Nomad Foods, the European frozen-foods group, is looking for “breakthrough innovation” – and wants to work with start-ups in its quest.
The UK-headquartered business behind brands including Birds Eye and Iglo is launching an initiative called Future Foods Lab to work with entrepreneurs and – all being well – roll out new products across Europe.
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Yorgos Tetradis Mairis is the head of R&D futures at Nomad Foods. He joined the Findus owner five years ago from Unilever to help the company look “more mid to long term” and identify the product opportunities of the future.
Nomad Foods already works with start-ups but the business wanted to develop a more formal programme to bring together its efforts. Future Foods Lab has been set up to address what the company calls its “key business challenges” and the unit’s first area of focus is “functional nutrition”.
Dean Best (DB): What are the primary objectives of Future Foods Lab?
Yorgos Tetradis Mairis (YTM): For us, it’s really to identify breakthrough innovation ideas. It’s paramount they very much have a strategic fit in the areas that we know are the emerging areas. It’s really about fostering innovation as well. There is a cultural element, working in partnerships with third parties and start-ups. They have a completely different way of working. It’s really bringing these breakthrough ideas to commercial viability and be a win-win for both sides.
DB: What do you mean by ‘breakthrough innovation’? Is it about coming up with a product concept that could radically change some of the products in your portfolio? Is it about helping to look at how you procure ingredients? Is it about technology that can help make your supply chain and manufacturing more efficient?
YTM: When we’re looking for breakthrough innovation now, we’re looking for functional nutrition. We’re looking for different formats. Of course, we have hygiene factors: we still need to have clean label; they still have to be sustainable sources. We can help them get there as well. For us, it’s like Christmas time when you have boxes and you don’t know what it is inside. Our ambition is to put two challenges next year. [We will] always be looking on a certain area because that creates clarity to us and the start-up. For now, we’re looking at functional nutrition, an emerging space for us.
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By GlobalDataDB: Why did you choose that first?
YTM: Because we felt this is an area where we’re still learning. As a team in RDQ, we cannot say that we are the owners. If you take fish, we have massive expertise and knowledge. In this space, it’s evolving, so many emerging things are happening. We’re looking at claims as well: very high protein, gut health. We feel this is where the creativity of start-ups can really boost us.
DB: What outcomes would you like to achieve from this functional nutrition work with start-ups?
YTM: I mean, this is the also related to the success of the programme. It’s really about first identifying products that actually fit within frozen, products that actually fit within the nutritional needs that we see in the space and with all the hygiene factors that we have to have.
The second thing is really about working in partnership with a start-up. It’s a key thing for us. We can give them a lot like they will give to us. We can give them financial stability. We can give them commercial scale and we can give them test and learn, which is a very fundamental part of really learning about a product. For us, success would be really to take these innovative product ideas all the way to a pan-European market together.
We’re not looking for a company that is really at the beginning of the journey
DB: Is that the ultimate goal? To launch a product? Do the start-ups already have to have a product, or already selling in the market? Or are you willing to work with companies at an earlier stage in their development?
YTM: The way that the venture client agreement works – and we’re trying to stay on that line – is we are not looking for ideas. We’re not looking for a company that is really at the beginning of the journey. For us, the important thing is to have some proof of principle. It might be not completely launched in a market but they might have a very solid type of thinking around the product, from the point of view of product development cost, manufacturing. It doesn’t need to be perfect because this is where we come in to support but we would like something that is much more ready, rather than really just an idea on paper.
DB: Would this functional nutrition element of the programme, the first challenge, have failed if you aren’t able to get a product to market?
YTM: It’s a very interesting question. The programme is about really enhancing this part of innovation for us. We don’t want to force something that might not work for both of us. It might be that we find one but we need to work a little bit more, rather than accelerating as we wanted to do. It might be that we learn a lot but we need to be honest between ourselves and the third party.
DB: How long does this challenge last? How long will you be working with the start-up? How many can you work with at once?
YTM: We will open it up and then, by the end of September, we’re going to close. Hopefully we’re going to have enough. Then we’re going to have a multi-functional review of which ones we’re going to put in front of our senior stakeholders within November.
DB: How many start-ups do you think you will select to work with at once?
YTM: We don’t have an exact number but we need to be true to the programme because it needs to be fast-track, it needs to have commercial scale, it needs to test and validate. As long as we have the capacity, if we see that there are three ready ones, great. It might be that we need to choose less. It’s definitely not going to be a large number.
DB: Where will these start-ups be based?
YTM: Anything within Europe is preferable. Anything outside Europe is possible but, of course, a relationship thrives on lot of face-to-face interactions. We don’t want to be transactional in this relationship.
The message is very clear: our programme is not to invest in or acquire your company
DB: Nomad Foods said the arrangements will be “paying customer” relationships. What does that mean?
YTM: The message is very clear: our programme is not to invest in or acquire your company. What we would like to build is a very healthy paying customer relationship with some exclusivity. They will invest resources. We’re going to invest resources.
DB: How can Future Foods Lab help improve Nomad Foods’ innovation strategy?
YTM: We discussed why from the product innovation point of view because these start-ups are so passionate about it. They really bring breakthrough ideas. That’s a benefit but, for us, another important point is the cultural element that we can gain from this relationship. We have a certain way to innovate, like any company and just working with these entrepreneurs, you learn a lot. It definitely will challenge a lot of ways of working, of how we do things, how we can accelerate, how we can really make those first steps of product development as well in a much more efficient way.
DB: How do you ensure the programme does not just focus on what Nomad Foods wants to get out of it but also helps the start-ups?
YTM: Fair question and it’s true. The first tension of start-ups is that they can feel overwhelmed by a bigger company. This is where we want to be very true to them to make sure that we are creating that path for them to grow, that we are the best partners to work with in order to make their business financially and commercially scalable and really understand the product much better.
We thought a lot about the details of how to enhance that relationship. It’s really about making them understand that we are not there for a tactical [reason]. We are there for a partnership.
The main point for us is make them comfortable, understand that we’re here for a win-win situation. We are not here as a threat from any kind of view. It’s your product. It’s your IP. We’re going to have the right NDAs in place, the right venture-client agreement. One thing is trust. The other thing is you need to have the right papers signed to guarantee that they are protected.
DB: And the start-ups don’t have to be consumer-facing. They can provide ingredients or technology, say?
YTM: Not in this call, not in this function nutritional [strand]. What we’re looking for is more end-product. This first challenge is not about identifying a new battering process. It might be that we say ‘Excellent, let’s collaborate in another project’ and we can put them in contact. We have an open innovation portal as well. That’s a little bit more longer term, I have to say. Future Foods Lab is really a fast-track programme for both companies.
DB: What will follow functional nutrition?
YTM: We have a lot of ideas and a lot of interest. Segment-wise, it might be going to specific needs, medium- to long-term needs, from fish or veg or pizza or chicken, which are key things. We have a list at the moment but we need to prioritise because at the beginning of next year we are aiming to have the next [strand], so every six months.
