Future Innovations In Food And Drinks To 2015: Npd, Trend Convergence And Emerging Growth Opportunities -Aarkstore Enterprise

Finally, the effect of the economic downturn on product innovation is discussed as well as the most important drivers influencing consumer demand and what this means for future product launches.
Finally, the thorny issue of regulation and repositioning products on a healthy basis is analysed followed by a look at the problems surrounding global food supply.

Key features of this report

•Analysis of how the product lifecycle model is changing
•The report looks at the three major trends impacting on new product development in the global food and drinks sector – health, indulgence and convenience
• The analyzes the evolution of product launches in the global food and drinks market
• Case studies are included illustrating how the innovation environment within the global food and drinks industry is changing fast

Scope of this report

•Understand the key innovations in the food & drink industry and what the major trends will be over the next five years
•Understand crucial areas such as the growing trend for functional foods which is encouraging food companies and pharmaceutical firms to co-operate.
•Evaluate whether you should be looking to refresh your product portfolio in order to take advantage of emerging trends

Key Market Issues

•Over the last decade there has been a massive shift by many of the largest food and foodservice operators to reformulate and re-position products as the health debate has gained ground
• A disconnection exists between the acknowledgement of the need for “breakthrough innovation” and the recognition of the importance of external sources (be it suppliers, retailers or competitors) to be able to achieve that goal
•In many emerging markets multinational operators are facing increasing competition from local players that have started to develop their own premium and even super-premium brands with high quality products, packaging and promotions.

Key findings from this report

• A high level of innovative activity in the soft drinks sector can be attributed to an explosion in new combinations, flavour and tastes driven by indulgence and premiumization trends as well as a shift to new functional, nutraceutical and natural soft drinks lines
• The economic downturn has thrown up some new opportunities for traditional food categories. The shelf stable (canned and packaged) sector, long seen as the dowdy neighbor to more exciting categories such as frozen, chilled and fresh, has witnessed somewhat of a revitalization as consumers downgraded their spending patterns
• Consumers increasingly believe that own label brands are on a par with their branded counterparts.

Key questions answered

1. What are the major trends in innovation in the food & drinks market?
2. Which regions are seeing the most product innovation?
3. What are the best strategies to maximize the efficiency of the product development process?
4. What are the most innovative companies in the food & drink sector?
5. What does the industry consider to be the most important driver for new product development
 
