer of the new product (based on related product experience and made under time pressure) was made with incomplete product evaluation and was wrong.

Lesson Yielding to demands to speed things up can lead to disaster. Nine women cannot join forces to give birth to a baby in one month!

PROTOCOL VIGNETTE: MARSHMALLOW Frank Kramer In the early 1960s, Campfire Marshmallows was a leading brand, and the products were made by a cumbersome and messy starch mold process. Furthermore, the packaging of the marshmallows involved a “hen house” of hand laborers who transferred the products to boxes. Then Kraft entered the category with a more modern process, and the products were sold in bags. Campfire was forced to modernize to protect their flagship, so they acquired new streamlined continuous equipment and were soon producing marshmallows and packaging them in bags. However, in a very short time the marshmallows in the bags were sticking together.

What Happened These marshmallows had a water activity that made them tacky, and they didn’t have a dry starch coating. Moreover, they were being forced together in the new, less expensive bag. The technical team carried out classical water activity studies with saturated salt solutions and adjusted the ratio of mono- and disaccharides to control the moisture vapor pressure. Then they confirmed the storage and handling stability by conducting shipping tests to various part of the country.

Lesson A process change can result in substantial product changes, even when they are not visually apparent in the plant. All of the steps a product experiences, right to the moment it is eaten, must be tested.

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CONSUMER TESTING VIGNETTE: FOCUS GROUP RESPONDENTS Charles Beck Many years ago we convened a focus group to conduct some tests on a concept along with some preliminary prototypes. I have forgotten the product but never the event. When the products were distributed for respondents to taste, the discussion revealed a mixed response of acceptance or minimal interest with some critical comments. No one loved it, but no one voiced strong dislike. This was not consistent with one woman’s apparent intense dislike. She spit the product discretely back into her hand, and while we watched through the one-way glass, she put it in a potted plant. After that she dashed down some apparently harsh notes on the evaluation form. Later, when the forms were collected, we watched her crumple the form and stuff it into her purse, while she passed the other forms down the table. I still wonder what choice words were held back.

What Happened Our prototype was revolting to this individual, but she wasn’t able to share that with a group of strangers.

Lesson Be sure you don’t determine too quickly that consumers accept your baby. Maybe you need to give them permission to be very critical (but still not guide them to dislike your offering). Try asking “What did you like best or dislike most about the product?” or “What would you compare this to?”

CONSUMER TESTING VIGNETTE: “WHAT DO YOU WANT?” Charles Beck There are some times when in the course of market research, you want to draw knowledge from a brain which has not been tampered with or preconditioned. Instead of saying “Rate your degree of liking for the following twelve dessert categories,” you might ask, “What are your favorite desserts?” This is true top-of-mind open-ended research. You asked for it, and you are going to get it—from Bananas Foster to passion fruit to “my Aunt Jane’s German chocolate cake.” Each respondent may provide from one to six items; when you collate all responses, no item will be consistently the same, and it is your job to make sense of this. These responses are unbiased, but they may be of marginal utility. You might have asked a more directed open-end question such as “When you are at a restaurant, what

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favorite dessert might you order?” or “Of all the supermarket dessert products, which ones are most popular with your family?” or “What products do you love from a bakery that you can’t find in the supermarket?” These narrower questions may provide more manageable information without overly biasing the respondent, and these questions may fence out Aunt Jane’s cake.

Lesson When designing questionnaires, know what you want to learn, what decisions you will make from the answers, and ask yourself in advance how each question is likely to be answered. Open-ended questions are sometimes very revealing, but don’t ask, “How is your life here?” when you need to know “What do you like and dislike about living in Kansas City?” The same applies when structuring focus group questions.

CONSUMER TESTING VIGNETTE: YUGOSLAVIAN POTATO CHIPS Herbert Weinstein In the early 1980s, General Foods Corporation received an official request from Yugoslavia to use the company’s know-how to build a potato chip plant in Yugoslavia. At that time General Foods had involvement with a Canadian chip manufacturer and a technical representative went to Yugoslavia where he saw a building which was side-by-side with, but well isolated from, a pharmaceutical operation. Based on the floor plan, the Canadian and General Foods’ engineers from the International Division designed a plant to produce chips which would equal the quality of Canadian chips and be made from local potatoes. Interestingly, once the plant was ready for start-up, General Foods’ technical support people were brought to the area as advisors but were not permitted in the plant. Nevertheless, the plant successfully went onstream making the intended potato chip which the local people did not like; the chips just didn’t taste right.

What Happened The existing potato chip market in Yugoslavia was fulfilled by a myriad of small local garage operators whose oil management practices led to a pronounced rancid flavor in chips. The brand new plant made bland chips that “had no flavor.” General Foods went to a European flavor house to obtain a rancid flavor that was added to fresh oil in a controlled way. The plan was to gradually wean consumers off of the rancid note.

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Lesson Consumers rule! International products cannot be transplanted without local consumer testing.

CONSUMER TESTING VIGNETTE: NAMING PRODUCTS FOR EXPORT Charles Beck When I lived in Chicago, I periodically enjoyed the opportunity to visit a few delicatessens which specialized in imported items. My favorite specialty purchase was landjaegar, a heavily smoked sausage product the length and shape of the flat form of beef jerky, but much thicker. On one trip while waiting for my number to be called, I couldn’t help but notice the confection rack near the checkout had a German baked wafer product with raspberry filling and a chocolate coating. Since it carried the brand “Zits,” I assumed only people who had consumed the product in Germany were likely to buy it here.

What Happened Zits, which apparently means nothing bad in German, is teenage slang for pimples, which are already associated, correctly or incorrectly in the United States, with eating chocolates.

Lesson Always evaluate branding, graphics, and labeling by native marketers, linguists, and consumers before simply exporting your successful product into another culture. (You might even want to have the target customer base taste the product prior to launch!) Note: This is only one transnational naming story. There are entire book collections of similar faux pas; see the references.

CONSUMER TESTING VIGNETTE: TOASTER PRODUCT Charles Beck Many years ago while I was at Kitchens of Sara Lee, we were assigned the task of developing some toaster products as breakfast entree options. At that time I was fortunate to have a small team of people whose skills were varied, including a fellow that I would classify between a cook and a chef. He also had several years of experience in the food industry and developed a family of toaster candidates from which we chose several promising items for focus group sessions.

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The focus group proceeded with initial discussions of breakfast habits and some coverage of speed, convenience, and portability. Ultimately, the concept was disclosed, and the products were popped into the toaster. While the moderator continued the discussion and we watched from behind the one-way glass in the viewing room, smoke began pouring out of the toasters. We couldn’t really bang on the window. After the smoke cleared, the moderator didn’t turn her back on the appliance again, but we had fewer samples to show.

What Happened The equipment at the focus group location was different and less expensive than the toasters in our company kitchens. The weight of our toaster products was more than the cheaper toasters could handle so the product never popped up. As long as the toaster basket is down, the heating elements are active.

Lesson When designing a product for a kitchen appliance, test it in many models of that appliance.

CONSUMER TESTING VIGNETTE: TWO-LAYER DESSERT Tom Heyhoe A new dry dessert mix had been developed. To prepare the product, consumers needed to add boiling water to the mix, whip it into a light foam and then chill it before serving. Very soon after launch, customer complaints started to trickle in. The complaint was that the product separated into two layers, foam on top of a gelled layer. The complaint was investigated, and it was found that the melting point of the emulsifier used in the mix was too high. That is, it did not fully function with water at much less than its boiling point. Substituting another emulsifier with a lower melting point solved the problem. However, the bonus from the investigation was that a new, separate range of deliberately two-layer desserts could be developed. These sold very well indeed.

What Happened R&D sometimes assumes perfect conditions that don’t hold in the real world of variability.

Lessons 1. Do some home use consumer testing, even if it is only with the families of employees. 2. Sometimes solving a problem creates an opportunity.

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CONSUMER TESTING VIGNETTE: HEADACHE POWDERS Jane Emerson In the course of monitoring sales of its headache powder, a manufacturer noticed an unexpected sales increase in its products. Whereas traditional markets for headache powders had been in southern, middle-to-lower income rural communities, sales information showed emerging markets were in other demographic sectors. To better understand the needs and opportunities associated with this developing segment, the company chose to conduct store-intercept interviews of consumers at three cities with the highest sales increases. Initially they planned to step up advertising in the cities with similar demographics so they could dominate the emerging sector. Management wanted to know who the new consumers were and how the product should be positioned for them. What they learned was surprising. Every so often a customer would come into a store and buy every unit of product in the store. When they checked with other store managers in the area, the story was the same.

What Happened It turned out that this market segment had discovered a new application for an established product—to cut (dilute) cocaine.

Lessons 1. Despite the outcome, it is critically important to know consumer behavior regarding your product; look at Lipton’s Onion Soup mix which was put into a chip dip! 2. Be very careful about projecting new business from a narrow segment of the consumer base. 3. Don’t plan your ad campaign until you’ve done some research.

CONSUMER TESTING VIGNETTE: FLAVOR SAVOR PIZZA Charles Beck In the early 1970s Celeste Pizza, acquired by Quaker Oats, had a leading position in the frozen pizza sector, but the entire category suffered from significant flavor and color loss under frozen storage. In three to five months, red tomato sauce became oxidized to orange and, with further aging, it would go to a yellow, completely tasteless topping. Scientists at Quaker Oats figured out that a controlled-atmosphere packaging system almost completely solved this problem, so they modified their existing packaging machines (not designed for controlled atmosphere) and used a thick barrier

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bag to contain the pizza in the traditional box. The new product was introduced with some fanfare, but fewer than half the bags sealed properly so products from the same run, after storage, could be any color on the spectrum from yellow to bright red. Moreover, the bag which was either clear or said only “Flavor Savor” confused some consumers who popped the pizza, bag and all, into their ovens. It was not a pretty sight! Eventually the bags were printed with “Remove this wrapper before heating” or something like that—but the company never purchased proper packaging machines. Other competitors eventually overtook Celeste Pizza.

What Happened There were two different issues here. The company either lacked the funds to buy controlled-atmosphere packaging equipment, or they did not have enough confidence in the product to guarantee return of investment. Also, they clearly failed to do sufficient consumer testing.

Lessons 1. Always let the consumers show you how the product will perform in their hands. 2. Don’t make promises to consumers that you know you can’t consistently keep.

CONSUMER TESTING VIGNETTE: REAL CIGARETTES Jane Emerson In the mid or early 1970s when health food and natural ingredients were the coming fad, RJ Reynolds decided to manufacture a cigarette whose claim to fame was all natural ingredients. It was so hush-hush that they were unwilling to do any marketing research for fear of competitors getting wind of their idea.

What Happened Target consumers, that is smokers, were totally unconcerned about the naturalness issues connected with cigarettes. Hence, the unique selling proposition was a total nonfactor. The consumers who responded favorably to the concept of all natural ingredients were not smokers. The product was a total failure, millions were lost, and heads rolled!

Lesson Understand your target audience from all aspects and always do marketing research on the target segment before attempting to launch a product.

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CONSUMER TESTING VIGNETTE: SHEER ENERGY PACKAGE Jane Emerson The cost of the package was very expensive—a silver egg—and L’Eggs wanted to change to something cheaper without reducing the perception of quality of the product as well. Focus group respondents were emphatic about how unimportant the package was to them, saying, “It could be a brown paper bag, and I would still buy it!”. Upon approaching the question from an entirely different angle, that is “Describe where and how you buy your Sheer Energy,” the outcome was very different. Consumer after consumer said “I just go to the grocery store, look for the silver egg, and throw it into my shopping cart.”

What Happened L’Eggs repackaged the pantyhose in a cardboard die-cut that replicated the shape of the original and used silver paint on the egg part to maintain the rack appearance.

Lesson Ask questions from several directions to get at underlying behavioral issues. Don’t become satisfied with the obvious first responses.

CONSUMER TESTING VIGNETTE: LINE ‘EMS FOCUS GROUPS Jane Emerson A client asked for help with a new product and wanted to evaluate all aspects of it, including the name, packaging, size, color, price, applications, and the concept itself. The basic findings were that the concept and the product were interesting to the audience and the proposed price was within acceptable range. Despite all that, everything about the product ultimately had to be redone: the name, packaging, color, application, and target audience. The product was a sheet of Teflon in various sizes, with the sizes differentiated by color. The concept was to make any oven-worthy vessel, such as a favorite piece of pottery or casserole into nonstick cookware by putting the sheet of Teflon into it for temporary usage. The proposed product name was Line ’Ems and the assorted sheets were folded down to about five by nine inches and packaged in a flat box.

What Happened The packaging looked very much like department store hosiery, including the type style for the name. Consumers made the connection from the

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hosiery to Line ’Ems and assumed that it was some type of feminine hygiene product like pantyliners. The developers and marketers of the product had been Hanes Hosiery employees for over twenty years and were steeped in that style of product development and marketing. Further, consumers did not associate blue, green, and pink with cookware and found it strange and unappetizing (particularly the blue). Finally, the product was not really tapping into a recognized need. Ultimately, the product was resized (much larger), changed to neutral grays, and marketed to commercial bakers to line commercial baking pans.

Lessons 1. Be sure that you are objective about your product and the mindset of your target customer. 2. The package should amplify or reinforce the product concept.

CONSUMER TESTING VIGNETTE: CEREAL BOX Course Student Thanks again to the offshore student who shared this story after the presentation of this subject in New Orleans. Breakfast cereals usually have a challenge to rise above their competitors on the retail shelf. There are usually many brands, each with different offerings and sometimes with several sizes. In an effort to get more visibility, marketing went to the company’s packaging group with the idea of changing the dimensions of the cereal box so that the front panel, the face, would be larger. To keep the volume and delivered weight the same, the depth dimension was reduced. Though the primary objective of increased facing was achieved, the change was very unpopular.

