Food Innovation: An outlook from a large multinational company.

I really enjoyed listening to the "Inside the Strategy Room" podcast from McKinsey Strategy & Corporate Finance with Nigel Hughes from Kellogg Company. There were three main points from the podcast that are worth talking about.

Firstly, how do companies get around the eternal dispute between commercial teams and R&D teams? Food Innovation relies on the two teams working together. Nigel suggests that the concentration has to be on the customer rather than the product or the sales from it. This is what I call the cognitive divide where the R&D Function and the Sales & Marketing functions actually delay the progress of NPD projects because they don't understand the motivations of the opposite team. I always recommend clients use #designthinking as a tool to manage this. It forces everyone to only consider the client and how the product or solution works for them. It forces the human to be the center point and helps to keep the ego and the discussion about which is the more important business function out of the equation.

Secondly, small food companies have a big advantage over the Kellogg's or Unilever's out there. These larger corporations has very little flexibility and are driven by process and efficiency. The smaller company has the ability to adapt and test products quickly and get feedback. They are closer to their customer base. When I had Life Kitchen, I was in store on a weekly basis talking to staff and customers and hearing about how our healthy desserts helped them or how they could be improved on. When I did tasting events I listened to the stories of customers and particularly the elderly about how they felt isolated and how it was affecting their food intake. This was the beginning of The Dinner Club.

Smaller companies also have a personal story to tell about why they are doing what they are doing. This is something the #sme needs to tell to the customer and is nearly more important to tell than the food innovation that is before them. This can be accomplished on the packaging, through their social media and in any PR communication. This is something that the larger companies cannot do! There was a massive growth in the niches product market in 2007 due to the recession and people wanting to support local. This was made stronger by the millennials and their drive to support local or anything different thats screams quality.

What was interesting is that Kellogg's are working with these smaller companies now and fostering their development. This has been seen in Pharma, Medtech, Engineering for a good few years and this #systematicinnovation is at the top level of a companies innovation capability and generally can only be employed in the largest of food corporations. The traditional idea of "eat or be eaten" has made way for collaboration. This can be an excellent business model for a small food company where the large corporation can fund and work with the sme to develop their idea further. These resources are generally scarce in the small company.

Finally, two of the key trends of the future in food innovation are Mycoproteins and Personalisation. Fungi offer a really good source of high quality proteins and with the growth in plant-based protein off something really different. Love them or hate them Fungi can help solve a number of environmental and health issues. Find out more about that here. The main advantages are that fungal protein is high quality with a wider array of amino acids than other plant sources. It can be produced in factories and does not require land for its growth. In a previous article here I discussed the results of a survey I conducted on why people eat plant based meals. 22% of respondents did so for ethical or environmental reasons. With large amounts of rainforest being knocked yearly to grow Soy you would have to question the environmental impact of Soy as a food source!

Personalisation is one of the key food innovation trends today. It can be managed fairly easily at a small scale where products can be made to suit a specific customer. It is used in the fitness industry where meals are prepared to meet the nutritional needs of sports people with specific "macros" and also in the health care sector providing meals for particular nutritional purposes for patients. With the development of online platforms and companies offering bespoke supplementation programmes, where people monitor their health and food status, it is theoretically feasible. The issue for larger corporations that are built around efficiency and process is how do they manage the large scale production of individual products. The technology to do this is not there yet either. Maybe this is where collaboration comes in again?

The Podcast make me think a lot about food innovation and where it is going in the near future. Do you see yourself allowing your personal health status being used to design products specifically for you? As an #sme can you see yourself collaborating with the larger corporation to bring your technology to the larger market?