Holly Baumgart has spent a decade at Sargento Foods, one of the largest dairy companies operating in the US. Baumgart has just started in a new role – SVP for innovation – and, speaking with Just Food, discusses how the cheese maker is responding to trends such as protein, GLP-1 usage and convenience, as well as how the family-owned business uses AI in its NPD – and how the company is looking to be more agile in a competitive market.

Dean Best (DB): In your new role, what do you think the priorities should be for Sargento when it comes to innovation? What consumer trends are you looking to target and why?

Holly Baumgart (HB): I am very honoured to work at an organisation that invests in innovation and wants to be the innovation leader within the dairy industry. Our department’s role is to continue on that trajectory and really plan innovation for the longer term by bringing breakthrough technology to the dairy industry and to our consumers, as we have done in the past.

We want to continue on the path we have been on but also to accelerate it. You might have seen that we recently launched Mighty Bites, which is our first foray into the meat-case section of the grocery store. Bringing dairy and our high-quality ingredients into that part of the store is a great new opportunity for my team to innovate in that space.

DB: How much has the increase in GLP-1 use started to rise up the agenda at Sargento when you think about your NPD strategy?

HB: The dairy case and our core product lines tend to be nutrient dense already, which is something GLP-1 users are looking for.

We feel there is a big opportunity for the dairy industry, and for Sargento, to talk about the products we currently have in the context of what GLP-1 users are looking for, maybe even more so than we have done in the past. It is really about capitalising on a trend that has already been going on, as many consumers – whether they use GLP-1 or not – are looking to live a healthier lifestyle and increase their protein and nutrition through their food. That is a broader trend we see.

As we develop our new product pipeline, we are specifically looking at leveraging our expertise in that area and bringing new and exciting offerings to consumers who are looking for that lifestyle.

DB: Looking at the early sales signals, yogurt products have benefited from GLP-1s. Are users also looking to increase their cheese consumption?

HB: I think so. We have our snacking portfolio. String cheese, for example, is a great product: high in protein, low in sugar, nutrient dense and quick, easy and convenient. We are seeing that product line do incredibly well at this time.

Our Balance Breaks portfolio – natural cheese paired with nuts and dried fruit in an easy snack on the go – also fits that profile well. We are seeing consumers, GLP-1 users or not, gravitate towards our snacking platforms in that way.

DB: So, as well as protein and GLP-1, convenience sounds like another macro trend feeding into your R&D pipeline?

HB: Yes, that is true. We have seen that for many years with convenient solutions, by bringing dried fruit and nuts together with cheese in a very convenient snack pack. We introduced that platform in 2015 and have continued to see it accelerate, with multiple platform extensions that we will continue into the future. We are seeing that growth continue as we meet those consumer needs.

DB: How do you marry your NPD strategy with increased price consciousness when shoppers go to the grocery store?

HB: It is certainly something we are watching and observing. I think that is where our innovation pipeline really differentiates us from what consumers could buy from a commodity standpoint.

We can provide value through the offerings we bring, even in a price-conscious world.

If we are bringing something new and differentiated – and we are seeing that the younger generation – the Zillennials – are willing to pay for quality food, unique flavour profiles, something different or more convenient. They are still willing to pay for that high-quality food offering that meets their needs.

If we can come up with the right offering – and that is why we do a lot of consumer research – we can provide value through the offerings we bring, even in a price-conscious world.

DB: How do you balance the need to move quickly and test and learn with the realities of operating in the dairy sector and with the scale of Sargento?

HB: I hear what you are saying. I am a self-professed process geek. This is the sort of thing I honestly enjoy: how we do more, faster and better.

In today’s world, there are a lot of interesting developments with the introduction of AI technologies. We are seeing food industry innovators leverage that type of technology to thoughtfully come to market with new ideas in a potentially faster way. We are looking at new technologies to help us and aid our process but we are never going to get away from the human in the loop, the human process element, and talking to real consumers about our product offerings. We feel very strongly about that.

There are some really interesting things happening that we want to take advantage of to make sure that we are hitting speed to market, that we are as effective and efficient as possible, and that we remain competitive within the industry, as we have been in the past.

DB: If you were to think about the timeline from spotting a consumer need to getting a product on the shelf, what is the rough timetable?

HB: We have done everything from six months to ten years. The six months might be when we spot a trend – for example a flavour trend – and we see a great, unique opportunity to bring that to our consumers. On the longer-term horizon, that tends to be the technological breakthroughs that we are known for from our food science team, which I am now excited to be leading.

It is hard to pick a number in between because it depends on what we are doing. We get very excited about the short-term ones as well, because that is when you can really build on something that has momentum, even via social media. Trends are turning quicker than they ever have before, especially around flavour, because social media has great influence on different viral trends that pick up very quickly.

DB: Do companies like Sargento need to be quicker and nimbler nowadays to stay competitive?

HB: I do think so. Otherwise, you could miss a really important opportunity to be relevant to your consumers and those who love your brand and your products. No-one wants to miss something that is exciting for them to bring to their consumers.

DB: How are you looking to become more agile? You mentioned the use of technology. Can you give a couple of examples?