What Happened The box now had such a small footprint that it couldn’t stand up without bookends.

Lesson The simplest consumer test would have uncovered the problem immediately. If a few nontechnical employees had simply been given the product to take home, the problem would easily have shown itself. The product inside the box had not been changed so, for product development, there was no perception of change. Every change needs to be tested and validated.

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CONTRIBUTORS The mini-case studies compiled in this chapter were contributed by Dan Best, Jane Emerson, Tom Heyhoe, Frank Kramer, Jeanne Meeder, Richard Schoenfeld, Herbert Weinstein, and a student who attended the short course in New Orleans.

BIBLIOGRAPHY Gershman, Michael. Getting It Right the Second Time. Lebanon, IN: Addison-Wesley.1991. (See also 2000/1998; different subtitle and publisher.) McMath, Robert, and Thom Forbes. What Were They Thinking. London: Random House International. 2000/1998. Ricks, A. David. Big Business Blunders. Homewood, IL: Dow Jones-Irwin. 1983. Website with nine international marketing mistakes from American Demographics magazine: http://members.core.com/~wcthomps/funnies/ mrktoops.htm

11 Equipment Integration in the Process: Patent Questions and Vendor Confidentiality Frank Kramer, Fremark Company

INTRODUCTION As the new product evolves from the original idea into the laboratory stage of development, it becomes increasingly important to develop the means of producing the product. It is also important to secure the benefits of the creativity and hard work that was put into the project. There are three major considerations: • Equipment selection • To patent or not to patent • Vendor confidentiality agreements

PRINCIPLES FOR EQUIPMENT SELECTION Preparing the Flowsheet Prepare a process flowsheet as soon as you have a fairly good idea of the new product definition. The flowsheet will help identify the key steps in the 143

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process and whether they require unique types of equipment. It will also show where there may be possibilities, by slight modification of the product, to gain major simplification in the required equipment.

Modifying the Flowsheet The flowsheet will be modified many times as the product evolves into its final commercial definition. As the product changes, there will have to be corresponding changes in the desired equipment and the associated process variables. By developing the product and flowsheet in parallel, we have a much better opportunity of choosing the most appropriate equipment for the new product.

Selecting Equipment When selecting equipment, remember that the equipment should fit the product; the product shouldn’t be forced to fit the equipment. Of course, if appropriate equipment is available and with minor changes, can be made to fit the product, it should be used. If suitable equipment is not available and an important step in the process is involved, developing your own equipment may be necessary. This is a situation many companies face frequently and successfully.

Developing Specially Made Equipment In developing your own equipment, there are several rules, the most important of which is “Keep it simple.” It is often helpful to use outside groups who are experts in the technologies involved, if available, to develop new equipment. It is also important to remember that foods are generally complex and can be chemically and biologically unstable. Therefore, equipment design requires careful thought so that materials and process variables will not react adversely with the product or be at a pH and/or temperatures that will enhance microorganism growth. Figure 11.1 illustrates how a product, a layer cake with corrugated side icing, could be produced two ways. The one with vertical corrugations would offer much better opportunities for automation. The cake was modified to take advantage of this option. This was done at a very early development stage, prior to formal consumer studies. Making an appearance change would be very difficult after formal consumer studies showed general approval for the product.

Summary of Equipment Selection A well-executed new product development should marry well with the process to be used to ensure that the product will be produced economically, consistently, safely, and with regard to consumer acceptance. Engi-

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FIG. 11.1 Two prototype layer cakes—different side icing designs. neers should not design equipment by themselves without product knowledge, and food technologists should not develop products without a partnership with the engineering group.

TO PATENT OR NOT TO PATENT You do not have to be a lawyer to realize that a new product, process, or type of equipment may be patentable. If the idea is new or different, has recognizable benefits, and especially if it provides a surprising result, there is a good chance that it can be patented. A patent attorney will make the judgment as to whether the idea or concept is patentable and then will write the patent application for you. A patent is a legal way to protect intellectual property for a period of time, in the United States twenty years from the application (this length of time varies for different countries). The alternative way to protect an invention is to maintain a trade secret. US patents consist of the following elements: Title, Date, Patent number Inventors’ names Name of assigned organization (if assigned) Application number and date References to “Prior Art” (previous patents on subject) Abstract of invention

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Drawings Background information Invention summary Description Examples of invention use Claims: Specific statements as to what is new and inventive in order of importance

Implications of Patenting As already mentioned, patents provide technical insulation from competitors for twenty years, backed by the U.S. legal system. Most reputable companies will recognize patents and not try to infringe on them. In many instances, competing companies will pay the inventor or patent holders a royalty fee for sharing the use of the patent with them, a considerable benefit. Occasionally, however, if a company believes his competitor has a weak patent, the challenger may try to overturn the patent in court. Some companies choose to form a hub of additional patents around the original, protecting the first one and obtaining defensive patents; in other words, patenting inventions that the company has no intention of using just to prevent a competitor from using them.

Disadvantages of Patents The principle disadvantage of a patent is that it is a published document. Frequently, just knowing that something unique can be done, as would be revealed in a patent, is enough for an inventor to conceive a way to do the same thing without infringing on the patent claims. As shown in the list of elements in a U.S. patent, examples are an important element. Very often some confidential formula or process data is included in describing the example. Developers frequently look for information about their competitors’ successful processes by examining patent examples. There is a time limit for patent protection, and if it takes many years beyond the application date to take advantage of the invention, the inventors will not be able to get the rewards they were seeking. In contrast, there is no time limit on a trade secret.

Importance of a Memorandum of Invention (MOI) An active, creative R&D organization has (or should have) a constant flood of new ideas and potential patentable concepts. The company cannot patent all of them, but the following information should be secured for possible future use: • Patentable concept • Invention date • Names of the inventors

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The MOI is a document that has a legal basis for building a future patent application; it is a two- or three-page document prepared by the inventor. At least one copy of it should be filed by a company manager. It is a simple form with these headings: • • • • • • • • •

Title and preparation date Date of invention of the concept Inventors and their titles Brief description of invention Prior art Detailed description of invention What’s new and what are the advantages over the state of the art Inventors and sates (signed) Witnesses—two persons stating, “Read and understood by me,” with a date (signed)

Trade Secrets It is very difficult to keep trade secrets, especially these days when personnel change rapidly. In their next job people may inadvertently or purposefully reveal their former employer’s secrets. Plant visitors, vendors, and dissatisfied employees can also reveal company secrets. It is often said that one of the best research sources for new technology is ambitious vendors. If the company can maintain a rigid discipline regarding visitors and control over what their own employees can observe or know, it may possible to maintain complete confidentiality. Trade secrets are kept most successfully by plants located in a remote geographic area with long-serving, loyal employees. However, in a general way, a rigid atmosphere can also stifle proactive creative activities. A favorite example of a trade secret is the formula for Coca-Cola. Some astute food chemists have determined the formula and can make a CocaCola clone. Trade secrets such as particular formulas are very difficult to keep confidential. These examples illustrate a variety of patented food processes and their impact on the company they were assigned to; they are all personally known by the author. Continuous Gelatin Extractor: U.S. Patent 1955 A process was developed to produce gelatin from calfskins in a uniform continuous operation, replacing a labor-intensive batch process. This process is still used today, providing better quality and higher yields in addition to the labor savings. It is likely that some competitors are now using this process as the patent has expired.

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Automatic Coffee Pouch Packer: U.S. Patent 1973 Coffee pouches for office service were normally counted manually into a carton for shipment. Besides the labor cost, the manual count resulted in a 2–4 percent carton overfill. The automatic packer eliminated both problems, and six of these units were built and successfully put into operation. Our attempt to build and sell these machines to coffee producers failed when a dishonest salesperson with free access to our facilities took the idea and illegally built packers competing with us. For various reasons, pursuing the infringer legally was not felt to be beneficial. This infringement could have happened whether the automatic packer was patented or a trade secret. Continuous Automated Baked Bean Oven: U.S. Patent 1974 This development was needed to replace near-antique, unsafe ovens and labor-intensive operations. This patented process, developed in less than two years, provided a cost effective process that consistently produced high quality baked beans. The patent proved very valuable later when the company was sold—a valued asset providing a multimillion dollar capital gain for the business. Coffee Decaffeination Using Resins: U.S. Patent 1978 This unique process of using resins for coffee decaffeination successfully reached the pilot plant stage, demonstrating high yields and good product quality. At the same time, a process with even more promise for yield and quality was available; this was the use of supercritical CO2 extraction of caffeine. Our efforts on resin stopped, and the supercritical CO2 process became the process that is now widely used. The resin process could have been licensed and now, more than twenty years later, is available for anyone to use.

Confidentiality Agreements It is clear from the coffee pouch packer example above (and many similar cases), and the general concerns for confidentiality that agreements are important, whether for protection of patents, trade secrets, or business activities. Plant visitors and vendors are obvious targets. Many companies allow open-door plant tours but they are always in specific areas of the plant, usually where there are only well-publicized activities going on. Reputable vendors understand that they will have to sign a confidentiality agreement and will readily do it when asked. The confidentiality agreement should be drawn up as a form by the company’s lawyer, and the agreement will include the following elements:

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• Scope of technology and/or the plant sights to be visited • Clear statement that the vendor will not disclose any information disclosed or learned from the visit to any third party unless learned independently from published books, documents, patents, or verifiable outside sources • All patentable ideas originating from this visit will belong to the company • Vendor responsibility to adhere to this agreement from the date of signing has to be stated If the agreement extends only for a short a time, for example, one or two years, it is a disadvantage to the company because there may not be enough time to capitalize on the technical advance before a competitor moves in. If stretched to a very long time, the vendor will have a problem. Certainly after approximately ten years, there could be confidentiality leaks from the company through no fault of the vendor, and yet he could be held responsible for it. Normally the agreement is for four to six years after signing. If the vendor is the inventor of the potential patent, conceived during the life of the agreement, there is another consideration. If the invention can be used for noncompeting applications, the company usually will grant a royalty-free license to the vendor upon request.

SUMMARY Selection of equipment should be considered early in the project and should be based on fitting the product needs—not fitting the product to available equipment. Developing new equipment requires a detailed knowledge of the properties of the foods involved as well as engineering. Patents establish insulation against competition and can be very profitable when positioned properly. Vendor confidentiality agreements are relatively simple documents to prepare, vendors accept them readily, and they provide the opportunity to take full advantage of specialized expertise.

12 The Role of Food Packaging in Product Development Aaron Brody

INTRODUCTION The primary function of food packaging is protecting contents against damage, water gain or loss, and biological deterioration. The secondary function is to facilitate distribution of the product to the consumer. Packaging should also identify and contribute significantly to the marketing of the product. Food packaging must perform these functions at minimum system cost. Packaging assists product preservation by reducing contamination and recontamination and the probability of spoilage; it resists pilferage and tampering, and it makes effective use of distribution space and minimizes labor in marketing. Packaging fosters effective marketing of the food through distribution channels. The term packaging deals with the materials in contact with the product which serve as the primary barrier and with secondary and unitizing distribution packages, structure, and equipment to marry the package to the food, end use, and total costs. 151

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A food’s physical, biological, and chemical attributes determine the protection required from packaging to slow or prevent its quality loss and/or deterioration. The distribution system influences the product’s environment and thus imposes requirements for its protection. Total packaging systems economics including materials, labor, and operations together must be minimal. Equipment for integrating the package structure and the food must be effective, efficient, and economic, and must fit the marketing needs.

FOOD DETERIORATION VECTORS Food deteriorates by means of biochemical, enzymatic, microbiological, and/or physical vectors. The biochemical mechanism is the result of interactions of inherent food chemicals because of their proximity and reactivity with each other and often include oxidation. Enzymatic changes are biochemical actions catalyzed by naturally occurring or microbiological enzymes. Microbiological deterioration from yeasts, molds, and bacteria is the most common food spoilage cause and can, in not-infrequent circumstances, be of public health concern. Physical changes are usually due to gain or loss of water or damage arising from impact, stress, and other factors. Elevated water activity in dry food increases the rate of internal biochemical reactions, and so water and water vapor must be kept from such foods. In foods with high water contents such as fresh leafy vegetables, water loss radically changes the physical characteristics; excess gain of moisture in many foods can lead to favorable conditions for microbiological growth. Many biochemical activities are increased by oxygen in the air, and so air exclusion should be a function of packaging.

PACKAGING REQUIREMENTS OF SPECIFIC FOODS Fresh food products are unprocessed or limited to cleaning and trimming. Fresh or minimally processed foods should be consumed rapidly after harvest, catch, or kill, and thus should be handled to retard quality loss and spoilage, which is relatively rapid at ambient temperature and slowed by temperature reduction. Commercially, fresh meats and fish are chilled rapidly to below 50°F (10°C). Most fresh vegetables and fruits, except for those injured by chilling (for example, those of tropical origin), are reduced in temperature to below 40°F (4.4°C). Optimum distribution temperature for such foods should be just above freezing, for example, 31°F (-1°C). Minimally processed foods include those which have been processed without sterilization to facilitate their distribution or use and to help retard quality losses, but which are still subject to rapid deterioration if not carefully handled.

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Processed foods are those which receive intensive action to achieve longterm shelf life without microbiological deterioration at ambient temperature and include almost all canned, frozen, and dried foods.

