An NPD consultant has outlined some of the ways in which food suppliers to the multiple retailers can start to reduce the high failure rate of new product launches.

Speaking at the Annual Conference of the Food Development Association in North Warwickshire, Jonathan Smith, MD of Axis Management Consulting, said the cost of NPD failure is huge and the situation needs to be addressed.

"It's mainly a case of focussing intensively and consistently on applying basic good practice - a return to common sense. It's not an all-or-nothing thing: any significant reduction in the failure rate makes a really big difference to the bottom line," Smith said.

He identified four main elements to reducing the failure rate of new product launches. Firstly companies need to learn to "just say no".

"This is the in-house starting point. It's about getting people within the supplier to take hold of the situation and focus on doing a smaller number of launches in a more effective way.

"Often there will be a need, at the outset, to 'weed the garden'. No business can effectively run the 70, 80, 90, or more projects that we often find on their project lists. Someone needs to take an axe to the list in order to create the breathing space to focus on the good projects," Smith said.

"No new projects must be started without them first being properly scrutinised and approved. It's all too common for projects to get far down the track before anyone has had the chance to give them any serious thought."

Secondly, businesses should enlist the cooperation of the retailer in order to reduce the cost of failure.

"A large part of this is about being pro-active in setting the agenda and priorities, and coming up with a modest number of good, well-thought-through projects. These can then be used to encourage the retailer to move away from a more scatter-gun approach. Five good launches is a better outcome than 20 mediocre ones," Smith said.

"The argument needs to be made to the retailer that failed NPD costs serious money and that it's in both parties interest to attack that cost. The consumer can also be your ally in persuading the retailer to drop unpromising projects. Letting the retailer see how consumers react to a new idea is far more effective than getting in to an argument based only on opinions," he added.

Thirdly, researching consumer opinion is important - most NPD launches that fail do so because of some sort of flaw in their appeal to the consumer.

"What's needed is to use cost-effective ways to apply consumer research to improving the success rate. For example, a handful of focus groups can make a major impact. They can weed out fundamentally weak ideas, help to fix those that have some merit but are not quite right, and enable you to fast-track those ideas with really strong potential," Smith said.

Fourthly, businesses must learn lessons along the way. Too often, companies move onto a new project as soon as the previous new product is launched.

"What's needed is to take the small amount of time needed to extract the valuable learning available. A properly prepared review meeting needs to be held. The key points need to be circulated to all concerned. And then people need to act on the learning," Smith said.