HB: When we test with consumers, we want to show them images of our products and ideas. We are leveraging AI technologies to help us bring those to life in a new and faster way, so we can show different examples and ideas and iterate on those directly with consumers in focus groups.

It has been really exciting to be able to iterate on the fly and get real-time feedback, then show different ideas coming to life in front of consumers and get further feedback. That has aided us in our process. It is one example of how we are getting better, more accurate, real-time feedback on our ideas that might have taken longer in the past.

DB: How else are you using AI in product development?

HB: We are also using it to gather data on trends. AI has made it easier for us to analyse larger data sets on what is happening in the industry. One of my favourite facts is that one of the top topics on social media is food, because people love food. It brings people together and they want to post about what they enjoy.

We can mine and learn about different trends faster and in a more distinct way by leveraging AI tools

We can mine and learn about different trends faster and in a more distinct way by leveraging AI tools. Of course, we have other data sources as well but this has augmented what we were already doing, helping us understand the robustness of trends and how deep they are in different parts of the country, for example. We can use that information to help design our pipeline to meet the needs of existing Sargento lovers and consumers we want to grow with.

DB: What has been the internal staff reaction to using AI in their roles? Is there concern about the impact on jobs?

HB: I am very fortunate to work at Sargento, where we have historically stated that we don’t want to replace our human family members with automation. We believe in that and it makes for a trusting environment.

What I hear from most of our employees is excitement about what AI can bring from an efficiency standpoint: how they can do their jobs better and faster and have more access to data that would have taken longer or been more difficult in the past. People seem excited about the advancements that are coming to us on a day-to-day basis.

I know concern about AI is widespread but for us it does not seem to be a daily concern we are combating. In fact, it is more an opportunistic view of where we can go from here.

DB: When you weigh up whether to move into new categories, what key attributes must they have to make you commit to invest?

HB: I was also our VP of strategic planning, so that is near and dear to my heart.

Our philosophy has always been to start with our capabilities: what we have been successful at in the past for our customers. Understanding who we are, what our core capabilities are, and where they could apply to bringing our real-food vision to life for customers is our initial lens.

Rather than starting from ‘We could get this margin here’ or ‘That might be a big volume opportunity’, we start with who we are, what our strengths and where we think we can add the most value.

With Mighty Bites, this is a snacking platform built off our snacking capabilities that we learned about when we launched Balance Breaks in 2015. Going from natural cheese into snacking has been an evolution over many years, and that capability has allowed us to bring that new offering to customers in a space where we felt we had an opportunity to shine.

DB: Sargento has recently acquired La Terra Fina, the dips and quiche business? What makes you decide to buy a business rather than try to innovate in-house?

HB: We are always looking at the right value opportunity for us as a company. When we started talking to La Terra Fina, we felt they had huge expertise in dips and quiche and a significant knowledge base built up over many years.

Considering us building that capability from scratch versus partnering with an industry leader, it was a great opportunity. It came at the right time and was a good fit. Of course, we are always doing make-versus-buy analysis from a financial standpoint to see what makes sense.

We have also built capabilities from the ground up many times and that has been successful for us, too.

DB: Have you made any forays into vegan cheese, given how challenging that area has been on taste and texture?

HB: It has struggled to get taste and texture right and that resonates with me because I am vegetarian but I could never go the vegan route.

We have been watching that space closely for many years to understand where the technology is. It may be that technology evolves in the future.

For now, we are really focused on our core product line of real natural cheese and innovating in that space.

DB: Do you sell any whey protein from the cheesemaking process to food manufacturers?

HB: From our cheesemaking plants, yes, we do have whey product offerings coming from that.

DB: Given the growth in protein across food, how much of a priority is it to invest more in that B2B part of your R&D and capex?

HB: It has certainly been interesting to watch the price of whey protein increase in the marketplace. However, our core focus right now is our end-consumer and our real natural cheese business and growing that in line with our customers’ needs. That has been our primary focus.

DB: When you think about the success of innovation, what KPIs do you use to judge whether a new product is working?

HB: We look a lot at end-consumer feedback. Often we will do post-launch consumer studies. We look at repeat, at consumer feedback and at trial to understand whether the product is reaching the right consumer. It is really consumer-driven.

DB: On a corporate level, is there a percentage of annual sales you look to generate from products launched in that year?

HB: We do have some targets like that and we consider ourselves best in class. However, the end goal for us is making sure we are planning for longer-term growth versus a short-term sales win.

If we can launch a platform that customers really love and that grows, we know it will naturally grow our brand, our success and our family over time.

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We’re delighted to invite you to Dairy Innovation Strategies USA, a two-day event in Chicago this September 15-16 exploring the business issues shaping the US dairy sector.

Across the two days, you’ll hear presentations and insights from leading brands and organisations including Groupe Bel, Sargento Foods, DMI, Organic Valley and many more.

Alongside the conference programme, there will be exhibition stands showcasing the latest products, services and innovation, as well as multiple networking opportunities throughout the event – giving you plenty of chances to meet industry peers, exchange ideas and make new connections.

Whether you’re looking to stay up-to-date with the latest developments in the industry, discover new opportunities or connect with key players across the sector, we’d love to welcome you to Chicago.

Find out more on the website or register now to secure your place.