Fresh Foods Meat Fresh meats include beef, lamb, veal, pork, poultry, and fish, all of which are vulnerable to microbiological, enzymatic, and physical deteriorative changes. The main objectives of fresh red meat preservation are to retard microbiological spoilage and weight loss, and usually, but not necessarily always, to deliver red color at consumer level. In distribution, beef and pork are usually packaged under reduced oxygen/temperature conditions in high oxygen/water vapor-barrier flexible structures to retard moisture loss and microbiological growth. Fresh meats are distributed to retail channels at temperatures below 40°F (4.4°C) to retard microbiological growth. The natural color of meat pigment is purple while the bright red color of the freshly cut meat is an oxygenated oxymyoglobin. Oxygen-permeable flexible package materials such as polyvinyl chloride (PVC) film overwrap and expanded polystyrene trays permit oxygen to enter the package to generate the bright red color while retarding the moisture loss. Beef and Pork.

Poultry is highly susceptible to microbiological deterioration and is a substrate for the growth of potentially pathogenic Salmonella microorganisms. Further, the fat is readily oxidized. It is essential that temperature be reduced rapidly. Packaging at plant level is in structures that retard moisture loss. Primary packages of poultry are often further master-packed in polyolefin film bags as secondary packaging. Ground poultry is subject to red color loss through oxidation.

Poultry.

Fish, which is usually contaminated with psychrophilic microorganisms, is often packaged to retard water loss. Package material for frozen fish, a common distribution method, generally is low moisture permeability to permit long-term distribution without freezer burn, that is, surface desiccation from sublimation.

Fish.

Fresh Fruit and Vegetables The major deteriorative mechanism for fresh fruit and vegetables is enzymatic, but they also suffer from the presence and growth of natural microorganisms. Physical damage to the produce, such as bruising, can generate channels through which the microorganisms can enter to initiate

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or accelerate spoilage, which is then increased by the normal enzymatic activity of the tissues. Fresh produce packaging is often in bulk in a variety of wood crates and corrugated fiberboard cases, often waxed to protect both the fiberboard and the contained produce from moisture. Bulk produce is often repackaged at wholesale or retail level in gas-permeable flexible materials such as perforated polyethylene film. Air is necessary to avoid respiratory anaerobiosis. Fresh-cut produce is factory-packaged in polyolefin film to propagate internal modified atmosphere to extend chilled shelf life.

Minimally Processed Foods Minimally processed food products receive some added processing to enhance their value to consumers but are not sterile, and so they are subject to microbiological spoilage and generally require refrigeration to ensure safety and quality retention. Cured Meats Ham, bacon, frankfurters, and similar products are processed with salt and nitrite to reduce water activity and to retard microbiological growth. Cured meats have refrigerated shelf lives measured in weeks. Most cured meats are packaged under reduced oxygen in high-oxygen-barrier, nylon-based package materials and distributed under refrigeration. Some salt nitrite-cured meats are packaged in gas-barrier film under nitrogen at atmospheric pressure, after oxygen removal, to avoid product damage due to differential pressure of vacuum packaging. Reduced oxygen also limits deteriorative oxidative reactions such as lipid rancidity and color changes. Dairy Products Thermal processing is engineered to destroy disease microorganisms in dairy products but not to destroy all of the microorganisms that could cause spoilage. Therefore, pasteurized dairy products are almost always distributed under refrigeration. Extrusion blow-molded high-density polyethylene bottles, labeled polyester bottles, or polyethylene-coated paperboard gabletop cartons are usually employed for packaging and distributing refrigerated pasteurized fluid milk in the United States. In Canada, flexible pouches made from medium-density polyethylene are used for fluid milk packaging. In aseptic packaging, the milk is sterilized outside of the package in heat exchangers and packaged under sterile conditions in high-barrier paperboard/aluminum foil/plastic lamination cartons, or all-plastic gas/water vapor package structures sterilized independently. The sterile product and package are assembled in a sterile environment in which the package is

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filled with the product and hermetically sealed to produce a packaged sterile milk that may be distributed at ambient temperature but is often benefited by refrigerated distribution. Cheeses are fermented milk (or soy-based) products subject to further microbiological deterioration if not packaged and distributed under refrigeration. Cheese products are maintained under refrigeration in flexible gas/moisture-barrier plastic film structures, or plastic cups or tubs or trays. Much long-time-cured cheese is packaged under nitrogen or nitrogen/ carbon dioxide to help retard oxidative spoilage. Ice cream is usually milk fat plus sugar—not subject to microbiological deteriorations because the below-freezing-point distribution; also use temperatures are too low for microbiological growth. Ice cream packaging is generally minimal: paperboard cartons, polyethylene-coated paper for novelties, molded high-density polyethylene tubs or, for bulk, composite paperboard tubs or cartons. The polyethylene is to reduce moisture and fat damage to the package material.

Fully Processed Foods Fully processed foods are treated and packaged so that their ambienttemperature shelf lives can be indefinite from a microbiological standpoint. Biochemical changes can, however, limit high-quality retention periods. Canned Foods Canning prolongs shelf life by imparting considerable heat to destroy microorganisms and enzymes. Sterility is maintained by hermetic sealing in impermeable packaging such as metal cans, or glass jars that preclude recontamination. The resulting food is fully cooked as a consequence of the heat. Whether the package is a metal can or glass jar, air that could otherwise accelerate oxidative damage and internal pressurization is removed. Air removal, however, leads to internal anaerobic conditions which can permit the possible growth of pathogenic Clostridia microorganisms, if they survive the heat process or enter by recontamination. The package is hermetically sealed and then heated. The package structure must be able to withstand up to approximately 212°F (100°C) temperature for high-acid products (pH 4.5) and up to 260°F (127°C) for low-acid products (pH 4.5) which must receive added heat to destroy heat-resistant pathogenic spores. The thermal process is calculated on the basis of the time required for the most difficult-to-heat site within the packaged food to achieve a time-temperature integral that will destroy Clostridia spores. After reaching that temperature, the package must be cooled to retard further cooking and consequent biochemical deterioration. Packages for canned foods must exclude air, withstand heat and pressure, and maintain their hermetic seals during processing and distribution.

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Attempts have been made to thermally sterilize in gas-barrier flexible plastic or plastic composite pouches or trays, for example, a flexible retort pouch. Semi-rigid retort trays fabricated from gas-barrier plastic have higher surface-to-volume ratios than cylindrical cans and are generally heatseal closed. Plastic cans intended for heat sterilization and subsequent microwave reheating by consumers have bodies constructed from highoxygen-barrier plastic, usually multi-layer plus double-seam easy-open rigid aluminum closures or heat-seal closures. Frozen Foods Freezing reduces product temperature to arrest microbiological, enzymatic and biochemical activities. Whether the product is frozen inside or outside of the package, most freezing processes use high-velocity cold air or liquid nitrogen to freeze. Individually quick frozen (IQF) products such as french fried potatoes are packaged after freezing in polyethylene-coated paperboard cartons, polyethylene film pouches, or polyethylene-coated paper pouches. Many prepared foods are packaged in dual-ovenable packaging such as crystallized polyester trays or polyester-coated paperboard or molded pulp trays. Dry Foods Removing water from food reduces water activity, its subsequent biochemical activity, and the potential for microbiological growth. Dry products include those directly dried from liquid form, such as instant coffee, tea, and milk, or mixes of dried components. Moisture entry changes physical and biological properties. Engineered dry products include beverage mixes such as blends of dry sugars, citric acid, color and flavor, and soup mixes which may include (for example) dehydrated meat, noodles, and vegetables. Such products must be packaged in moisture-resistant structures such as laminated pouches to minimize water vapor entry. Products containing relatively high fat, such as baked goods or some soup mixes also must be packaged so that the fat does not interact with the packaging materials and ultimately become oxidized from exposure to air. Flavoring mixes that contain seasonings and volatile flavoring components can unfavorably interact with interior polyolefin package materials to remove or scalp flavor from the product. Packages for dry products must be hermetically sealed. Fatty Products Fat and oil products include those with and those without water. Cooking oils, such as corn or canola oil and hydrogenated vegetable shortenings, contain no water and so are stable at ambient temperatures if processed to preclude rancidity.

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Unsaturated lipids are susceptible to oxidative rancidity which begins with the breaking of fatty acid chains at double-bond sites. Oils are more subject to oxidative rancidity than fats but are often sparged with and packaged under nitrogen to reduce oxygen in the product. Hydrogenated vegetable shortenings, generally whipped with nitrogen, are packaged under nitrogen in composite paperboard lamination cans to minimize oxidative rancidity. Edible liquid oils are packaged in polyester bottles. Margarine and butter, and analogous bread spread products are waterin-oil emulsions containing water-soluble ingredients such as salt which contribute flavor and color to the product. Usually these products are distributed at reduced refrigerated temperatures to enhance quality retention. Fatresistant packaging such as coated paperboard, aluminum foil/paper lamination wraps, and polypropylene tubs are used to package bread spreads. Cereal Products Dry breakfast cereals are hygroscopic and sufficiently low in water content to be susceptible to moisture absorption and so require good water vapor and fat-barrier packaging. Packaging should retain product flavors. Breakfast cereals are usually packaged in coextruded polyolefin films fabricated into pouches contained within printed recycled paperboard carton outer shells. Sweetened flavored cereals are packaged in gas-barrier plastic films or laminations to retard water vapor and flavor transmission. Soft bakery goods such as breads, cakes, and muffins are aerated starch structures vulnerable to dehydration. To retard water loss, high-moisture barriers such as coextruded polyethylene film bags or polyethylene-coated paperboard cartons are used for packaging. Hard baked goods such as cookies and crackers generally have low water but relatively high-fat contents. Water can be absorbed so that the products can lose their desirable mouthfeel properties and become subject to oxidative rancidity. Package structures for cookies and crackers include fat- and moisture-resistant coextruded polyolefin film pouches within recycled paperboard carton shells and thermoformed plastic trays overwrapped with oriented polypropylene film. Soft chewy cookies are packaged in high-moisturebarrier laminations often containing aluminum foil to improve the barrier. Salty Snacks Snacks include dry cereal or potato products such as potato and corn and tortilla chips. Roasted nuts represent another snack food category that is high fat, low moisture and, therefore, susceptible to loss of texture and flavor with increased moisture. Snack food packaging problems are often compounded by the presence of flavorings such as salt, a lipid oxidation catalyst. Snacks are usually packaged in flexible pouches made from metalized or coated oriented polypropylene to provide low moisture transmission

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and now sometimes metalized for enhanced barrier. Snack food producers depend on rapid and controlled product distribution to minimize fat oxidation. Most salty snacks today are packaged under nitrogen both in pouches and in rigid containers such as paperboard composite cans to extend ambient-temperature shelf life. Candy Chocolate, a mixture of fat and nonfat components such as sugar and milk, is highly vulnerable to flavor change. Ingredients such as nuts and caramel are susceptible to water content variation. Chocolates, which are generally shelf stable at ambient temperatures, are packaged in fat-resistant papers and moisture/fat barriers such as pearlized polypropylene film. Hard sugar candies are flavored amorphous sugars which are very hygroscopic. Sugar candies are packaged in high-water-vapor-barrier packaging such as oriented polypropylene film. Beverages Beverages include still and carbonated products as well as alcoholic or nonalcoholic products. Beer and soft drinks contain dissolved carbon dioxide which generates internal package pressure. Thus, the package must be capable of withstanding the internal pressure of carbon dioxide especially when there are temperature increases in distribution. Aluminum cans and glass and polyester bottles are the most commonly used package structures for beer and carbonated beverages. Beer is more sensitive than other carbonated beverages to oxidation, loss of carbon dioxide, external off-flavors, and light. Most American beer is thermally pasteurized after closure. Thus, the internal pressure within the package can build up to over 100 psi at 145°F (63°C), a usual pasteurization temperature. Beer and other carbonated beverages are generally packaged at very high speeds, often in excess of 2000 units per minute, meaning that packages must be free of defects and have uniform dimensions. Still beverages include water, which requires very low odor-containing packages, and fruit juice and juice drinks, which usually require lowoxygen packaging to reduce oxidative flavor and color deteriorations and temperature resistance to permit hot-filling to reduce the microbiological population. Hot-filling at temperatures of approximately 190°F (90°C) reduces oxygen and pressure, which the package must withstand.

PACKAGE MATERIALS AND PROCESSES A wide variety of package material structures and converting processes produce a broad range of packaging to accommodate the wide variety of food packaging applications: paper, metal, glass, and plastic that are used in cans, bottles, pouches, trays, cups, and other containers.

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Paper Paper is primarily composed of cellulose fibers. The packaging properties of paper (its strength and mechanical properties) depend on the selection of the fiber sources and their treatment at the paper mill. Whatever properties paper and paperboard possess are generally derived from mill impregnation with additives or plastic, surface coating, and/or laminating. Materials used to enhance paper barriers include plastic coatings with polyethylene and blended resins. Most packaging papers offer little more than protection from light and mechanical damage and a printing surface. Paper may be converted into flexible packaging or used as base structural material for construction of semi-rigid containers. Flexible packaging applications include multi-wall bags and pouches. Some of the important types of paper used for bag purposes include virgin Kraft paper and, less important in 2001, greaseproof papers and glassines. (Glassine is supercalendered Kraft paper used as a fat barrier; the fluted cups of chocolate candies are made of glassine) Semi-rigid paperboard containers are constructed from paperboard which is paper greater than 0.010 in. (0.254 mm) in gauge (caliper) and include folding cartons, corrugated fiberboard cases, and spiral-wound composite cans. Most paperboard cartons require the use of inner liners or overwraps, made usually from coextruded plastic or films because paperboard is not a barrier. Paperboard Folding Cartons Paperboard folding cartons protect food products from impact and crushing. Dense or easily flowing dry products such as rice or pasta can be retained by the paperboard carton structure. Paperboard for packaging food not in contact with the food contents may be made from recycled paper and paperboard. Such structures may have an interior virgin flexible material liner that prevents direct contact between the product and the recycled paperboard of the carton and thus avoids potential food contamination. Carton liners such as coextruded polyolefin film pouches help prevent loose product sifting and moisture migration. Polyethylene extrusion coatings cover the interior or exterior of paperboard folding cartons if they are used to contain liquids as with heat-sealable gabletop milk and juice and juice drink cartons. Plastic coatings can be used within paperboard cartons when higher levels of water/moisture protection are required. Composite Paperboard Cans Composite paperboard cans usually are either spiral- or convolute-wound paperboard, or aluminum-foil-laminated paperboard bodies, with metal, paperboard or flexible closures. Composite paperboard cans using aluminum foil interior are used for packaging refrigerated biscuit and cookie

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doughs, some salty snack foods, juice concentrates, and hygroscopic dry powders. Convolute-wound cans are used for cocoa powder, roasted and ground coffee pouches, and crackers. Distribution Cases Most food products in the United States are distributed in corrugated fiberboard cases engineered to meet governmental regulation specifications. Polyethylene film wrapping of corrugated fiberboard trays is less common in the United States than in other countries. Equipment erects trays, fills the trays with primary packages such as cans, jars, or cartons, wraps the unitized grouping in polyolefin shrink film, and heat-shrinks the combination. Shrink film wrapping keeps primary and secondary packaging materials clean and dry.

