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5 Hottest Food Trends at Expo West |

We were delighted to appear in The Ohio State University’s Food Innovation Center Blog:

Expo West

Natural Products Expo West 2014 was an incredible show of natural, organic, and healthy food and beverage manufacturing, ingredients, and in many ways – the future of the food industry, given that healthier food has moved from trend to societal shift. The natural, organic and healthy products food industry is growing nearly three times higher than the food industry average, per Penton. I had the privilege of attending with 67,000 of my closest friends and 2,600 exhibitors. Expo West was an enlightening window to emerging food industry trends.

 1. Gluten-free continues to explode, up 20% versus last year, driven by perceived health benefits and better diagnosing of celiac disease. New brands, new food categories, and Gluten-freeimproved organoleptics were virtually everywhere. Per NPD, 30% of consumers want to reduce the amount of gluten they are eating, and gluten-free foods’ household penetration has leaped to 11%, more than doubling since 2010, per Nielsen. The tidal wave is projected to continue as the foodservice sector (restaurants and institutions) catches up with consumer demand at retail. Even Pillsbury has jumped into the space with gluten-free dough (et tu, Doughboy?) as has Columbus’ Donato’s with its gluten-free Donato’s and Sonoma Flatbreads brands. Gluten-free is projected to grow by 22% annually through 2016, per Mintel.

2.  Non-GMO (genetically modified organisms) verified food offerings have tripled since last year, in response to growing consumer demand, as well as organic manufacturers’  non-gmo efforts. Regardless of where you stand on the contentious GMO discussion, consumers are responding. 93% of Americans said that foods that have been genetically modified or engineered should be identified, per a recent New York Times poll and non-GMO has recently surpassed ‘organic’ among consumers’ desired food claims. Whole Foods’ requirement of GMO labeling on all products in U.S. and Canada by 2018, will also drive non-GMO consumer awareness. Promising, except only 11% of consumers say they are willing to pay more.

Non-GMO food and beverages are projected to grow at a 13% compound annual growth rate for the next few years and account for 30% of retail sales by 2017, even without mandatory labeling, per Packaged Facts. General Mills, Smart Balance, Ben and Jerry’s, Chipotle, and Kashi have all taken proactive stances on GMOs by either eliminating them or pushing for increased labeling. To help manufacturers and consumers with product and ingredient sourcing, the verification body, the Non-GMO Project has established a centralized database. Buckeye brag: Marzetti launched Mamma Bella GMO free garlic breads, led by Fisher alum Adam Koenigsberg.

3. Proteins, Popcorn, Chia and Kale were prevalent in multiple categories. New protein-rich or enhanced products targeted to consumers who are reducing or eliminating red Popcorn Indiana brand(or all) meat from their diets included yogurts (whey and soy proteins), snack bars (almond and pea protein isolate), and pancakes (oats, quinoa, and whey). Popcorn, with its better-for-you consumer perception, was featured by over 25 companies in every mainstream and exotic flavor. Most intriguing were Popcorn Indiana’s fit brand, positioned as a low-calorie option, and chip’ins, a popcorn-based extruded snack chip. Chia continues to be a hot omega-3 rich and filling superfood in many bars, yogurts, drinks, as well as seeds alone. And kale, which has grown four-fold since 2008, is the hot supergreen in raw snacks, chips, sauces, dressings, and disturbingly: macaroons.

4. More Funding, Investments and Acquisitions – The health and wellness segment’s rapid growth is attracting interest and investment from multiple sources. Major food Food_Acquisitionscompanies are penetrating the segment via acquisition and joint ventures, such as Coca-Cola (Zico and Honest Tea). Heinz (Hain Celestial), and Campbell Soup (Plum Organics), and the sector has become a darling of private equity leaders such as Sherbrooke Capital (Angie’s Popcorn) and Alliance Consumer Growth (EVOL brand). There is also an explosion of funding available for smaller companies through food incubators and crowd-funding platforms, with over 25 new food and agriculture funding sources launched last year. This foretells both continued growth among increasingly well-capitalized companies, as well as improved product quality and rate of innovation.