 
  Table of Contents : 
Table of Contents
Future Innovations in Food and Drinks to 2015
Executive summary 12
Drivers of innovation 12
New approaches to innovation and product lifecycle management 13
What’s new in innovation? 14
Global NPD launch patterns 15
Case studies 16
Industry opinion survey results 17
Conclusions 18
Chapter 1 Drivers of innovation 20
Summary 20
Introduction 21
The impact of private label 21
Private label is changing the food and drinks marketing landscape 21
Private label penetration 23
Younger shoppers are more receptive to private labels 24
Private label and innovation 25
By increasing their quality private labels are now a credible source of innovation 25
Recession has allowed private label to offer an alternative to eating out 25
Food industry restructuring 26
M&A activity 26
Deal activity has declined, but looks set to increase again in the foreseeable future 26
“Bought in” innovation is part of the rationale for M&A 27
Recession and innovation 29
Innovation rates increased during the recession 29
Recession may actually make it easier to launch products 30
Some companies are now betting on innovation driving future growth 31
Consumer drivers of innovation 32
Two areas are affecting innovation 32
Purchasing criteria are having the greatest impact 32
Simplification and transparency are important trends 33
The health issue and claims regulation 34
Obesity continues to be a growing problem 34
Marketing innovation that backs product development is one way to tackle obesity 36
Regulation of health claims is retarding innovation 37
Rising innovation costs are reducing the rate of innovation 37
Re-positioning products as healthy 38
Global food supply issues 40
Chapter 2 New approaches to innovation and product lifecycle management 44
Summary 44
Introduction 45
Product lifecycle 45
Management of product lifecycles is changing dramatically 45
Time to market in particular is decreasing 45
However, measuring time to market is not seen as such an important metric 46
Types of product innovation 49
The industry believes breakthrough innovation is key however 49
Resistance to open innovation is harming breakthrough innovation 50
Examples of innovation 51
Health breakthroughs 51
Packaging can also play a strong role in offering new health benefits 52
Line extensions 52
Line extensions offer lower risk innovation 52
Line extensions are not risk free however: is Starbucks risking its brand? 53
Other industries are extending into the food and drinks space 55
Varying brands by region can be a powerful tactic 55
Me-toos 56
Incremental innovation is the norm in food and drinks 56
Adopting an open innovation strategy 56
General Mills G-WIN Worldwide Innovation Network 58
Other open innovation examples 60
Consumers’ role in open innovation 62
Other examples of open innovation 63
The way ahead for open innovation 65
Chapter 3 What’s new in innovation? 70
Summary 70
Introduction 71
Health 71
Functional Foods 72
Kids’ specific products 74
Targeting kids with functional foods will increasingly attract scrutiny 75
Weight management 76
Digestive health 80
Beauty-enhancing foods 82
The future for functional foods 84
There are risks as well as opportunities when targeting health 85
Indulgence 87
Specialty gourmet foods 87
Variety in flavor is also growing 88
Ethical retailing 89
Organic food is still the most important segment 89
Simplification of products is also a key area to target 90
Convenience 92
Microwaveable packaging is a key trend 92
Packaging and innovation 94
Offering portion control is important 95
On-the-go is still an important trend 95
Packaging can help to target more specific consumer groups 96
Other areas where packaging innovation can be of benefit 96
Chapter 4 Global NPD launch patterns 100
Summary 100
Introduction 101
Innovation levels by product market 101
Breakthrough innovations by market 101
Breakthrough innovations are becoming rarer, even when innovation rates are up 101
Soft drinks are the one bright spot of innovation 103
Breakthrough innovations by region 104
Europe is the key regions that is cutting back on true innovation 104
Innovation levels by type 105
Formulation is the main type of breakthrough innovation 105
NPD by overall product category 107
Evolution of NPD by region 109
Latin America is an increasingly important region 109
But the industry still sees Asia-Pacific as the most innovative region 110
Overall NPD trends 111
Health 112
Convenience 113
Indulgence 114
Chapter 5 Case studies 118
Summary 118
Introduction 119
New partnerships and alliances 119
Foodservice joins forces with mainstream food 119
Food meets pharmaceuticals and biotechnology 121
Global players tackling open innovation 123
General Mills 123
Kraft 125
Chapter 6 Industry opinion survey results 130
Summary 130
Introduction 131
NPD and building competitive advantage 131
NPD is considered the best mechanism for gaining competitive advantage 131
Key drivers for future NPD 132
Emerging markets are seen as the key driver of future growth 132
Views on scientific and technological advances clash with innovation ambitions 133
Importance of different types of innovation 134
Breakthrough innovations are still seen as the most important 134
Sources of innovation 136
The industry appears resistant to external sources of innovation 136
The NPD cycle 137
The time-to-market for new ideas appears set to fall significantly 137
Innovation success metrics 139
Despite reducing time to market being seen as important, measuring it isn’t 139
Trends in innovation 140
Most innovative food and drinks companies 141
Chapter 7 Conclusions 144
Summary 144
Introduction 145
The need for “breakthrough innovation” 145
Reliance on internal innovation ideas needs overhauling 145
Reap the rewards of open innovation 146
Cross-fertilization and innovation 147
Emerging market growth and innovation 148
Consumer pressures on innovation 148
Future NPD trends 149
Health and wellness will continue to be the leading trend 149
Indulgent innovation will focus on offering high quality and specialty products 150
Convenience benefits and innovative packaging will go hand-inhand in the future 151
Ethical products will be very important in the future 151

