1 Innovation in an Organic & Natural BrandBob Kaake Annie’s Chief Innovation & Quality Officer We have heard from Paulo about formulating a clean-label product and Cassandra about sourcing consumer-friendly ingredients that will go into it. Now I want to spend a few minutes talking about how to use those ingredients to innovate in your brand. I have been working with Natural & Organic consumers for the last 10 years, so will focus my discussion on them, BUT N&O Insights spill over to the "conventional" consumers, especially with today's millennial consumer. This year, Natural Products Expo in Anaheim had over 77,000 attendees; 3000 exhibitors, 650 of which were first time exhibitors More CEO’s and leaders from traditional big brands were spotted on the show floor this year than ever before; Natural and Organic has reached a point where you could argue that Anaheim is no longer a Natural Food Show, but just a Food show. So what makes this space different and how do we drive innovation. My presentation today will use some examples from my time at Annie’s, but I think many of these learnings can apply to most food brands today.
2 Consumer First What is your brand promise? How will your product fit a consumer need? Are there other brands that offer the same promise? How will your product be different? How does your target consumer define value? Innovation begins with the consumer and understanding how your brand can fill an unmet need. Ask yourself how will your idea will be different and how will your consumer value the product. This can definitely be tough, because times are changing. Using Annie’s as a backdrop, let’s look at how we could go about to develop a new kid food.
3 Different Food My Kid Food Today’s Kid FoodFirst of all, Kids are eating different today than when I grew up for a variety of reasons On the left is a picture of food I grew up with, including my third grade lunch box. On the 1. Better understanding of nutrition Better food technology More brands, including smaller emerging ones that can use social media and other means to get their message out, and not have to rely on expensive advertising Different way Mom’s and Dads are valuing food
4 Different Values Brand Values For ME Great Taste Sustainable AuthenticTransparency Trusted When I was growing up, my mom valued well-known brands at a good price that were easy to make to feed a family of 8 Today, consumers, especially millennial mom’s and dad’s, use a different set of criteria to measure value These are some of the values that our Annie’s consumers and many organic and natural consumers share
5 For ME* Presence of Positive Absence/ Free From Convenience*and my family Presence of Positive Whole Grain, Added Fiber, Lower in Sugar, Organic Absence/ Free From Gluten Free, Peanut Free, No preservatives, No HFCS, No Artificial Flavors/ Colors Convenience Portability, Single Serve, Quick/ No Preparation
6 Great Taste No compromiseIf my kids won’t eat it, I won’t buy it again Kids eat differently today, especially with Millennial parents Nutrition is important, but taste ALWAYS trumps!
7 Sustainable nature's income rather than “Sustainable development is living on nature's income rather than it’s capital” Bjorn Stigson, President, World Business Council for Sustainable Development
8 Authentic Real Food Real Ingredients Real Farms Real People who care
9 Transparency How/ Where was it grown? Produced?Was it sourced in a socially responsible way? Fair labor practices/ wages Ethical treatment of animals Sustainable practices Is there any story? “Is the Chicken Local?” Organic Sugar Story
10 The Native Green Cane ProjectLargest sustainable agriculture project in the world Pioneered green cane harvesting (instead of burning cane fields) Replaced synthetic fertilizers & pesticides with natural pest & disease control Leftover sugar cane pulp powers the mill and surrounding communities Carbon Neutral – over 25,000 metric tons of CO2 saved per year Higher resistance to drought and pest damage 23 times the biodiversity of conventional fields, including many rare species Cutting-edge labor and social programs for employees and the community
11 Trust Trusted Character Proactivity Competence Proactively Doing ItDoing the Right Thing Doing things Right
12 So how does this impact my work?Take time to know your consumer Listen to what they (and their friends) have to say Information highway is vast and varied; what they read on the internet is their “truth” (so accept it!) Be their advocate; not their judge (consumer is always right) Always make a “better” decision Continuously learn and improve Take time to know your consumer 1:1, focus groups, Facebook, consumer relations, sampling stations/ tradeshows I can’t count the amount of hours I have spent behind two-way glass listening and observing consumers Listen to what they (and their friends) have to say .- 68% of millennials get their news and information from social media Information highway is vast and varied, so accept that what they read on the internet is their “truth” -- information also travels very fast, so you need to keep up with the latest trends. Be their advocate; not their judge (consumer is always right) - as a nutritionist, we know that the body doesn’t know the difference between HFCS and sugar; but that isn’t the point; Organic & Natural consumers view it as bad, so we must too. Always make a “better” decision - of course we always want to make the best choice in sourcing and ingredient selection, but often that can come with a premium price. Know what your consumer values, and weigh your options to make the better choice. Continuously learn and improve - but also beware that your choice of ingredients two years ago, may no longer be the better choice and you might need to consider to reformulate. When we first formulated Annie’s Cheddar bunnies, we were using a yeast extract to boost the umami notes. Then we started getting some consumer questions about what is yeast extract and what do you use if for? That heightened my senses to the issue. Then I saw a couple “No Yeast Extract” claims at Natural Products Expo. Then we got a question from a Whole Foods buyer. That was enough for us to make the decision to remove yeast extract. It wasn’t as straight forward as we had anticipated and took us over two years to figure it out. Meanwhile we kept getting more questions, to which we responded that we were committed to find a solution. Consumers were grateful we were being transparent with our motives. That is just one example. BPA in retorted cans was another hot issue for Annie’s and took over 5 years of continuous discussions with our comanufacturer and our can supplier to finally find a non-BPA can solutions. Carrageenan was another hot button. And while it is currently an acceptable ingredient in organic products, it only took one report from the Cornucopia Institute to cause consumers to start questioning the ingredient. The information came fast, consumer perception changed just as quickly, and we had to move fast to remove it from our products.
13 Where can I find resources to help?Suppliers Trade Shows Competitive Products Organic Standards (7 CFR ) As developers, we actually should know more about the science, sourcing, and story around our ingredients, so we can make the "RIGHT" decision for our consumers, it isn’t always easy. Here are some suggestions on where to find some help Suppliers are by far my number 1 “go to” source. Ask them about how their ingredients are sourced and manufactured. What are the advantages & disadvantages in using an ingredient. Talk to your suppliers about what you are trying to do and what your hurdles are. Ask them how will it be labeled on the ingredient deck and express any concern if you don’t think it will match your brand standard. If they don’t have the ingredient, ask them if they are working on it or if they know of anyone else that you should talk to. Trade shows are a good place to stay abreast of new ingredients. Natural Products Expo in Anaheim, Fancy Food Show in San Francisco, National IFT, and of course our regional suppliers’ nights are all good places. In my early days at Annie’s, we were trying to source an organic annatto extract to color our mac & cheese. Each year I would ask suppliers if they had a new organic annatto. I would spend more time with our current vendors to explain to them why it was important for our Annie’s consumer and to better understand what the technical hurdles were to get an organic extract. After about 2 years, one of our suppliers was successful and Annie’s was one of the first to use organic annatto in our products. Keep watch on your competitors; as consumers continue to ask for cleaner products, there will continue to be a lot of renovation going on The definition of Natural is nebulous and practically meaningless to consumers these days. But the regulations in the organic standards lay out a defined list of synthetic and non-synthetic ingredients that can be used in organic products. This list is one of my go-to places to check on an ingredient. Ingredients on the list go through a strict review process every 5 years, so if the ingredient is OK to use in organic, it is fairly safe to assume that it could be used in a clean-label, natural product.
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