5.  Local Participation –  Ohio was well represented by many of our friends at 19 companies. In addition to the aforementioned Marzetti and Donato’s, Almondina, Avitae, Bunker Ohio StateHill Cheese (Heini’s), Eurochoc Americas Corp., Fit Organic, Fremont Authentic Brands, Garden of Flavor, Gaslamp Popcorn (Rudolph Foods), Graeter’s, Herbal Science, Jeni’s Splendid Ice Creams, 1-2-3 Gluten Free, R.A.W. Real and Wonderful, Swurves (Mike-Sells), Trophy Nut, Unistraw, and Wyandot Snacks exhibited, all of whom we expect are gearing up for the surge in new business… and hiring talented Buckeyes.”

Meet the Expert

Tammy Katz is an Adjunct Professor of Brand Management at the Fisher College of Business, The Ohio State University, and Chief Executive Officer of Katz Marketing Solutions, a marketing and brand management consulting firm. She is particularly interested in brand management, marketing strategy, commercialization, corporate outreach, and consumer-driven innovation.

Marketing Innovation: How to be among the Successful 5%

Marketing innovation is a key source of revenue and profit growth, as well as a great opportunity to strengthen your brand and competitive advantage. Most companies’ annual plans rely on marketing innovation. According to Ernst & Young and BASES, only 5% of U.S. new products are successful. These are the seven Best Practices, including the avoidable common mistakes, among successful innovation companies:

1. Set Innovation Goals and Accountability – This is a simple idea, but it is often overlooked. Successful innovators consistently set clear innovation goals, specifically:

• Sales, profit, and payback goals for the entire Innovation effort (all products and services), typically for a one-year or five-year timeframe and
• Sales, profit and payback hurdles for each project to merit consideration
• Both Marketing and Product Development have inter-dependent accountability for delivering these goals

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2. Demonstrate project viability before committing resources – Each potential new product should have demonstrable financial viability and market need before resources are allocated. This simple step is skipped with alarming consistency and is a major cause of downstream profitability problems and innovation failures. Answer these two questions at the Idea stage:
• Is the product financially viable? Insist on reviewing crude Year 1 and Ongoing (typically Year 3) Profit & Loss statements on each proposed project. This demonstrates whether the project is financially worthy of being considered, needs rework, or should be thrown out. The Year 1 P&L is important to understand the potential investment issues. The Ongoing P&L illustrates the ongoing business model.
• Is there a true consumer unmet need for the product? You must be able to answer: 1) who is the target; 2) what is the relevant consumer benefit? (Note that it must be an important, motivating benefit to consumers, not a “nice to have,’ lower value benefit) 3) how is it superior to competition? When you launch a new product or service, you are betting that consumers will change their existing purchasing behaviors and choose you. You must be superior to their current options and solve issues they care about. Be sure. Ask your target market.

2. Leverage True Core Competencies – The most successful innovators exploit what they can and do best. They wisely avoid areas where they lag competitors. Innovation winners have a deeper self-knowledge of core competencies than the superficial “leader in X industry.” The Management Team has rigorously evaluated and determined their best internal processes, to find what they do, or realistically can do, better than their competitors. For example, Frito-Lay fully understands and leverages its store-door delivery, manufacturing, and snack innovation core competencies. Conversely, even uber-performer Frito-Lay has made the costly error of presuming snack food brilliance would translate to success in the very different cookie industry. Play from strength. Know and stick to your core competencies.

3. Drive Collaboration to Optimize Outcomes – Extraordinary innovation results consistently occur when R&D, Marketing and Operations collaborate and continue to improve the idea throughout its evolution. Continue reading

The Chobani brand Yogurt Coup: Reinvent the Category

We applaud Chobani‘s explosion to +$900 million in annual sales since its 2007 startup by attacking the yogurt category with a truly differentiated and superior brand.    Not only have they catapulted to stardom, they’ve even beat the brilliant, entrenched competitors, like Yoplait (General Mills) and Dannon.    They’re among the elite brands, like WhiteStrips, Swiffer, Apple, and Dyson who invent and dominate new category segments by reinventing their category.   