List of Figures
Figure 1.1: Private label growth ($m) in Europe, Asia Pacific and the US, 2002–2012 22
Figure 1.2: Number of M&A deals (by deal date) in the food and drinks sector, 2007-2009 26
Figure 2.3: Length of average NPD cycle now and in five years 46
Figure 2.4: Importance of innovation success metrics 47
Figure 2.5: Importance of innovation types for food and drink NPD now and in next five years 50
Figure 2.6: Nutricia Forticare 51
Figure 2.7: Rising Beverages Activate functional drinks 52
Figure 2.8: Starbucks Via instant coffee 54
Figure 2.9: General Mills G-WIN website 60
Figure 2.10: External contacts made by Cadbury in open innovation program 61
Figure 2.11: MyStarbucksIdeas website 64
Figure 2.12: Current and projected share of new products developed using external elements 66
Figure 2.13: Key sources of product innovation for food and drinks companies in next five years 67
Figure 3.14: Unilever Amaze kids’ specific brain food 76
Figure 3.15: Candia Silhoutte Active 79
Figure 3.16: Campina Optimel Control 80
Figure 3.17: Kraft LiveActive Chewy Granola Bars 81
Figure 3.18: Danone Essensis 82
Figure 3.19: Probi Bravo Friscus 84
Figure 3.20: Goodbon Maple Chunks 88
Figure 3.21: Moulin du Calanquet fruit juice 88
Figure 3.22: Kraft Triscuit 91
Figure 3.23: Bonduelle Vapeur vegetables 93
Figure 3.24: La Demi-Calorie Galettine Moment 94
Figure 3.25: Fleur d’Olive Choc-o-lait 94
Figure 3.26: The reusable milk jug available in Waitrose and Sainsbury’s in the UK 97
Figure 3.27: ConAgra Foods Healthy Choice trays 98
Figure 4.28: Share of global breakthrough innovations launched (% all launches within each market), by selected food and drinks markets, 2006-2009 102
Figure 4.29: Share of breakthrough food and drinks product launches by region, 2006-2009 105
Figure 4.30: Innovation by type, 2006-2009 (%) 106
Figure 4.31: New product launches by category (% of overall product launches), 2006-2009 108
Figure 4.32: New product launches by region (% of overall product launches), 2006-2009 109
Figure 4.33: Innovation levels of companies in each region in the next five years 111
Figure 4.34: Importance of selected trends in food and drinks NPD over next five years 112
Figure 4.35: Importance of health sub-trends in food and drinks NPD in next five years 113
Figure 4.36: Importance of convenience sub-trends in food and drinks NPD in next five years 114
Figure 4.37: Importance of indulgence sub-trends in food and drinks NPD in next five years 115
Figure 5.38: Burger King Krinkz fries 120
Figure 5.39: BK Fresh Apple Fries 121
Figure 5.40: General Mills Progresso Light soup 124
Figure 5.41: Kraft Bagel-fuls 127
Figure 6.42: Importance of investment areas for competitive advantage in next five years 132
Figure 6.43: Importance of key NPD drivers over next five years 134
Figure 6.44: Importance of innovation types for food and drink NPD now and in next five years 135
Figure 6.45: Relative importance of different sources of product innovation ideas for food and drinks companies over next five years 137
Figure 6.46: Length of average NPD cycle now and in five years 138
Figure 6.47: Importance of innovation success metrics 140
Figure 6.48: Importance of trends for food and drink NPD over next five years 141

List of Tables
Table 1.1: Total private label penetration in Europe, Asia Pacific and the US, by country, 2002– 2012 24
Table 4.2: Share of global breakthrough innovations (% of all launches within each market) by selected food and drinks markets, 2006 – 2009 102
Table 4.3: Number of global breakthrough innovations (actual) by market, 2006-2009 103
Table 6.4: Respondents’ views on the which are the most innovative companies in global food and drinks 142
 
 

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The Future Of Pc/tv Convergence: Opportunities And Challenges In Online Video-Aarkstore Enterprise

As a result, the online and broadcast markets are colliding, with video services making the move to the PC environment and web-based services becoming a core element of the TV viewing experience. There are an ever-expanding number of channels available for content to be distributed over and an ever-increasing range of technologies to aid the transmission.

Online video delivery is emerging as a true competitive threat to existing content service providers, offering the potential to extend reach to new consumer groups. Broadcasters and content owners are delivering services direct to consumers, regaining some of the control they had lost to other players across the value chain, while pay-TV providers and video rental firms are adding online video to their service mix to boost their appeal. On the flipside, consumer electronics manufacturers and pay-TV operators are adding web-based elements to their products and services. Increasing integration of web browsers into home devices, the emergence of TV widgets, and further deployment of enhanced interactive services aim to add greater value to offerings, and could act to divert consumer attention away from the PC for some basic tasks.