Metal Cans Most cans are aluminum for beer and carbonated beverages, with two- and three-piece steel cans usually used for food and still beverage packaging. Two-Piece Cans Almost all aluminum and approximately half the steel cans are two-piece cans, that is, having a cuplike body with a mechanically seamed closure. Two-piece can manufacturing starts with a coil of metal fed into a cupping press, which forms the sheet into shallow cups that are fed into an ironing press, where successive rings draw the can body side wall. Interior coatings to protect the metal are applied. Three-Piece Cans Three-piece steel cans consist of a body and two ends. For welded side-seam cans, a sheet of steel is coated, baked to cure the coatings, and slit into body blanks. The cut blanks are fed into the body-maker and the blank is formed into a cylinder with the edges overlapped at the side seam and welded. Sideseam coating coverage is achieved by applying a plastic material to both sides of the hot side seam after welding. Residual heat from the weld fuses and cures the stripe coating. At a flanger, the top and bottom edges are curled outward to form the flange. Roll- or die-necking reduces the can body diameter at the end to reduce end material use. When the flanged or necked-and-flanged three-piece can bodies leave the flanger after top-coat spraying, one end is applied at a double-seamer. Protective Coatings Interior can coatings limit interactions between cans and their beverage or food contents. Exterior can coatings may provide protection against the en-

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vironment or provide decoration. Coatings are applied to three-piece can blanks in the flat before fabrication. Because of the metal deformation with surface-coating disruptions that occur in draw and ironing operations, twopiece containers must be coated internally after fabrication. Among the internal coatings for food containers are oleoresinous, vinyl, acrylic, phenolic, and epoxy-phenolic materials. Roller coating and spraying are used for the application of protective coatings to metal containers. Roller coating is used if physical contact is possible (for sheet and coil). Spraying techniques are used if physical contact is not possible (two-piece cans). Coatings on cans are heated in convection ovens after application to achieve solvent removal, oxidation, and/or polymerization. More recently, polyester and polypropylene films have been laminated to base steel sheets to impart protection to the metal of two-piece drawn cans.

Glass Packaging Glass is sand combined with sodium carbonate and calcium carbonate, with stabilizers such as aluminum oxide. Cullet from crushed glass is a part of almost every raw material batch. Generally glass is chemically inert and impermeable. Coatings protect the original high strength of glass containers and retard strength deterioration. In glass fabrication, newly molded hot bottles and jars are subjected to an atmosphere of vaporized metallic compounds that react with the glass surface by chemically bonding, resulting in a coating which provides permanency to the cold end treatment. The mixture of materials for manufacturing glass containers is prepared in unit batches. Mixing ensures homogeneity of the batch, necessary to produce quality glass. Cullet of the same color and basic composition as the glass to be melted may be added to the batch. Press-and-blow operations are used to produce wide-mouth containers and, in recent years, narrow-neck containers including beer bottles. The difference between the press-and-blow operation and the blow-and-blow operations is that the parison is pressed to shape by a plunger that fills the complete void in the parison. The rapid transfer of heat and the mechanics of blowing the glass create both thermal and mechanical stresses in the newly formed bottle. To relieve the stresses, the newly formed bottles undergo heat-annealing processes.

Plastic Package Materials Most plastic package materials are thermoplastic, i.e. reversibly fluid at high temperatures and solid at ambient temperatures. Plastic materials may be modified by co-polymerization, blend additives, alloying, and/or surface treatment.

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Low-Density Polyethylene (LDPE) Slightly cloudy, with high tensile strength and good moisture-barrier properties but high gas permeability, LDPE film is employed for shrink and stretch bundling and pallet wrapping, for drum and case liners for bulk foods, and for packaging bread, fresh vegetables and fruit, and stable food products. More LDPE plastic resin is used than any other for food packaging. LDPE density for film or injection or blow molding ranges from 0.90 to approximately 0.93 g/cc3. To make film, the resin is melted in a heated hollow barrel and converted to film by extruding through a circular or slot die. Tubular film material is collapsed and slit into film ranging in gauge from less than 0.001 to 0.003 inches (0.25 to above 0.75 mm). Linear Low-Density Polyethylene (LLDPE) Films from LLDPE resins have higher tensile and elongation-to-break strengths than films from LDPE resins and higher but broader heat-seal initiation temperature. Impact and puncture resistance are also improved, but moisture and gas permeation properties are similar to those of LDPE films. Linear low-density polyethylene films are used in many of the same packaging applications as LDPE with thinner gauges. High-Density Polyethylene (HDPE) High-density polyethylene resins range in density from 0.93 to 0.96 g/cm3. HDPE films are more translucent and stiffer than LDPE films, with moisture and gas permeabilities slightly higher than those of LDPE. Softening and melting points are high, and HDPEs are not easily sealed on flexible packaging equipment. High-density polyethylene film is produced by blown-film extrusion methods. The most significant packaging use for HDPE, however, is in extrusion blow molding of milk, water, and other bottles. Polypropylene (PP) Oriented polypropylene film (OPP), a widely used food package material, may be classified into heat-set and non-heat-set, blown and tentered, coextruded, and coated. Tenter is a machine and tentering is a process for transverse stretching. Orientation improves heat resistance and other physical properties. Biaxially oriented heat-set oriented polypropylene film (BOPP) is used to wrap bakery products, as lamination plies for snack chip pouches, for packaging pastas, and for numerous other pouch and wrapping applications as well as a vacuum metallization substrate. Non-heat-set OPP is often used as a transparent shrink film overwrap for printed paperboard cartons of candy, serving as a moisture barrier and a means to enhance aesthetic appeal.

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Oriented polypropylene film may be manufactured by blown or slot-die extrusion processes. In the slot-die or tenter-frame process, polypropylene film is extruded through a flat die and stretched in the machine direction. Gripped along its edges, the film is stretched laterally during longitudinal motion to impart transverse directional orientation. To impart heat-seal and other desirable properties, the film may be coated with acrylic or PVDC resin or extruded with another polyolefin. Almost all OPP producers today have expanded the core of the film, creating a cavitated structure with lower density, greater opacity, and a stiffer more paper-like feel, often designated opacified or pearlized polypropylene. Vacuum metalization of either transparent or opaque film enhances water vapor and gas-barrier properties. Oriented polypropylene film has excellent water vapor but mediocre gasbarrier properties, excellent clarity, and good heat-seal properties in its many packaging applications. Polyvinyl Chloride (PVC) Plasticized PVC film is transparent and soft, with high gas permeation but low water vapor transmission rates. PVC film is generally produced by blown-film extrusion. The main packaging applications of PVC film are as an air-permeable but moisture-impermeable wrap for fresh red meat, poultry, and vegetables. Transparency combined with the ability to transmit air to maintain red meat color or to minimize the possibility of respiratory anaerobiosis in fresh produce offer advances in these uses. Polyester (PET) Polyethylene terephthalate (PET) polyester film possess fairly good gas and water vapor properties which can be enhanced by PVDC glass coating or by metalization, very high tensile and impact strengths, and fair temperature resistance. Applications include using as an exterior web in laminations to protect aluminum foil and coating with PVDC to function as the sealing web for vacuum/gas flush packaging of cured meat, cheese, or fresh pasta. Polyester is manufactured by extrusion through a slot die followed by biaxial orientation. Polyester film is a major substrate for vacuum metalizing and silica coating, processes that enhance moisture and gas properties. Vacuum-metalized polyester film is used for large pouch packaging of wine, syrup, and bulk tomato and fruit products. Nylon Nylons are thermoplastic polyamide materials which are fairly good oxygen barriers in film or sheet form. Nylon films are usually tough and thermoformable but only fair moisture barriers.

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Nylon films are usually used in lamination or coated to ensure heat sealability and improve barrier properties. The major uses are as thermoforming webs for vacuum/gas flush packaging of processed meats and cheeses. Other uses include pouches for fresh red meat, boil-in-bag frozen foods, bag-in-box for wine, and the external layer for aluminum foil in cookie and vacuum coffee pouches. Polyvinylidene Chloride (PVDC) Polyvinylidene chloride (PVDC) is often known by its “Saran” designation. PVDC can impart high oxygen, fat, aroma, and water-vapor resistance to film substrates such as oriented polypropylene, polyester, and nylon. Of the major commercial resins and films, PVDC has among the best total moisture oxygen, aroma and fat-barrier properties; PVDC is almost insensitive to water and moisture. Mostly, PVDC is used as high-barrier component of laminations not containing aluminum foil. It is infrequently used alone in commercial packages because of difficulty of heat sealing. Polystyrene Expanding polystyrene resin by blending with gas delivers a low-density, opaque sheet useful for beverage bottle and plastic can labels to substitute for paper. It can also be used for thermoforming into trays for meat. Polystyrene sheet is a clear, easily thermoformable material. Coextruded Films In coextrusion, two or more resin melts are extruded simultaneously through the same die. Coextrusion permits intimate layering of precise quantities of functional materials. Incompatible plastic materials are bonded within the coextrusions with thermoplastic adhesive layers also coextruded. Coextruded films may be fabricated by extrusion blowing or slot casting. Among the relatively simple coextrusions, polypropylenes are coextruded with copolymer heat-seal layers. HDPE, LDPE and EVA resins may be coextruded to produce stiff, heat-sealable films for use as liners in cereal, cookie, and cracker cartons. Coextruded films of EVA and pigmented LLDPE are employed for packaging of frozen vegetables and fruits. Ethylene Vinyl Alcohol (EVOH) This polyolefinic resin is the best commercially available and most widely used oxygen barrier but is sensitive to moisture.

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Flexible Package Structures Flexible package materials are composed of both mono- and multilayer structures, with multilayer further subdivided into laminated, coated, and coextruded, or combinations. Mono- and/or multilayer films may be adhesive- or extrusion-bonded in laminating. In extrusion lamination, a thermoplastic such as polyethylene is extruded as a bond between the two flat materials which are assembled between nip rolls. Flexible package materials are printed in roll form by rotogravure or flexographic methods. The detail produced by rotogravure printing is finer than that produced by flexography. Rotogravure printing is usually used for long production runs and high-resolution reproduction, while flexography is usually used for shorter runs. Bag material is either small monolayer or large multi-wall, with paper as a substrate. Pouches are small and fabricated from laminations. Bags usually contain a heat-sealed or adhesive-bonded seam running the length of the unit and a cross-seam bonded in the same fashion. Preformed bags or pouches are opened by the food packager, filled with food product, and closed by adhesive bonding, heat-sealing, metal clipping, or sewing. Heavier gauge flexible materials, usually with nylon, are thermoformed in-line into trays to vacuum or gas flush package-cured meats or cheeses. Large quantities of flexible package materials are employed on horizontal form/fill/seal flow-wrap machines for unit packaging for candies, cookies, and crackers. In horizontal form/fill/seal operations with face-to-face fusion heat seals, the resulting pouches, usually aluminum foil laminations, are high moisture and oxygen barriers and used for packaging sensitive dry foods such as condiments and soup and beverage mixes. Most flexible package materials are used in vertical form/fill/seal applications to package loose flowable products such as potato and tortilla chips, and nuts. Vertical form/fill/seal machines usually use moisture-barrier flexible materials. In other applications, flexible materials are used to bundle multiples of cans, bottles, cartons or cases and to bind the cases or bags on pallets.