First, Chobani designed a much better product.    Their CEO and founder, Hamdi Ulukaya, thought American yogurt was horrible and developed a premium, Greek-style yogurt, which is thicker, creamier, more protein, less sweet, and has a healthier perception.   They challenged many of the conventional approaches of what product design seemed to drive the category.

They also rethought pricing and price/value.   Continue reading

7 Musts for Profitable New Products

1. Delight your target consumer
DO focus on creating items that truly solve your target consumer’s needs and points-of-pain
DO meet and exceed their needs
DO create fans, not just customers
DON’T focus on internal issues
Can you precisely define your target market and what motivates them?
√ Does 50% of your target audience say they definitely or probably would buy your product?

2. Make sure it’s profitable early
DO screen ideas for profit potential at the idea stage
DO rework ideas early to address any profitability issues
Continue reading

5 Ways to Ignite Brand Innovation

Only 10 percent of new products launched in the United States are successful, according to Ernst & Young. This 90 percent failure rate for new products is tragic and avoidable. Leading innovators could consistently and successfully launch new products, simply through better planning and execution. The failure rate of new products doesn’t have to be so high, and the number of people and companies launching successful new products can be greater. Here are five Best Practices for innovation and launch of new products:

1. Set priorities and expectations: Innovation is more successful when it is established as a corporate priority. Senior management must set and broadly communicate clear and consistent innovation goals within the corporate strategy. Goals must be measurable and have clear accountability: Sales, profit and payback goals for the entire innovation effort (all products and services), typically for a one-year or five-year timeframe. Both marketing and research and development have interdependent accountability to deliver these goals. This step alone can address the paralyzing chasm between most marketing and R&D teams. Continue reading

Off! brand: Innovation by Nailing Nuisances

Off! brand solved one of consumers’ biggest problems with their category… and their new product is flying off the shelf. Here’s a great example of a company that sufficiently clipOnunderstands its category and consumers and use that knowledge to drive breakthrough innovation. They solved one of consumers’ biggest concerns about insect repellents – the inconvenience and fear of applying it to your skin – with the Off! Clip-On and early sales results are exceptional. According to Ad Age, the Off fan has exceeded S.C. Johnson‘s initial sales expectations by 400%, sold $4.2 million in its first month, and retailers’ sole problem with the item is keeping it in stock. And at a premium price of over $10! Continue reading

Target Triumphs with Consistent Marketing Communication

A staggering 96% of Americans recognize Target Corporation‘s bullseye, putting the brand in the brand awareness stratosphere with the likes of Nike and Coca-Cola.target2

This exceptional brand awareness is a direct result of their consistent communication. While most chief marketers continue to cite Integrated Marketing Communication as their biggest challenge, according to the Association of National Advertisers, Target masters it. Continue reading

Exceptional Brands: Wii Nails Consumer Needs

wiiIn a pretty sober selling season,  Nintendo Wii sales are still on fire – up 100% versus last year in November.   December should be even better, as Wii is on Santa’s short list in so many homes.    Here’s a truly exceptional brand on so many levels.   First, by adding a mobile dimension to gaming, it truly is different, superior, and preferred.   Second, the product concept is clear – even the youngest of children can grasp the simple idea in a moment.   Third, the product truly delights the consumer – not only does the user get the fun and enjoyment they expect, but a higher level of fun and enjoyment well beyond those expectations.  Fourth, the new product innovations – Wii Music, Super Mario, and Wii Fit are all brilliant, appealing ways to extend the brand franchise. Continue reading

Brand Obama: Spectacular Brand Positioning

obama

You have to applaud to the spectacular marketing of Brand Obama. Recently, Advertising Age named him Marketer of the Year for 2008, edging out Apple and Zappos.com at the Association of National Advertisers‘ annual conference. Sure, Brand Obama rose from nearly an unknown to a preferred brand in very short time and harnessed social networking, but the real greatness was in the positioning. Obama provided a very clear benefit (change) to his target audience (disgruntled Americans); the messaging was clear and consistent. The brand connected grabbed #1 market share with its functional benefits (tangible, performance benefits – the promises of financial benefits to the middle class). But the real coup was Obama brand’s emotional benefits: hope and optimism, which resonated deeply with the consumer. Continue reading