Scope of this report

Overview of the market trends, technological evolution and changing business models that have driven PC/TV convergence.

Market projections to 2012 for key communications and entertainment services including consumer broadband and mobile broadband.

Identification of the key challenges facing the key participants targeting PC/TV-related opportunities, including actionable insight into how to best approach this rapidly evolving opportunity.

Examination of the evolving competitive environment and the ways in which various protagonists are targeting PC/TV convergence opportunities.

In-depth analysis of the strategies being employed by a number of leading content providers and device manufacturers with regards to their involvement in the online video and/or connected device markets.

Insight into the future trends that will impact on the development with regards to PC/TV convergence, including identification of best-practice and emerging opportunities.

Reasons to purchase this report

-Gain a comprehensive understanding of how market trends are prompting convergence of PC- and TV-based services, and the impact such developments will have on traditional business models and strategies.
-Understand how the competitive environment is changing, and how content owners, broadcasters and device manufacturers will seek to gain a share of the spoils in the PC/TV convergence arena.
-Compare how different content providers and device vendors are positioning and developing their services and products in order to differentiate from the competition, gain market share and drive revenue growth beyond their core/traditional offerings.
-Appreciate the challenges faced by companies targeting PC/TV convergence opportunities, and understand why radically new market strategies will be required to make a significant impact.
-Identify future trends that will impact on the potential of PC/TV convergence, and gain insight into how to best approach this rapidly evolving opportunity.

Key market issues examined

In many countries, broadband is the fastest growing consumer technology of all time and is developing into a utility that already has almost ubiquitous coverage in advanced markets. The rise of broadband networks and consumer connections is a key driver for online video services, enabling consumers to connect to a broader range of rich media content and applications without the delays that were evident with narrowband dial-up services.

Increased internet usage is also having a profound effect on traditional TV viewing in almost all country markets. Up to a third of consumers in major developed markets are watching less TV as a result of their increased internet use; a significant proportion, and a trend which is challenging existing business models, especially those that rely on advertising as a primary revenue source. Many broadcasters are seeking new opportunities by pushing content via online channels to exploit the huge growth of online advertising.

Content owners are still not providing full support for new distribution channels. Movie studios have watched on as the music industry has been ravaged by piracy, and understandably want to restrict the impact it has on their businesses in whatever ways they can. As a result, content owners will continue to be both selective and cautious when seeking online distribution partners, and will demand that DRM is applied to high-value content such as new-release movies for the foreseeable future at least.

Portable PC-based video boosted by netbooks and mobile broadband. Until relatively recently, PCs were bulky devices tethered to fixed-line connections for internet connectivity. But the situation has changed considerably over the past year, with ultra-portable netbooks hitting retail shelves and mobile broadband starting to emerge as a mainstream proposition. Expect to see mobile broadband functionality to increasingly be integrated into netbooks over the next year, enabling streamed online services to be accessed on the move and opening up new audiences for content providers and device manufacturers alike.

Direct TV connection is essential if online video is to become mainstream. The vast majority of online video content is currently watched via a PC. But while PC-based services will remain attractive, offering the ability to watch content directly on a TV set is crucial if online video services are to appeal to the mainstream. Delivering this functionality is now a key focus of both device manufacturers and content providers.

Key findings from this report

Online video delivery is emerging as a true competitive threat to existing content service providers, offering the potential to extend reach to new consumer groups.
Exploiting opportunities across the connected home environment is seen by many PC and CE device manufacturers as a key way to boost average selling points. With online video now becoming available via a wider range of providers, the previous inertia in the CE market with regards to delivering connected devices is slowly being overcome.
To maximize likely returns, content owners will need to fully support their online partners; a half-hearted approach, where only low-value or archive content is made available, could dilute service potential.
Connected TVs are likely to become the norm within the next five years. By this time, it may not be economically viable for manufacturers to offers sets without connectivity.