Semirigid Plastic Containers Most semi-rigid plastic is used in bottles and jars fabricated by injection, injection-blow, or extrusion-blow processes. Injection molding is used to fabricate closures, specialty packages, and polyester bottle preforms. In conventional injection molding, the plastic resin is melted in an extruder which forces a measured quantity or shot into

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a chilled mold. The pressure of the extruder forces uniform plastic distribution throughout the mold. Cooling the mold solidifies the plastic. Cups and tubs for dairy products, specialty frozen-food applications, and returnable distribution cases for carbonated-beverage and milk bottles are injection-molded as are snap-on reclosure covers for metal and paperboard composite can closures. Many bottle and jar closures are injection molded from polypropylene. Injection molding is used to prepare polyester preforms for subsequent blow molding into bottles (for example, carbonated beverages, water, and salad dressings) and jars (for example, peanut butter). Plastic resins such as polyester with narrow melt temperature ranges require sequential fabrication steps. A tube-shaped parison is injected at melt temperature and, after forming, precisely reheated for stretching or blowing into a bottle or jar. Thermoforming includes the extrusion of sheet thicker than 0.001 inches (24.7 micron) followed by forming the reheated sheet in an open-face mold by pressure or vacuum, or both. Sheets less than 0.001-inch gauge may be thermoformed in-line and filled with contents such as processed meats, cheeses, and pasta prior to sealing. Thermoformable plastic sheet may be mono- or multilayer, the latter being produced by coextrusion or lamination. Multilayer sheets are employed to incorporate high-oxygen-barrier materials between structural or high-moisture-barrier plastics. Both ethylene vinyl alcohol (EVOH) copolymers and PVDC are used as high-gas-barrier core layers, with polypropylene as the structural layers. In steam chest expansion, polystyrene resin in which gas is already present is molded with steam injection. The steam increases the temperature close to the melting point and expands within the structure to create beads with food cushioning and insulating properties. Foamed polystyrene is used for thermal insulation for hot cups such as are used for dry-soup packaging. Thermoforming is a common commercial technology to convert plastic sheet into tubs, cups or trays. The sheet is heated to its softening point and is forced by air pressure into an open-top chilled mold where it solidifies. Conventional thermoforming of polystyrene is a widely used technique for producing tubs for dairy products and for cups and trays. Retortable multiplayer-barrier plastic cans and trays for low-acid foods may be hermetically sealed and thermally sterilized up to 260°F (125°C). Such high-gas/moisture-barrier cans or trays are fabricated from multilayer coextrusions with EVOH as the gas barrier, with polypropylene as the structural and water-vapor layer. Counterpressure and temperature during retorting must be carefully controlled to avoid can- and seal-closure distortion. In conventional blow molding, a single extruder forces the plastic through an annular die to form a tubular parison to be delivered into the open mold. A tube is inserted through the neck opening, and pressurized air is blown in to expand the plastic to the chilled walls of the mold.

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Extrusion blow molding produces narrow-neck bottles from high- and low-density polyethylene. Materials with a very narrow melt temperature range are formed into bottles by injection stretch blow molding. A test-tube shape is first formed by injection. This preform is transferred to the blow-molding machine and heated. The heated parison is transferred to a blow mold where it is stretched and blown to shape. PET carbonated beverage, water, and other liquid bottles are usually produced by injection stretch blow molding. Multilayer injection stretch blow molding has been commercialized for both narrow-neck bottles and widemouth jars. The basic form may also be fabricated by injecting multiple layers, such as polypropylene and EVOH or oxygen scavengers plus adhesive, or tie layers and blowing the parison. High-oxygen-barrier plastic cans containing polypropylene and EVOH are retorted after filling to resist retort temperatures up to 260°F (125°C). Recognition of hot-filling foods into plastic packaging, followed by sealing and cooling, has led to a need for high-oxygen-barrier plastic containers capable of resisting temperatures up to 200°F (85–90°C). Plastics with distortion temperatures above 212°F (100°C), for example, polypropylene, may be filled with hot liquid without thermal distortion.

SUMMARY Regardless of how much emphasis is placed on other elements of food product development, for example, on distribution control or packaging, the product is paramount. Although the product cannot reach the consumer without proper packaging, the product must remain as the core component. Packaging is indispensable to protect the contained product from the constant stresses of an always-hostile natural and man-made environment. These external influences include water, moisture, oxygen, microorganisms, light, dirt, animals, impacts and man, to cite a few. In addition to protection, packaging serves other functions such as communicating important and interesting information, portioning, fostering acquisition and dispensing, marketing, and reducing costs. The cost of food packaging is generally less than 10 percent of the retail price and saves many times that amount in deferred waste and spoilage. All food products could be packaged in metal cans or glass containers, but usually they can be more efficiently and economically packaged in one or more of a variety of structures such as cartons, pouches, bags, and wraps. These forms may be fabricated from a variety of materials each with properties that can provide the requisite functionality: paper, paperboard, plastic, or wood. Each designation represents a range of materials, each with its own singular properties, that can be employed alone or in combination with other like or dissimilar materials. The discipline of food

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packaging technology strives to optimize the basic protection of the contained product with the other functions mandated or desired to meet consumer needs.

BIBLIOGRAPHY Anonymous. “A Processor’s Guide to Establishment, Registration and Process Filing for Acidified and Low Acid Canned Foods.” FDA, HHS Publication 80–2126, U.S. Department of Health and Human Services, 1980. Anonymous. Food Packaging Technology International. London: Cornhill Publications Limited, (1991 Issue 4). Anonymous. “Aseptic Processing and Packaging of Foods.” Tylosand, Sweden: IUFOST Symposium, 1985. Benning, C. J. Plastic Films for Packaging. Lancaster, PA: Technomic, 1983. Briston, J. H., and L. L. Katan. Plastics Films, 2nd ed. Essex, England: Longman Scientific & Technical, in association with The Plastics and Rubber Institute, 1983. Broderick, H. M. Beer Packaging. Madison, WI: Master Brewers Association of the Americas, 1982. Brody, Aaron L. (ed.) Controlled/Modified Atmosphere/Vacuum Packaging of Foods. Trumbull, CT: Food & Nutrition Press, 1989. Brody, Aaron L., and K. Marsh (eds.) Encyclopedia of Packaging Technology, 2nd ed. New York: John Wiley & Sons, 1997. Bureau, G., and J.-L. Multon. Food Packaging Technology. New York: VCH Publishers, 1996. Gray, J. I., B. R. Harte, and J. Miltz, (eds.) Food Product-Package Compatibility. Michigan State University School of Packaging Seminar Proceedings. Lancaster, PA: Technomic, 1987. Griffin, R. C., S. Sacharow, and Aaron L. Brody. Principles of Package Development, 2nd ed. Westport, CT: Avi, 1985. Hanlon, J. F., R. Kelsey, and H. Forcinio. Handbook of Package Engineering, 3rd ed. Lancaster, PA: Technomic, 1998. Hotchkiss, J. (ed.) Food and Packaging Interactions. ACS Symposium Series 365, Washington, DC: American Chemical Society, 1988. Jenkins, W. A., and J. P. Harrington. Packaging Foods with Plastics. Lancaster, PA: Technomic, 1991. Kadoya, T. Food Packaging. San Diego, CA: Academic Press, 1990. Lopez, A. (ed.) A Complete Course in Canning—Book I. “Basic Information of Canning.” Baltimore, MD: The Canning Trade, 1987. Lopez, A. (ed.) A Complete Course in Canning—Book II. “Packaging; Aseptic Processing; Ingredients.” Baltimore, MD: The Canning Trade, 1987.

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Lopez, A. (ed.) A Complete Course in Canning—Book III. “Processing Procedures for Canned Foods Products.” Baltimore, MD: The Canning Trade, 1987. Osborn, K. R., and W. A. Jenkins. Plastic Films—Technology and Packaging Applications. Lancaster, PA: Technomic, 1992. Paine, F. A., and H. Y. Paine. A Handbook of Food Packaging. London: Leonard Hill, 1983. Paine, F. A., and H. Y. Paine. Principles of Food Packaging. London: Leonard Hill, 1983. Paine, F. A. (ed.). Modern Processing, Packaging and Distribution Systems for Food. New York: Van Nostrand Reinhold, 1987. Reuter, H. (ed.). Aseptic Packaging of Food. Lancaster, PA: Technomic, 1989. Risch, S. J., and J. H. Hotchkiss (eds.) Food Packaging and Interaction, II. ACS Symposium Series 473, Washington, DC: American Chemical Society, 1991. Robertson, G. D. Food Packaging—Principles and Practice. New York: Marcel Dekker, 1993. Sacharow, S., and Aaron L. Brody. Packaging: An Introduction. Duluth, MN: Harcourt Brace Jovanovich, 1987. Selke, S. E. M. Packaging and the Environment—Alternatives, Trends and Solutions. Lancaster, PA: Technomic. Swalm, C. M. (ed.) Chemistry of Food Packaging. ACS Advanced Symposium Series 135. Washington, DC: American Chemical Society, 1974.

13 Contract Packaging or In-House Manufacturing? Herbert Weinstein, PhD, Weinstein Consulting International

INTRODUCTION In most countries, tradition calls for a company—large or small—to be vertically integrated: that is, to be fully self-sufficient, with all the functions necessary to fulfil its objectives in-house. These functions most commonly include: • • • • • •

Marketing and sales Manufacturing Distribution Administration and finance Personnel Research and development–technical

However, tradition has changed! Companies today have organizations which differ from the traditional structures, not in the functions they 171

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perform, but in how the functions are fulfilled and even who is responsible for them. In this chapter, we will look at when manufacturing the products by an outside party might be an option that should be considered.

COMPANY FUNCTIONS In the following paragraphs, some of the different company functions are briefly described.

Marketing Marketing these days is responsible for sales, promotion, market research, and even technical product development in some cases, especially in smaller organizations.

Logistics Logistics includes purchasing, distribution, warehousing, transportation, planning, and sometimes, even administration of certain units of the company, for example, promoters and samplers, client maintenance, and others.

Personnel Personnel has the responsibility of the administration of the human resources, selecting and hiring new employees, preparing payrolls, administering benefits, and in many instances, maintaining morale and keeping the operative stance to allow the company to run with as few as possible disruptions.

Manufacturing Manufacturing has the task of producing the products the company sells. Sometimes this responsibility includes the purchasing function (which is to acquire the raw and packaging material), quality control, and maintenance. This area offers many opportunities for competitive cost control and cost reduction. In evaluating the company’s functions and assessing them for costeffective opportunities, the manufacturing area is usually the first one to be considered.

AVAILABLE STRATEGIES Low-Cost Producer One possible strategy to increase competitive edge in the manufacturing framework is to become a low-cost producer, which implies the following: low-cost production has become an important objective within the compet-

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itive environment. It is considered the company’s key competitive advantage, and it gives the organization a better value-added position. That is why, when considering these questions, ensuring that the prime objective of the company has been agreed and stated becomes important. Which of these is the objective? • • • •

Marketing Distribution Manufacturing Something else

In today’s competitive global environment, definition of the prime objective is a paramount focus for the enterprise. For most large and midsize food companies, marketing of consumer products is the corporation’s main goal. The production methods are of secondary importance as long as the products have a competitive advantage. Obviously, that competitive advantage is realized if the enterprise is indeed a low-cost producer.

Copacking In many instances, becoming the low-cost producer means that consideration must be given to outside manufacturing facilities which may be able to produce the product at a lower cost. If this is the case, copacking may be a viable option. The company must, of course, be cautious in selecting a third party to produce their product. This will be discussed in more detail later in the chapter. A real-life example of appropriate uses of outside manufacturing is by Kraft. Here are four reasons why Kraft turns to copacking: • Solving a short-term need for additional/emergency capacity which may result from a seasonal spike in sales or as a result of a manufacturing issue • Leveraging technology and experience which Kraft does not own internally • Lowering risk management and risk to market (time and/or equipment) • Utilizing cost advantages Solving Short-Term Needs Decisions on outside or third-party manufacturing must never be taken lightly. In a situation such as the emergency need for more product, the decision to go outside for further capacity is simple because there is no other short-term option. Generally the need is just for a short period of time;

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probably the product already has a defined manufacturing process which may be similar anyway to other products being produced by copackers. Examples could include powder mixes, liquid sauces, and others. Other reasons for going to a copacker need a more thorough analysis. Leveraging Technology and Experience That Kraft Does Not Own Internally Examining the question as to whether the technology is also available to competitors is important. If the technology is available, how is this going to affect, in the short and long term, the viability and life cycle of your own product? If the product becomes a success (which is what you plan; otherwise why launch at all?), is it going to be vulnerable because there is no technical competitive edge? Careful consideration must be given before deciding to share any experience with the competition. Lowering Risk Management and Risk to Market In new product development, evaluation of risk is becoming increasingly important, for both local and global reasons. In general, time is the most important factor. With many new products, being out there first implies not only a future dominant market position but also a deterrent for the competition. With respect to investment, new equipment has to compete with other potential investments, and consideration must be given to the best rate of return. Equipment which is bought to manufacture only one or two items and which is underutilized will not be a good investment! Utilizing Cost Advantages Having a clear picture of the real cost of production in-house is vital so it can be compared to the charge made by the copacker. They will generally charge per unit produced, and this should be on an all-inclusive basis.

EVALUATING COPACKING OPPORTUNITIES The Role of Engineering and Manufacturing in Product Development As discussed earlier in the book, the main steps of the product development process include: • • • •

Identify need/opportunity Develop the concept Test-market production Produce nationally

The engineering/manufacturing function has to participate during all the process, but their main responsibilities and obligations fall in the last two

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steps, the manufacturing of product for a regional test launch or for national distribution. The test-market production step usually offers a good opportunity to explore the option of copacking.

Key Considerations The following are the key considerations for copacking. Pros: • No investment in equipment—no money layout • More efficient use of time—no need to wait to have equipment in place • Low costs not paramount—as it is a test, the product can be less profitable (temporary basis) • Non-use of plant equipment—competition with the present production needs is not created or simply does not exist Cons: • Competition finding out your plans—even confidentiality agreements are not secure • New technology sharing—with a need to divulge details to obtain the most efficient process • Quality control considerations—might not be good enough for the company’s standards One factor which may be either pro or con is the use of copackers who exist exclusively to manufacture third-party products. Such companies would have no retail products of their own. Another way of looking at this is that they produce every product the same way. This can be an advantage or a disadvantage.

Other Types of Copackers Other options for copackings should be explored. Sometimes well-known, large food manufacturers have excess production capacity which is idle; they may be willing to copack for other food companies to reduce their unit own costs. In today’s world, where product differentiation is less and less, and the competitive advantage is gained by distribution and marketing, an option like this becomes attractive to both parties.

