Product development for food products can be a complex process that requires careful planning, market research, and a deep understanding of the target audience.
It also requires creativity: you not only want to create something unique that satisfies a market demand, but you also want to consider how you can even create a new food category or sub-category!
This article breaks down the three essential steps of product development for food products, but with a twist. We don’t want to give you the “same old same old.” We want to arm you with the tools to make your mark on the world, change your category (or invent something new), and do something different.
1. Screening
In the food product development cycle, screening can be traditionally thought of as the process of evaluating the various factors involved in the development of a new food product. This crucial step in the food product development process involves analyzing factors like type of food, target audience, potential benefits, market sizing, and so on.
Concept Development
The first step in product development is the concept development phase. This phase involves brainstorming and ideation, where you gather ideas for the new food product. This is where you consider your target audience, the competition, market trends, and feasibility.
A word on the competition: if you’re creating a new category, the competition is next to non-existent. You’re creating a category where you’re the category queen!
Also, consider the type of food product you want to develop. You might choose to create a new snack or beverage, or you may decide to improve an existing product by adding new flavors or ingredients.
Market Research
Most advice about food market research will tell you to conduct traditional market research, including target market analysis, geographical analysis, pricing analysis, competitive analysis, SWOT analysis, and regulatory analysis.
We think it’s important for you to conduct this type of market analysis, but we do want to add an additional step: category analysis.
Category Analysis
When you research your target market, think about consumer segments that might not have their needs met by current offerings.
For example, the sports supplement market is a very well-established category. GNC was invented specifically to sell athletic supplements to body-builders, runners, and people trying to lose weight
But there wasn’t a supplement for runners who wanted to get up before the sun came up so they could get that extra energy boost in the wee hours of the morning.
Sure, there were running supplements designed to give you a quick carb infusion when you need an energy boost at mile 18 during your 23 mile run.
But there was nothing for early-morning runners. Coffee was your only alternative.
That is, until entrepreneur Hami Mahani, from Wilmington, Delaware – a running enthusiast himself – came up with the idea to focus on this “abandoned” market segment with his new supplement 6AM RUN.
Mahani saw an unmet need (it helped that he just happened to be in his own target market, so he scratched his own itch essentially) and filled it.
We would say that 6AM RUN invented the early morning running supplement sub-category.
The bottom line is, research your market with a specific eye to creating a new category that satisfies an unmet need, not just creating a new product in an existing market.
2. Consumer Testing
The next phase of your food product development process is consumer testing. Again, we talk about consumer testing with a twist.
The traditional way to go about this is through focus groups, feasibility tests, prototyping, and test marketing. All important steps in the consumer testing process.
But we want you to think of this process not like the legacy brands do, but like a software company tests market demand. This is often referred to as “lean product development,” a concept introduced by Eric Rise in his book The Lean Startup.
There are three great lean (sometimes called “agile”) food product development methods:
Farmers Market Testing
Take your food prototype to the farmer’s market (it’s not just for selling produce anymore). This is what Brittan Browning of GIlden Farms did with her new jam, which she believed could compete with the large brands on supermarket shelves.
That’s also what Natasha Sidhu, founder of dog food treat company Wagging Companions, did.
Natasha got a call from a non-profit rescue organization. “They told me about an outdoor market they were doing at a dog park. At this point, we were still only selling to friends and family. I agreed to do the event, and they told me I needed to bring a few branded supplies”
Survey Your Community
Start a community where you gather potential customers (or join a community and start interacting with them). You could start a Facebook group, or attract subscribers to a newsletter.
Ask your community if they’d like to try out early versions of your product. Those that raise their hands will be your “superconsumers.” Your superconsumers are your test consumers, your biggest advocates, and will shy away from telling you what they think about your new product!
Host a Party
This is an idea you can borrow from the restaurant industry. Test your food idea by hosting a party at your house.
Invite family and friends, but to get objective feedback, have them invite strangers. Then send a survey after the dinner to get their objective observations.
3. Commercialization
Your final step in the process is commercialization. What is your commercialization, or go-to-market strategy?
Here you want to think about your target market first and foremost. Are they mostly millennials and Generation Z? These generations are digital natives, so you want to devise a digital marketing strategy, and possibly reinforce it with a physical component.
Digital marketing
Leverage social media and SEO to drive traffic to your website. Right now Instagram is a great place for up and coming brands. The image-friendly platform can unlock your creativity and allows you to show your food product in living color.
And there’s nothing like reels and stories to evangelize your new category. Think about marketing your new category, the one you invented, instead of just marketing your product.
Ecommerce
Set up an attractive online store using Shopify, Square or the Woocommerce plugin for WordPress. Make it as easy to navigate as possible.
In-person Promotion
You can do the classic supermarket food testing by setting up a little stand in the grocery store aisle.
Or you can organize a multi-city promotional tour, with popup stores and events at retail outlets.
Challenges of Product Development
There are various challenges associated with food product production. Here are a few:
Food Safety and Quality Control
One of the primary challenges in food production is ensuring that the final product is safe and of high quality. This involves maintaining appropriate hygiene standards, ensuring proper processing and packaging, and implementing effective quality control measures to detect and remove any contaminated or defective products.
Supply Chain Management
Food production involves a complex supply chain that includes raw materials sourcing, transportation, storage, and distribution. Managing this supply chain effectively can be challenging, particularly when dealing with perishable goods that require careful handling and monitoring.
Regulatory Compliance
The food production industry is subject to numerous regulations and standards related to food safety, labeling, and environmental impact. Compliance with these regulations can be time-consuming and costly, and failure to comply can result in legal and financial penalties.
Cost Control
Food production is often subject to volatile commodity prices, fluctuating demand, and unpredictable weather patterns, which can make it difficult to control costs. Companies must balance the need to maintain quality with the need to keep prices competitive.
Sustainability
The food production industry has a significant impact on the environment, and there is growing pressure to adopt more sustainable practices. This includes reducing waste, minimizing water and energy use, and sourcing ingredients from sustainable sources. Meeting these sustainability goals can be challenging while still maintaining profitability.
Timeline for New Product Development
Finally, what’s a good timeframe to consider for new food product development?
The Iowa State University Food Product Development Lab Manual said that the timeline for developing food products can vary depending on the nature of the product. For a quick turnaround, companies may choose to create a line extension for an already existing product, such as a new flavor of a popular soda. This can typically be accomplished in 3-6 months.
For an average timeline of 6 months to 1 year, a company may develop a new product that can still be made on existing equipment. An example of this would be a new type of cereal.
The longest timeline, which can take 1-3 years, is reserved for brand new products that may be difficult to make or require new equipment to be designed or purchased. Examples of such products include co-extruded snacks and plant-based meat alternatives.
In addition, developing a new ingredient often takes longer than developing a finished food product because of the regulatory and sales hurdles involved. Companies must navigate the complex regulatory landscape and convince retailers and consumers to embrace the new ingredient. As a result, developing a new ingredient can take longer than developing a finished food product.
But take Iowa State’s recommendations with a grain of salt. Their tips seem to be focused on larger brands. If you decide to take on the lean startup mentality, you could reduce these timelines.
Conclusion
We wanted to provide you with a good starting point for developing a new food product, combining traditional methods with new, digitally focused strategies.
We especially wanted you to consider the importance of designing a new category. Category creation is one of the most powerful commercialization strategies available. If you can successfully do this, you stand to gain 76% market share of your new market space. Not a bad result!