Key questions answered by this report

What are the major trends shaping and driving PC/TV convergence?
Why are broadcasters and rival content providers investing so heavily in the deployment of online video services?
Which factors are likely to inhibit the pace of PC/TV convergence market development and why?
How are different market protagonists targeting the opportunities afforded by PC/TV convergence?
To what extent will emerging online services threaten the current status quo across the video distribution market?
What are the forecast market growth rates to 2012 across underlying technologies including residential broadband services and mobile broadband?
How will the market for converged video services evolve, and which future trends will impact on developments over the course of the next 2-3 years?
 
 
  Table of Contents : 
The Future of PC/TV Convergence
Executive summary 10
Market context 10
PC-based video services hit the mainstream 11
Delivering internet-based services to the TV 12
Content provider and device manufacturer profiles 13
The future of PC/TV convergence 14
Chapter 1 Introduction 18
Introduction 18
Who is this report for? 18
Definitions 19
Convergence 19
Digital pay-TV (DTV) 19
Digital terrestrial TV (DTT) 19
Internet Protocol TV (IPTV) 19
Internet TV 19
Mobile broadband 20
Mobile internet 20
Mobile TV 20
Video on demand (VOD) 20
WiMAX 20
Chapter 2 Market context 22
Summary 22
Introduction 23
PC/TV convergence market trends 24
Broadband changes the rules of the game 25
Higher speeds bring new content-related opportunities 28
Consumers exploit broadband potential 29
Changing the face of media consumption 31
Broadband challenges remain 31
Entertainment market in flux 32
TV market in transition 33
Changing content consumption patterns 34
Traditional media hit 36
Traditional advertising market under pressure 41
Physical media is not (yet) dead 45
Significant obstacles exist for online video distribution 47
Move to high definition places greater demand on connectivity 47
Piracy concerns restrict progress 49
DRM restricts consumer uptake 51
Content rights issues restrict geographic expansion 52
Business model uncertainty reigns 53
Content owners are still not providing full support for new distribution channels 53
Chapter 3 PC-based video services hit the mainstream 56
Summary 56
Introduction 57
Online video delivery reaches the mass market 57
Online video is no longer synonymous with low quality content 58
Online video is a disruptive force in the video delivery arena 61
IPTV may lose its competitive advantages 63
Broadcasters take a more direct approach 65
Broadcasters and content producers make strong investment to new channels 65
BBC iPlayer provides numerous learning points 67
One-stop online shops for broadcasters’ content emerge 68
Consumer uptake on the rise 69
The demographic divide 72
Maximizing online potential 75
TV on the move 78
Mobile TV starts to gain some momentum 78
Not yet a mainstream proposition 79
Alternative portable solutions are gaining more traction 82
Significant challenges remain for mobile TV deployment 84
Portable PC-based video boosted by netbooks and mobile broadband 85
Netbook market growth will boost demand for portable video 85
Mobile broadband offers new possibilities 87
Chapter 4 Delivering internet-based services to the TV 92
Summary 92
Introduction 93
Digital entertainment devices get connected 93
The death of the ‘living room PC’ concept? 94
No one-size-fits-all home content hub exists 95
In-home content sharing takes center stage 95
Direct TV connection is essential if online video is to become mainstream 96
Media extender market makes slow progress 98
Consumer electronics devices get in on the act 100
Major TV manufacturers launch Ethernet-connected models 101
Widget-based services emerge 101
Yahoo and Intel drive a widget-based approach 103
Does consumer demand for connected TVs exist? 104
Does delivering internet services to the TV make sense? 105
Internet connectivity takes DVR-based services to the next level 107
Satellite pay-TV operators look to gain a foothold in the VOD market 108
Online video: complement or substitute? 110
Games console manufacturers push online video services 112
Sony and Microsoft battle for the living room 114
Sony playing catch-up 116
Consoles already well regarded as multimedia hubs 116
Consoles add to the video disruption 117
Connecting the PC and TV environments is a difficult task 119
Chapter 5 Content provider and device manufacturer profiles 122
Summary 122
Introduction 123
Amazon 124