Limitations The main limitation to all these opportunities is that they really are casuistic, and therefore the arrangements and combinations are almost unlimited. Thus a new agreement must be negotiated in each case; it must include contracts that spell out clearly the responsibilities of each party, how the work

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is to be done, and what the expectations of each of the contracting bodies are. This is an important reason for the development team to participate and be well represented in the evaluation and in the negotiations with copackers. Typically, engineers, manufacturing personnel, purchasing individuals, and product development technical staff work as a team to evaluate comanufacturing candidates. Only after arduous negotiations can they accomplish adequate and mutually beneficial terms. Many copacking arrangements fail on the agreement details and end up in court. However, copacking is a useful technique; it should be used when it makes sense and benefits are proven for both parties.

Measures of Success for Third-Party Manufacturing If a copacking agreement is successful, the following should be observed: • • • •

Reduction or elimination of capital expenditure Accelerated schedules Effective use of relevant expertise Achievement of useful learning experiences

EXAMPLE: PUDDING POPS (JELL-O® PUDDING ON A STICK) When this product was initially designed and developed, the definition included that besides being an ice cream-like product (good tasting and all the other typical organoleptic characteristics), it should withstand frozenfood distribution temperatures rather than lower ice cream distribution temperatures. General Foods was in the frozen-food business, but not in the ice-cream business. After product development, it was clear that there was a need for manufacturing facilities that the company did not have; the product had to be produced in an ice cream plant. But the technology, a combination of instant pudding and COOL WHIP® mix frozen to form pops, had to be protected. The development team found an ice-cream manufacturing plant that was willing to allow the installation of equipment to produce the original mix (COOL WHIP® and instant pudding mix), which then went through the regular pop-making equipment to produce and package the peculiar format of the finished product. This was a very successful combination: General Foods was able to maintain the proprietary technology and utilize the ice-cream manufacturing facilities efficiently. Later, as the product increased in popularity and became established, the company installed its own manufacturing facilities, taking advantage of the learning experience, for which the copacker was paid handsomely.

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OTHER OPTIONS There are other options for manufacturing, which may solve specific problems.

Supplier’s Manufacturing Facilities Currently, many ingredient suppliers have small manufacturing plants in which regular production of certain products is feasible.

Foreign Subsidiaries or Joint-Venture Companies Foreign subsidiaries or joint-venture companies with which the corporation is associated can easily be tapped for product manufacturing, especially when the finished product expands into world markets, or is produced with a cost advantage due to beneficial local labor or raw and packaging materials costs.

Temporary Use of Outside Facilities Installation of the manufacturing line(s) in another facility is an option seldom looked at because of the inherent difficulty that it represents, but in some instances, this solution is viable. For example, a corporation might have several manufacturing facilities near each other and may have extra empty space available. The temporary move and installation of a manufacturing line can be accomplished when the machinery is simple to move and requires no special expertise to operate.

SUMMARY Copacking makes a lot of sense when: • • • • • •

The costs are adequate Technology is not compromised—confidentiality can be secured Getting or having the product is essential There is no available manufacturing capacity in-house The product’s success is unknown There is a lack of resources (for example, financial or personnel)

Thus the question, “Contract packing or in-house manufacturing?” is best resolved on a case-by-case basis, because decisions have to be made with available data as conditions vary. As companies, particularly those focussing on marketing, are outsourcing many services, manufacturing provided by third parties can be a very desirable option, which has the unique specific objective of converting a corporation into a true low-cost producer.

14 Initial and Progressive Cost Estimates Frank Kramer, Fremark Company

INTRODUCTION The product sales price and profit are greatly dependent on the capital investment and production costs. It is essential that estimates of these costs be made at every stage of development, starting almost at the concept stage in the laboratory. The direction of the project, the ingredients used, and the product definition may have to change, based on these estimates. There is a necessity to project a vision of the process and equipment required for the product under development at the start of the project. There are some relatively simple methods for preparing preliminary estimates of investment and production costs. To obtain these estimates, first envision the process and equipment needed to produce the product. The preliminary cost estimates must be followed by more detailed and accurate estimates as the product develops from concept to commercial product. From the more precise cost definitions, elements of the product formula, equipment, or utilities may offer opportunities for reducing cost and/or improving product acceptability. These topics will be discussed in more detail in this chapter. 179

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TYPES OF ESTIMATES FOR CAPITAL INVESTMENT There are various estimate-types for determining the capital investment for producing a product. They all depend on identifying the process and equipment involved: whether the process requires a complete new, green site, the availability of utilities, environmental considerations, and other local, state or federal regulations. Although estimating costs at the start of the project is essential, it is obvious that not enough is known to be able to obtain a very precise investment forecast. As the project moves through the development ladder, more and more details of the plant will be defined. The type of cost estimates and their accuracy is summarized in Table 14.1. The tabulated cost estimates are part of the functions that are conducted at each stage of the development ladder as seen in Table 14.2. The study forecast can be calculated after a preliminary process concept is put into a flowsheet form, with the major equipment identified. The study estimate is very useful at the benchtop stage in determining alternate processes; it may influence a go/no-go project decision. The budget and definition estimates are made during and after the pilot plant stage to be able to estimate costs for management approval, and the detailed estimate is basically the contractor’s bid number after receiving the detailed drawing and specifications.

OPERATING COSTS There are two types of operating costs: Direct or variable costs—These are costs that are a function of the rate of production, nearly proportional to production volume. As an example, if there is no production, no operating labor is needed. Operating labor is a direct cost. TABLE 14.1 Types of investment cost estimated. Type

What Estimates Are Based On

Accuracy Range

Study

Major equipment identification with tested factors

/-30%

Budget

Obtaining sufficient data for budget approval

/-20%

Definition

Almost complete process/equipment defined

/-10%

Detailed

All drawings and specifications complete

/-5%

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TABLE 14.2 Development ladder. Stage

Purpose and Accomplishment

1

Benchtop

Product and process concept developed; gathering database, pilot plant design and preliminary product evaluation

2

Pilot Plant

First scale-up; product consumer studies/adjustments; data for cost estimation; plant design and recommendation for approval

3

Commercial Plant

Product definition complete and fixed; operating department in charge. (at times Semiworks precedes for complex projects)

Fixed costs—These are expenses that occur whether the production is off, low, or high. An example would be depreciation charges for purchased equipment. Direct costs include: • • • • • • • •

Ingredients and packaging materials Operating labor Line supervisors Utilities (electric, gas, oil, and water) Maintenance Operating supplies QC laboratory Waste disposal

Fixed costs include: • • • • • • • • •

Depreciation Property taxes Plant superintendent Personnel, cafeteria, medical services Accounting and clerical expenses Sales and advertising costs Engineering and R&D Executive and headquarters overhead Equipment rentals

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Note that depreciation is usually based on a ten-year equipment life and buildings lasting thirty years. Therefore a $1 million building has a depreciation charge of $33,000 per year whereas equipment costing $1 million has a depreciation of $100,000 per year.

TOTAL OPERATING COSTS AND THEIR EFFECTS The total cost per unit is the sum of the variable and fixed costs. A simple equation shown here relates these costs with the production rate: VC—Variable cost, proportional to the production rate (in dollars per hour) FC—Fixed cost, as name implies, remains constant (in dollars per hour( PR—Hourly production rate (in units per hour) From these variables, the cost per unit CP is determined in $/Unit as CP 

(VC  FC ) PR

As the production rate (PR) increases, the unit cost (CP) decreases. Essentially, as the production rate rises, the fixed cost becomes less and less significant. This shows that the more the equipment is used (for example changing from one shift to two and three shifts) the more operating costs can be reduced. Additionally, this relationship illustrates the drawbacks of seasonal processing, where the equipment and facilities lie idle for long periods of time. It is important to have other products produced on seasonal-type lines to reduce the effect of fixed costs on CP. By planning a new products and processes strategy, the problem of idle equipment and high fixed costs may be avoided. The strategy would be to build a facility with lines that can produce a wide variety of products, that is, flexible lines not just dedicated to one type food. The typical flexible line would have one or two main pieces of equipment and the rest consisting of some that can remain idle, smaller ones that can be wheeled in or out, or simple add-on application tools. This would enable the line to have production flexibility with only minor, rapid changeovers for each product. Modern bakeries are examples of plants that have flexible lines. A simple bakery line has large mixers for the batter or dough and a baking oven as the main steps in the process. Dough makeup and proofers (warm, humidified chambers for dough rising), as well as various forms of topping machines, are among the equipment that changes as the various bakery products are scheduled. However, even in bakeries, there are limits to flexible manufacturing. As an example, doughnuts cannot be made on a bread line.

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IMPORTANCE OF EARLY-ON COST ESTIMATION Here are a few real-life examples of how cost estimates made at the benchtop stage helped guide new product development projects.

Layer Cake A product development group was working on a new type of three-layer cake. They decided that to prevent any layer having a crust, that they would make three, one-inch thick, round cakes, in covered pans. The study capital investment cost estimate and unit cost estimate showed that these costs would be prohibitively high. The development team had no bakery experience and apparently did not realize that it would require three significantly large ovens and a tremendous amount of pan-handling equipment and people. Once they were shown that a single oven with coverless baking pans could make a three-inch cake (to be later sliced into three layers), they reestimated the costs and the project was resumed, but without the concern about one layer having a crust.

Boston Baked Beans In an earlier chapter, new oven equipment to produce Boston baked beans was described. There was a need to replace antiquated equipment which required a great deal of labor and which had been a potential hazard for both personnel and product. Before project activity could be started, in this small company with a minimal technical staff, the project had to be justified by identifying a process concept, and from that, an estimate of required investment and possible product cost savings. Once these preliminary estimates were reviewed, the project was given a high priority. The corporate board approved the project after firmer figures were obtained, following completion of the pilot plant work.

REQUIREMENTS FOR INITIAL ESTIMATES In these examples, it was very important to have prepared flowsheets of the process at almost the beginning of the project. The flowsheet should reflect the best thinking of how the product should be produced with the key equipment and ingredient streams as clearly defined as possible. As the project moves along, more and more of the information related to production rates, equipment sizes, material flows, and utility needs can be identified and illustrated on the flowsheet. Additional requirements for initial cost estimating are these: • Product definition based on most acceptable concept • Marketing sales forecast now and in five years

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FIG. 14.1 Baked bean process flowsheet for study cost estimate.

• Desired sales price and, from it, the maximum acceptable manufacturing cost • Concept for commercial plant process and equipment • Identification of unique and/or very costly equipment essential to produce the product • Possible use of contract manufacturers for part or all of production • Ingredient physical and chemical properties and storage requirements • Literature and patent research

DETERMINING EQUIPMENT COSTS FOR STUDY ESTIMATES Costs of individual pieces of equipment can be estimated from available information with reference to appropriate price-index databases and use of the 0.6 exponential scale-up rule and other refinements of the 0.6 rule that have been empirically determined and tabulated in various publications like Peters and Timmerhaus (Plant Design and Economics for Chemical Engineers, 1991). The cost of equipment does not increase in direct proportion to its size or capacity. The cost increases as the 0.6 power of the size or capacity: If C1 is the known cost of equipment of Size 1, and C2 is the desired cost of the same equipment at Size 2; then: C2  C1 x (Size2/Size1)0.6

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As an example, assume that a 50-ft.(16.4 m) baking oven was purchased for $200,000 in 1994. What would a 100-ft. (32.8 m) oven cost in 2001? Using the 0.6 exponential equation, the 100-ft. (32.8 m) oven would cost $313,000 in 1994. Using the annual equipment cost index, published in the magazine Chemical Engineering’s March issues, the price increase would be 10.0 percent from 1994 to 2001. Therefore the 100-ft.(32.8 m) oven price in 2001 would be $344,000. Using this equation and also figures from an internet site, www.matche.com, table 14.3 was developed showing the total key equipment cost with/without installation. The total equipment cost, $429,000, can be used to estimate the cost of a complete new plant to produce Boston baked beans as defined by this flowsheet (Figure 14.1). The estimate would be in the study category of reliability, /-30 percent. It extrapolates the total equipment cost (TTC) by a Lang factor to take into account all the related installation elements: Piping, electrical, and instrumentation Land, building, and landscaping Engineering and construction supervision Contractor’s fees (5 percent of TTC) Contingency (10 percent of TTC) Working capital (15 percent of total investment) Lang’s factor for this type process is 4.9 (Peters and Timmerhaus, year). Therefore the total investment cost  4.9 x $429,000  $2,102K. TABLE 14.3 Estimated equipment costs. Equipment Required 1 2 3 4

Raw Bean Elevator Bean Feed Hopper Syrup Tank Baked Bean Oven

5

Water System

6 7

Screw Conveyor Canning Machines

Size 75 ft. 150 ft3. 200 gal. 100  12 ft. 20 gal./ min. 14 ft.

Capacity No 8.2 m 5.12 m3 52.8 m3 32.8  3.9 m 5.3 m3/ min. 4.6 m

Material

Cost/103

1 1 2 1

Steel SS SS SS

6

SS

$6

2

SS

$12 Rented $429 $167 $596

Total Equipment Cost Installation Cost TOTAL INSTALLED COST

$14 $5 $48 $344

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This study estimate, as already discussed, is very important and useful at the benchtop development stage. As the project moves through the pilot plant and beyond, the equipment and process variables become better defined and preliminary vendor pricing can gradually replace the extrapolation factors and other estimating tools, resulting in much more accurate estimating. The accuracy of these estimates becomes extremely important once management has approved the plant construction budget. Since budget estimates are accurate to /-20 percent, the budget submitted for management approval should contain a 20 percent contingency. Later, the project should be well enough defined to establish at least a definition cost estimate.

