Blog: Why the right innovation is still paying off
Dean Best | 30 March 2009
In bad times as in good, innovation remains key. Right now, cost control is a priority for businesses of all sizes and the temptation to take the foot off the innovation pedal is strong.
However, the recession means that food companies need to keep focused on providing new products to meet consumers' changing priorities. Innovation can prove an expensive gamble but, as was highlighted in the US last week, when companies get it right, rewards are high.
New products from ConAgra Foods, General Mills and PepsiCo were said to be among the big NPD winners in the US in 2008 and, while consumers were still quick to snaffle up healthy products, the downturn meant home dining proved a fruitful area for the innovative.
Of course, for some in the industry, regulation can prove the enemy of innovation. And in the UK last week, there emerged two pieces of news that could muddy the waters for food manufacturers looking to innovate - and market those new products.
The UK's advertising policeman rebuked dairy group Muller for misleading consumers with an advert that claimed its Little Stars yoghurts were made with "100% natural ingredients". The ruling has thrown into question whether food manufacturers will be able to use such terms in the future as they look to tap into a trend that, although less critical to consumers amid the downturn, nonetheless remains a key driver of consumer purchases.
Elsewhere, the UK's food makers vented their anger at the regulators after the country's food safety watchdog decided to retain a protein cap used in guidelines that determine which foods can be advertised during children's TV programmes. The Food Standards Agency were accused of ignoring scientific evidence and expert advice to remove the cap, which had been brought in as a "safeguard" to prevent products high in fat, salt and sugar being deemed healthy due to their protein content.
Some industry watchers have argued that the decision to keep the cap could prevent innovation in the form of reformulation; with the cap still in place, they argue, the incentive to reformulate is absent.
Whatever your view, there is little doubt that the FSA's decision has soured relations with some in our sector.
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