Apple 126
BBC iPlayer 129
Comcast 133
Google / YouTube 135
HP 138
Microsoft Xbox 360 141
NBC/Fox Hulu 143
Netflix 145
Sony 148
Chapter 6 The future of PC/TV convergence 152
Summary 152
Introduction 153
The future of PC/TV convergence 153
Online video will be a mainstream alternative to traditional distribution 153
Content owners must fully embrace new distribution channels 155
DRM will remain a stumbling block 156
Business model uncertainty will continue 157
Internet-connected, networked consumer electronics devices will become the norm 159
Leveraging content across multiple distribution platforms will be essential 161
Broadband providers must be fairly recompensed for their role in content delivery 163
Chapter 7 Index 166
List of Figures
Figure 2.1: Global consumer broadband subscribers, by platform, 2007-2012 26
Figure 2.2: Global consumer broadband subscribers (000s), by region, 2007-2012 27
Figure 2.3: Broadband uptake boosts multimedia usage (% users by activity), UK 30
Figure 2.4: Use of traditional communications services on the decline in the UK (minutes per person per day), 2002 and 2007 35
Figure 2.5: Increasing internet usage hits TV viewing 37
Figure 2.6: Uptake of new media platforms lower among older consumers 38
Figure 2.7: New video distribution platforms are gaining traction 40
Figure 2.8: Proportion of advertising spend attributable to TV and internet, by country (% proportion), 2007 43
Figure 2.9: The importance of internet advertising (% of advertising spend), by country, 2006-7 44
Figure 3.10: Short-form content still rules in the online world (% users accessing content by type and country) 58
Figure 3.11: User-generated content is highly valued by younger consumers 60
Figure 3.12: Proportion of broadcasters’ IT budget being invested in new distribution channels 66
Figure 3.13: Proportion of online population streaming online video, December 2008 70
Figure 3.14: Online video reaches 80% of US consumers 71
Figure 3.15: US online video viewing declines with age 72
Figure 3.16: Online video usage declines with age 74
Figure 3.17: Factors that would encourage greater use of online video services 75
Figure 3.18: Mobile multimedia usage remains relatively low 81
Figure 3.19: Portable video usage remains relatively low 83
Figure 3.20: The rise of mobile broadband 88
Figure 4.21: Watching TV and surfing the web concurrently is commonplace 106
Figure 4.22: Worldwide console shipments, 2005-2007 113
Figure 4.23: Consumers show some interest in console-based multimedia applications 117
Figure 5.24: The rise of legitimate online TV services in the UK 131
Figure 5.25: Content provider and device manufacturer summary 150
List of Tables
Table 2.1: Global consumer broadband subscribers (000s), by platform, 2007-2012 26
Table 2.2: Global consumer broadband subscribers (000s), by region, 2007-2012 28
Table 2.3: Proportion of UK internet subscribers participating in multimedia usage by type (% users) 30
Table 2.4: Time spent using communications services (minutes per person per day, UK), 2002 and 2007 36
Table 2.5: TV viewing habits in comparison to internet usage (respondents), France, Germany, Italy, UK, US and Japan 37
Table 2.6: Uptake of communications services, by age (proportion of UK households) 39
Table 2.7: Time spent watching movies/TV programmes (% of viewers watching at least one hour per week, UK) 40
Table 2.8: Proportion of advertising spend attributable to TV and internet, by country (% proportion), 2007 43
Table 2.9: The importance of internet advertising (% of advertising spend), by country, 2006-7 45
Table 3.10: UK online video usage (% users accessing content), 2008 59
Table 3.11: Types of online content most valued by different age groups (% users), UK, 2007 60
Table 3.12: % of online population streaming online video, December 2008 70
Table 3.13: US consumer TV and video viewing patterns (% users), 2008-09 71
Table 3.14: Average time spent watching online video (hours per week, US) 73
Table 3.15: Proportion of households using the internet for multimedia applications (by age, UK) 74
Table 3.16: Proportion of adult internet users using mobile phones to watch video content (% users) 81
Table 3.17: Portable device usage for multimedia (% users by frequency), UK, 2008 83
Table 3.18: Notebook mobile broadband users (000s, global), 2008-2014 88
Table 4.19: Users watching TV and surfing the internet concurrently (% user by frequency), 2008 106
Table 4.20: Global console hardware shipments (000s), 2005-2008 113

 
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