PRELIMINARY ESTIMATES OF DIRECT OPERATING COSTS From pilot plant data, very precise information should be available on formula, yield, process chemicals, and utilities, and with the input from the operations and engineering departments, the number, types, and wages for operating labor and line supervision can be specified. Shortcut methods can be used for some of these estimates, even at the benchtop stage, once a flowsheet is developed and a preliminary material and energy balance are calculated. Calculating the gas usage and hourly cost to operate the baked bean oven can be used as an example. Table 14.4 shows the material streams in/out of the oven. Note that the water added before and during baking goes two ways. Most is absorbed by the beans and 2,200 lbs. per hour replaces evaporated water that leaves through the vent. The question is, how much gas is required to supply the energy to evaporate that much water along with heating up the materials to the evaporation temperature? Determining gas usage and its cost is a good example on how many of the operating costs can be estimated even at the earliest development stage. The 2,200 lbs. of water per hour evaporated required 2,200,000 BTUs of energy based on steam formation at 1,000 BTU per pound of water evaporated. The energy for heating up the ingredients at 10,000 lbs. of product TABLE 14.4 Oven process material balance. Stream 1 2 3 4 5 6

Materials in/out Beans In Sauce In Water In Water In Vented Vapors Out Baked Beans Out

Lbs./hour 3,100 1,200 1,460 6,640 2,200 10,200

Notes Pea, Kidney, Yellow Eye Molasses, Sugar, Spices Before Baking During Baking Water Evaporated Product Produced/Hour

INITIAL AND PROGRESSIVE COST ESTIMATES

187

per hour is an additional 2,500,000 BTUs. One Therm of gas represents 100,000 BTUs and in May, 2001, cost on average $0.89 per Therm (RGEBusiness Solutions). Therefore the gas used was 47 Therms per hour, costing $41.83 per hour. Assume that the energy efficiency of the oven is 50 percent, leaks and radiation accounting for the energy loss. Then the total gas cost is $82.66 per hour. This is a cost of about $.01 per pound of product.

DETERMINING NEW PRODUCT VALUE The value of a new product has to take into account the economics as determined in the previous sections of this chapter. If favorable, such as having a less than five-year investment payoff based on best market research estimates, there are other factors that must also be considered. These include: • • • • • •

Consumer approval Product fit in company marketing image Compatibility with existing products and technologies. Competitive interests Financial environment, generally and within the company Any regulatory problems involving this product or its manufacturing process

CONTINUAL SEARCH FOR REDUCING PRODUCT COSTS Even after the product is in full commercial production, good managers are always seeking means to reduce product costs without affecting the quality or image of the product. Ideally, you would want the cost savings as well as product improvement and often that is what happens. The opportunities for reducing costs can be achieved in many ways. Automation is one of the most easily available, especially if the existing processes are labor intensive. Automation controlled by computers and state-of-the-art sensors can require a large investment. However, as with all capital costs, the larger the production volume put through the equipment, the greater the per-unit savings. If the five-year sales forecast shows a growing business with a large expected volume requirement, the time to pay off the equipment investment may be low enough to justify proceeding. The use of automation often results in improved and consistent quality. Not only can the product be made precisely the same way each time but with the controls and sensors, the equipment lends itself to a planned product improvement program by online variable adjustments. In the food industry, 30 to 60 percent of the variable costs are for ingredients, so removing or replacing an expensive ingredient is one of the first

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things to look for when considering reducing costs. For the same reason, obtaining maximum yield (or eliminating losses) is very important. Especially now, energy can be very expensive. Therefore, any energy reduction will significantly cut costs. In recent years, the gelatin industry has substituted ultra-filtration membrane concentration for steam evaporators for this purpose. Also some companies have installed cogeneration plants, producing electric power from high-pressure steam generators and using the low-pressure steam from the generators for processing.

SUMMARY The importance and methods for new product and process cost estimates were described. These included estimating both capital investment for equipment and facilities as well as for product operating costs. The necessary information to obtain these estimates was listed along with shortcut methods to make preliminary estimates for development guidance and budget purposes. Emphasis was put on establishing early-on concepts of the process and key equipment required for the new product as a means to prepare cost estimates, but also to ensure good and consistent quality. References for further, more detailed, study of this subject are given.

BIBLIOGRAPHY American Institute of Chemical Engineers; Education and Training Course #140; www.aiche.com Chemical Engineering. March 2001. (March issues every year) Conveyor Type Oven. U.S. Patent 3,807,293; Kramer and others. Matche. www.matche.com Peters, Max S., and Klaus D. Timmerhaus. Plant Design and Economics for Chemical Engineers. New York: McGraw-Hill, 1991. RGE (Rochester Gas & Electric). www.rge.com

Index

Assessment, strategic, 4 ASTM International, 89 Audience communication and, 9–10 target, 139 Automation, 187

Acceptance testing, 82 Acids, organic, 121–122 Additives, 76 Aftertaste, 76 Allergens, 107 American Statistical Association, 89 Anaerobic conditions, and food packaging, 61 Analytical tests, of shelf life, 70 Annatto, 100 Anticipation, of clients needs, 9 Antimicrobials, cost of, 120 Appearance, of food products, 60 Appliances, testing, 136–137 Ascorbic acid, 63 Aspartame, 32, 126

Bacillus globigii, 119 Bacillus stearothermophilus, 119 Bacteria in food products, 60–61 growth cycle of, 61 Bags, materials for, 165 Baked Bean Oven, 23–29, 148, 186–187 Baked goods, packaging, 157 189

190

Ball, C. Olin, 114 Baselines, product/process, 118, 120 Beef, packaging of, 153 Beef noodle soup-dry mix, 129–130 Beer, packaging of, 158 Benchmarking, 88 Benchtop, product development, 22 Benco, 116 Benefits, of a project, 6 Best, Dan, 131 Beverage mixes, packaging, 156 Beverages carbonated, 158 flavor-boosted, 86–87 packaging, 158 still, 158 Biaxially oriented heat-set oriented polypropylene film (BOPP), 162 Biofilms, 108 Blow molding conventional, 166 extrusion, 162, 163, 167 injection stretch, 167 BOPP, 162 Bosch, 116 Boston Baked Beans, 183 oven, 23–29, 148, 186–187 Bottles glass, 158, 161 polyester, 154, 158 Botulism, 121 Bovine Spongiform Encephalopathy, 83 Brands, flagship, 44 Bread, loaf volume, 63 Brief, project, 4–6 Browning, 62, 64 Maillard, 62–63 BSE, 83 Buildings, depreciation of, 182 Buildings, depreciation of, 182 Business paradigm, continuity of, 40–41 Butter, packaging, 157 Campfire Marshmallows, 133 Candy, packaging, 158

INDEX

Canned foods, packaging, 155–156 Canning, 114 Cans aluminum, 158, 160 coatings for, 160–161 metal, 155, 160–161 paperboard, 159–160 plastic, 156 steel, 160 Canvassing, telephone, 85 Capital expenditure, 6 Capital investment, estimates for, 180 Carotene, 63 Cartons liners for, 159 paperboard, 159 polyethylene-coated, 154 Cases, distribution, 160 CCPs, 112–113 Celeste Pizza, 138–139 Cereal products, 127 packaging, 141, 157 Chain of command, 39 Challenge studies, 114–123 Characteristics identifiable, 79–80 sensory, 80–81 Cheerios, 127 Cheeses, packaging, 155 Chemical reactions, in food products, 69 Chicken, precooked, 128 Children, as consumers, 86 Chocolate, packaging, 158 Cigarettes, 139 Clostridia, 155 Clostridium botulinum, 61, 114, 116, 119 Clostridium sporangenes, 114 Coatings for cans, 160–161 plastic, 159 polyethylene extrusion, 159 Coca-Cola, 147 Coding systems, 108 Coextrusion, 164 Coffee decaffeination, 148

INDEX

Coffee Pouch Packer, 148 Cogeneration plants, 188 Color, changes in, 64 Colorimeter, 64 Colors, natural, 100 Combibloc, 116 Command, chain of, 39 Commercial plant, 22–23 Communication audience, 9–10 effect of culture on, 7 executive, 3–8 message, 8–9 verbal, 9 vignettes, 126–128 visual, 9 Companies functions of, 171–172 joint-venture, 177 Competence, 32 Competition internal, 14 product, 16 and project termination, 12 Competitors, 17 Compression, 80 Concepts, origin of, 36–37 Concept testing basic research, 76–77 cost control, 91–94 market profiling, 77 Confidentiality agreements, 148–149 maintaining, 147 Consumables, 6 Consumer education, 128 Consumer market, and product life cycle, 51–58 Consumers analyzing, 15 identifying, 111–112 Consumer testing and home use, 137 local, 135–136 vignettes, 134–141 Containers, semi-rigid, 165 Continuous oven, design of, 26 COOL WHIP®, 176

191

Copackaging, 173–177 Corn syrup, 61 Corporate culture, 39–40 Corporations, goals and objectives of, 13–15 Cost control, 7, 91–94 Cost-reduction programs, 76, 187–188 difference testing and, 81–82 Costs, 16 direct (variable), 180–181, 182 distribution, 16 estimating, 179, 183 external, 6 fixed, 181, 182 manufacturing, 16, 184 operating, 180–182 optimum, 17 project, 6 reducing, 76, 187–188 shelving, 17 Crab products, 127–128 Critical control points (CCPs), 112–113 Critical Path, 23, 27 Crocin, 100 Cross-contamination, due to repackaging, 128 Cross-functional teams, 43, 46–47 Crystallization, of food, 64 Cullet, 161 Culture, effect on communication, 7 Cultures, starter, 121 Customer service, 129 Dairy products, packaging, 154–155 DATEM, 130 Decaffeination, coffee, 148 Decision tree, 14 Departments head of, 41–43 organization by discipline, 41–43 structural criteria, 39–41 Depreciation, 16, 181, 182 Descriptive analysis, 80–81 Descriptive scale, 79–80 Dessert mix, dry, 137 Desserts, gelatin, 53

192

Development cycle, 5, 8 ladder, 180 team, 15–17 Dextrose equivalents, 61 Difference testing, 81–82 Direct costs, 180–181, 182 Dissection, physical, 78 Distortion temperatures, of plastics, 167 Distribution, 17 costs, 16 shelf life testing and, 68–69 Documentation, specialized, 10 Dole Fresh Vegetables, 105 Draft, Richard, L., 39 Dropout purchasers, 84–85 Dry foods, packaging, 156 Drying, 113 Duo-trio tests, 81 Duplicity, preventing, 21 Efficiency and organizational structure, 33–35 of SBUs, 44 Eggs, pasteurized, 131 Electronic noses, 89–90 Electronic tongues, 90 End point, shelf life, 60 End results, challenge studies, 118 Energy, cost of, 188 Engineering, and product development, 38 Enzymes inactivated, 62 proteolytic, 61–62 Equal, 126 Equipment cleaning, 131 cost of, 184–186 depreciation of, 181, 182 selection of, 143–145 specially made, 144 unique, 184 Escherichia coli 0157:H7, 121 Ethylene vinyl alcohol (EVOH), 164 EVOH, 164 Executives

INDEX

needs of, 3–7 wants of, 7–8 Expenditures, tracking, 11 Extrusion lamination, 165 Extrusion methods blown film, 162, 163, 167 slot-die, 163 Fats oxidation of, 156–157 packaging, 156–157 safety of, 107 specialty, 130–131 Feasibility, technical, 4 Fermentation, 113 Films, coextruded, 164 First-order reactions, 69 Fish, packaging, 153 Fixed costs, 181, 182 Flagship brands, 44 Flavor changes in, 60, 61, 62 masking, 76 toasted/burnt, 63 Flavoring compounds, 156 Flexible packaging, 165 Flexography, 165 Flowsheet process, 143–144 project, 183 Focus groups product testing, 83–84 respondents, 134 teleconferencing, 93–94 website for, 94 Folic acid, 63 Food law, 120 Food preservation by heat, 114–116 challenge studies, 116–123 hermetically sealed packages, 116 history of, 113–114 non-thermal systems, 122 Food products appearance of, 60 canned, 155–156 chemical reactions in, 69 deterioration vectors, 152

INDEX

dry, 156 flavor-boosted, 86–87 fresh, 152–154 frozen, 156 hygroscopic, 66 microbial growth in, 60–61 odors, 60 packaging. See Packaging presentation, 151 processed, fully, 155–158 minimally, 152, 154–155 special dietary, 132 storage, 61 wholesomeness of, 103–104 Food safety, 105–108 HACCP systems, 104–105, 108–113, 122–123 Food Technology, 107 Foreign markets, 87–88 Formulas, secret, 147 Free fatty acid value, 62 Freezer burn, 153 Freeze-thaw cycle, 64 Frozen foods, packaging, 156 Fruit, fresh, packaging, 153 Gantt charts, 21, 22, 23, 27–29 Gelatin dessert, 53 Gelatin extractor, continuous, 147 General Foods Corporation, 51, 135, 176 General Mills, Inc., 43 Glass, packaging, 161 Glassines, 159 Globalization, effect on organizations, 7 Gluten, 63 Glycerin, 61 GMPs, 108 Good manufacturing practices (GMPs), 108 Groups, performance of, 31–32 Growth rate, product, 17 Gums, 61, 76 HACCP systems, 104–105, 122–123 plan development, 112–113 prerequisites, 108–110

193

team duties, 110–113 Hazard Analysis Critical Control Points (HACCP) systems. See HACCP systems HDPE, 162 Headache powders, 138 Heat resistance, of microorganisms, 114–115 Hedonic scales, 82 Herbs, in food products, 76 High-density polyethylene (HDPE), 162 High hydrostatic pressure (HHP), 122 Home use, and consumer testing, 137 Huber, Louis, 127 Hula-hoop type, product life cycle, 56 Human resources, organization of, 31–49 by discipline, 41–43 by SBUs, 43–45 hybrid structures, 45–46 matrix structures, 46–47 product development, 47–48 Humectants, 61 Humidity relative, 64–66 shelf life and, 67, 72 Hurdles, 104, 113–114, 120 Hybrid structures, of corporate organization, 45–46 Hydrogen peroxide, for sterilization, 119 Identification systems, 108 IFT, 36–37 Illness, foodborne, 116–117 Individually quick frozen (IQF) products, 156 Individuals, performance of, 48–49 Inefficiency, causes of, 21 Information initial, 4–6 ongoing, 6–7 specialized, 10 Informed consent, 126 Ingredients cost of, 187–188 substitution of, 76

194

Injection molding, 165–166 Inside knowledge, 6 Institute of Food Technologists, 36–37 Integration, cross-disciplinary, 41 International Organization for Standardization (ISO), 89 Interviews, on-site, 77 Inventions, patenting, 145 Investment, 17 Irradiation, of food, 107 ISO, 89 Iteration, reducing, 21–22 Jargon, technical, 8 Jars, glass, 155, 161 JELL-O Pudding Pops™, 54, 176 JELL-O™, 53 Joint-venture companies, 177 Juices, packaging, 158 Keener, Larry, 104–105 Kitchens of Sara Lee, 37, 45, 136 Kraft, 54, 133, 173, 174 Kraft paper, 159 Lactic acid, 122 Lamination, extrusion, 165 Lang’s factor, 185 Launch date, 6 Laws, food, 120 LDPE, 162 L’Eggs, 140 Life cycle charting, 55–58 definition of, 52–54 influences on, 55 product, 51–58 Lifestyles, product and, 17 Light effect on nutrient loss, 63 and lipid oxidation, 62 shelf life and, 67, 72 Linear low-density polyethylene (LLDPE), 162 Line ‘Ems, 140–142 Line extensions, 52 Line scales, 79–80, 82 Lipid oxidation, 62

INDEX

Lipolysis, 62 LLDPE, 162 Loaf volume, 63 Logistics, 171 Low-density polyethylene (LDPE), 162 Lunchables™, 54 Lutein, 100 Maillard browning, 62–63 Maintenance programs, 108 Manufacturing, 15–16, 171 costs, 16, 184 flexible, 182 in-house, 172, 177 short-term needs, 173–174 third-party, 173–177 Margarine, packaging, 157 Marketing, 17, 171 costs, 16 research, for new products, 139 rollout, 53–54 sales forecast, 183 Markets children, 86 foreign, 87–88 segmentation of, 86, 88 senior, 86–87 size of, 17 Marshmallows, 133 Masking compounds, 76 Materials, raw, 16 Matrix structures, 46–47 Mature period, product life cycle, 56 Meat contaminated, 121 cured, 154 irradiation of, 107 preservation/packaging of, 153 Medium, recovery, 115 Meeting rooms, for focus groups, 84 Memorandum of Invention (MOI), 146–147 Message, of communication, 8–9 Metal ions, and lipid oxidation, 62 MicrosoftProject, 23, 27–29 Milestones, 6 Moderator, of focus groups, 84

INDEX

MOI, 146–147 Moisture changes in, 64–66 effect on enzyme activity, 62 and lipid oxidation, 62 Moisture sorption isotherm, 65–66 Molding blow, 166 injection, 165–166 Molds, in food products, 60–61 Nabisco, 54 Names, of products, 136 National Food Processors Association, 116 Neutraceuticals, 76 New products development of, 174 value of, 187 Nitrites, for curing, 154 Nitrogen, for packaging, 155 Numerical scale, 79–80 Nutrient declarations, 78 Nutrients, loss of, 63 Nylon, 163–164 Odors, in food products, 60 Odwalla outbreak, 123 Oil products packaging, 156–157 safety of, 107 Older people, as consumers, 86 Operating costs, 180–182 direct, 186–187 total, 182 Organization, virtual, 34 Organizational Theory & Design, 39 Organizations effect of globalization on, 7 functions of, 33–35 goals and objectives, 13–15 structural criteria, 39–41 Oscar Mayer, 54 Outbreaks, foodborne illness, 116–117 Oven, Boston Baked Bean, 23–29, 148, 186–187 Overruns, cost/time, 12

195

Oxidation, 152 canned foods, 155 lipid, 62 Oxygen, and food storage, 61 Oxymyoglobin, 153 Packaging, 15–16 changing, 140 control of, 129–130 dual use, 156 easy-open, 87 external influences, 167 failure of, 138–139 flexible, 165 function of, 151, 167–168 glass, 161 hermetically sealed foods, 116 materials, 16, 158–168 new, 52 oxygen-impermeable, 61 oxygen-permeable, 153 plastic, 161–165 and product development, 38, 140 secondary, 153 semi-rigid, 165–167 shelf life and, 67 short-term needs, 173–174 tests, 89 vacuum-packed, 62 Packaging requirements. See also under individual food. fresh food, 152–154 fully processed foods, 155–158 minimally processed foods, 152, 154–155 Paint chips, 64 Palatability, product, 88–89 Paper greaseproof, 159 packaging, 159 recycled, 159 Paperboard, 159–160 Paprika, 100 Pasteurized Eggs Corp., 131 Patents, 145–148 as assets, 148 defensive, 146 in recognition systems, 42

196

Pathogens, foodborne, 60 Performance of groups, 31–32 of individuals, 48–49 Period assessments, 11 Personnel, 171 Perspective, and organizational structure, 32–33 PERT charts, 21, 22, 23, 27–29 PET, 163 Pet food, 88 pH and enzyme activity, 62 and microbial growth, 60 and nutrient loss, 63 and lipid oxidation, 62 Pickling, 113 Pillsbury, 39 Pilot plant, and product development, 22 Pizza, frozen, 138–139 Placement, of products, 55 Plants cogeneration, 188 commercial, 22–23 construction budget, 186 pilot, 22 semi-works scale, 23 tours of, 148 visitors and confidentiality, 148, 149 Plastic distortion temperatures of, 167 packaging, 161–165 thermoformable sheets, 166 Polling, telephone, 77 Polyester (PET), 163 Polyethylene, 162 film, 154, 163 Polyolefin film, 153, 154 Polypropylene (PP), 162–163 Polystyrene, 164 foamed, 166 thermoforming of, 166 trays, 153 Polyvinyl chloride (PVC), 163 film, 153 Polyvinylidene chloride (PVDC), 164

INDEX

Pop-Rocks™, 53–54 Pork, packaging of, 153 Postlaunch tracking, product testing, 84–85 Potato chips, Yugoslavian, 135–136 Pouches, 165 flexible, 154 metalized, 157 moisture resistant, 156 Poultry, packaging, 153 PP, 162–163 Preference testing, 82–83 Pricing, 16 Pringles™, 40 Printing, rotogravure, 165 “Prior Art,” 145 Process changes in, 133 development, baselines, 118 flowsheet, 112, 143–144 patenting, 147–148 Processed foods, fully, 152, 154–155 minimally, 155–156 Processing parameters, challenge studies, 118–119 seasonal, 182 Procter & Gamble, 40 Produce, packaging, 153 Producers, low-cost, 172–173 Product development funnel, 105 ladder, 22–29 team, 15–17, 31–49 Product development process baselines, 118 external evaluation, 18 functions of, 36–38 goals and objectives of, 13–15 managing, 21–29 marketing, 17 organizing, 47–48 principle of, 13 requirements, 18–19 stakeholders, 33, 38–39 steps of, 174 Production in-house, 174

INDEX

lines, flexible, 182 low-cost, 172–173 rate, 182 Product manager, 43 Products attributes of, 54–55 comparing, 80–81 concept, 14 definition of, 15, 18 description of, 4, 111 developers, 127 development cycle, 8 existing, 52 fermented, 113 international, 135–136 life cycle of, 51–58 naming, 136 new, 52, 128 accelerating, 132–133 development, 174 value of, 187 quality and shelf life, 59 sample, 22 Product testing applied sensory neuroscience, 90 basic research, 76–77 chemical/physical analysis, 78 cost control, 91–94 electronic, 89–90 focus groups, 83–84 market profiling, 77 market-specific, 85–89 matrix analysis, 91 postlaunch tracking, 84–85 real-time, 91 sensory, 78–83 Profiling, 80–81 Profit, 179 Program manager, 43 Progress reports, 8 Projects assessing progress of, 11 briefs for, 4–6 and external developments, 11–12 high-risk, 23 initial evaluation, 4–6 managers, 43 monitoring, 11–12

197

presentation format, 4 terminating, 10, 12 time frame, 5–6 Proprietorship, sole, 33, 35 Protein, loss of, 63 Protocol vignettes, 129–133 Prototype, 14 Pudding Pops, 176 Pulsed electric field (PEF), 122 Pulsed light, 122 Purchasers dropout, 84–85 repeat, 84 Purchasing and food safety, 110–111 and product development, 38 PVC, 163 film, 153 PVDC, 164 Pyridoxine, 63 Q10, 70–71 Quaker Oats, 138 Quality, automation and, 187 Quality assurance, and product development, 38 Quality control, and electronic noses, 90 Questionnaires, designing, 134–135 Questions, open-ended, 134–135 Rancidity, 156–157 Ranking, 79 Rating, 79–80 Raw materials, substitutions, 81–82 Reality, and food safety studies, 120–122 Real-time testing, 91 Recall programs, 108 Recognition systems, corporate, 42 Recommended Daily Intake (RDI), shelf life and, 63 Recovery medium, 115 Renal caloric supplement, 132 Repackaging, 128 Repeat purchasers, 84–85 Reports, length of, 8–9 Resin, polystyrene, 166

198

Resin process, coffee decaffeination, 148 Retinol, 63 Retorting, 166 Reynolds, RJ, 139 Rice, black, 132–133 Risk management, 174 Roles, definitions of, 32 Roller coating, 161 Rollout schedule, 17 Rotogravure printing, 165 Royalty fee, 146 Saffron, 96 Safrante-Amber™, 97 Safrante™, 95 development of, 96 marketing, 97–100 and saffron market, 100–102 uses, 97 Sales costs, 16 expectations, 17 force, 17 forecast, 183 Sales point, peak, 56 Sales price desired, 184 product, 179 Salmonella, 153 Salmonella argona, 107 Salt, 61, 113 for curing, 154 Sample, product, 22 Sanitation standard operating procedures (SSOPs), 108 Sara Lee, Kitchens of, 37, 45, 136 Saran wrap, 164 SBUs, 43–45 Scales descriptive, 79–80 line, 79, 82 numerical, 79–80 Screening document, 4–5 Searle, G.D. & Co., 126, 132 Searle, G.D. Biochemics, 32 Seasonings, 156 Second-order reactions, 69

INDEX

Semi-works scale plant, 23 Seniors, as consumers, 86–87 Sensographic segmentation, 88 SensoMetrics, 88 Sensory acuity, loss of, 86 Sensory Neuroscience Laboratory, 90 Sensory testing food products, 78–83 shelf life, 68, 70 Sheer Energy, 140 Shelf life and chemical changes, 61–63 definition of, 59, 72 end point, 60, 68 estimating, 68 and microbial growth, 60–61 and physical changes, 63–66 and Recommended Daily Intake (RDI), 63 testing, 66–70 accelerated, 70–72 Shortcuts, 6 Shortenings, packaging, 157 Shrink film, 160 Size, effect on organizational structure, 40–41 Slot-die extrusion methods, 163 Snack cakes, 130 Snacks, packaging, 157–158 Soft drinks, packaging, 158 Sole proprietorship, 33, 35 Solids, increasing, 61 Soup mixes, packaging, 156 Spectrophotometer, 64 Spray coating, 161 SSOPs, 108 Stakeholders, product development, 33, 38–39 Starches, 61, 64 Steam chest expansion, 166 Store allocations, 17 Store sales data, 77 Strategic assessment, 4 Strategic Business Units (SBUs), organizing by, 43–45 Study forecast, 180 Subsidiaries, foreign, 177 Success, rates of, 51

INDEX

Sucrose, 61 Suppliers outside, 11 use of, 177 SureBeam process, 107 Surimi, 127–128 Sweeteners, intense, 76 Target organisms, 114, 119–120 Taste, 76 Taxes, 16 TDT cans/tubes, 115 Technology sharing, 174, 175 untried, 4 Teflon, 140–142 Teleconferencing, for focus groups, 93–94 Telephone, polling/canvassing, 77, 85 Temperature ambient, 67 distribution, 67 and enzyme activity, 62 and lipid oxidation, 62 and microbial growth, 60 and nutrient loss, 63 shelf life and, 67, 70–72 storage, 60, 67 Tentering, 162 Testing organizations, 81 reliability of results, 17 Test launch, 175 Tetra Pak, 116 Texture, changes in, 60, 61, 63–66 Thermoforming, 166 Thermoresistometer, 115–116 Thiamine, 63 Three-arm flask, 115 3M, 40

199

Time frame cultural differences in, 8 project, 5–6 Toaster products, 136–137 Tocopherol, 63 Total equipment cost (TTC), 185 Toxins, 60 Tracking programs, 108 Trade secrets, 145, 146, 147–148 TTC, 185 Turmeric, 100 Ultraviolet light, 122 Unfeasibility, technical, 12 Universal Oven Company, 24 Use, intended, 111–112 Vegetables, packaging, 153 Vendors, confidentiality and, 147, 148–149 pricing, 186 Veneman, Ann M., 107 Virtual organization, 34 Vitamins, adding, 63 Volume, marketing and, 17 Water activity definition of, 64 in food products, 152 measuring, 64–65 and microbial growth, 60–61 and nutrient loss, 63 Website, for focus groups, 94 Yeasts, in food products, 60–61 0.6 exponential scale-up rule, 184–185 Zero-order reactions, 69