From The Corners of the World (FCW) is reaching its conclusion in its current form. With this last column, the parting shot is an examination of the key elements that lead to product development success or failure. FCW interviewed industry leaders in ingredients, consumer products and media/market analysis sectors of the industry to glean some insight into the habits and elements that lead to successful product development.
Interviews were conducted by phone and/or email with the following people:
Carsten Smidt, PhD, vice president of Research & Development, USANA Health Sciences: Dr. Smidt has been involved with several important supplement launches, especially in the multi-vitamin area. Among his successes are LifePak and BioPhotonic Scanner while at Pharmanex, Vitalizer line of products at Shaklee, and recently he joined USANA, makers of the line of personalized nutrition products called My HealthPak.
Jeff Wuagneux, president & CEO, RFI LLC: Mr. Wuagneux led the team involved in the development of the OxyPhyte antioxidant product line, as well as helping to position ORAC and antioxidants in ways the industry and consumers could understand. RFI also successfully introduced Chocamine, a proprietary cocoa extract.
James Roufs, MS, RD, CEO, Intelligent Nutrition LLC: While at Nutrilite, Mr. Roufs worked on very high profile product launches like Concentrated Fruits and Vegetables and Carb Blocker 2, both of which received patents. He is also working on an exciting new technology we can all look forward to learning about soon.
Peter Andersen, CEO, Centroflora Group (Brazil): Centroflora is a leader in the development of botanical extract ingredients for use in branded pharmaceuticals, food and cosmetics.
Grant Washington-Smith, president, Roseville Consulting (New Zealand) and co-author of this column: He was an early pioneer in natural and functional confectionery products as well as the launch of a branded cosmetic ingredient from keratin.
Key Elements of Success
While there is no one formula for success, there are some important habits and elements employed by successful product developers. The people interviewed referred, in one way or another, to the following elements: Science, Listen to Your Customer, Assemble the Team—Follow a Plan, Pay Attention to Market Trends, Learn from Mistakes—Be Persistent; and Finances—Costs and Capital.
Successful product development begins with science. All the people interviewed discussed the importance of science, including clinical work and development of intellectual property (IP) as a major tool for success in product development. There are a great many opportunities for the development of novel nutraceuticals and functional foods, and much of the opportunity is predicated on the ability to convey a claim benefit to consumers. These claims have become a great deal more scrutinized by regulatory authorities. This means product developers need to spend more attention and resources on the development of claims that are meaningful to consumers and meet regulatory requirements—all of which require science.
Dr. Smidt described “testing products,” a process that involves researching the products, conducting clinical studies, or if clinical studies are out of the question, to ensure the ingredients are substantiated with significant science. Good science creates one of the major points of product differentiation, and can also help companies mitigate the risks of product development. Mr. Roufs put science, specifically clinical research, as the first key element on his list, stating that good science makes introducing new products much easier.
Listen to Your Customer
The old saying “the customer is always right” is true. Whether the customer is a manufacturer or a consumer, the desires and needs of the customer must be at the head of any successful product development. Every respondent emphasized communication with customer as a key to success. “We have become extraordinarily customer driven in our product development and partner with our customers on every facet of the development process,” noted Mr. Wuagneux.
Mr. Andersen talked about “briefing” his customers and outlining all the requirements of the project. He added, “Do not develop your products from ‘bench to market,’ and instead develop your products from ‘market to bench.’”
Mr. Washington-Smith takes a slightly different approach called Minimum Viable Product (MVP), where developers bring products to market as quickly as possible and then continue to work closely with the customer in fashioning the evolution of the product. He believes success comes from customer interaction and feedback and that product development is incremental. “The development phase continues well after launch of a product or ingredient.”
The Importance of Team & Planning
Without good people, there is no success. Regardless of size, companies should assemble a product development team that involves all the stakeholders. Not all these stakeholders need be employees, nor do the teams have to be large, but assembling a team is important, as successful product development is complex and involves many layers of knowledge. Typically, the stakeholders represent skill areas such as research and development (and all the technical categories within R&D), product marketing and sales, operations, regulatory and intellectual property, finance and quality control/assurance.
Another key stakeholder is the project manager. “Hire folks who have experience in new product development,” said Dr. Smidt. “Ensure they are able to navigate through the entire product development process, and involve all stakeholders.”
He added that developing a formal product development plan is important as well. Some smaller companies may feel like they don’t need the formal process, but this behavior leads to a much higher risk of failure.
Successful product developers definitely listen to their customers, but they also follow developing industry trends, as well as analyze market data. There are a variety of tools and services available to product developers. One example of timely market data and analysis is the recently published “NBJ/Engredea Monograph—Ingredient Market Forecast 2012-13.” The report analyzes industry macro-trends and offers significant insight for product developers. The report points to five important health conditions that pose the greatest challenges and opportunities for product developers: Healthy Aging, Energy, Diabesity (the combined diabetes, obesity and metabolic disorder), Cognitive & Mood and Inflammation.
According to Francine Schoenwetter, dngagement director at Engredea, there are two strata of market metrics, and both impact product development and marketing. First, there is media produced market data. Like the report mentioned earlier, this information tends to be high level macro-trend data utilized to assess trends and opportunities. The second type is syndicated data, which comes from data aggregators like Nielson, IRI and SPINS. Syndicated data is usually highly detailed and specific to product sales in specific categories and channels.
Media data report the past, but glean great insight into where the “next big thing” may be. Innovation, however, often involves anticipating a trend, and successful product developers will look at trends and make educated guesses on what trends may follow.
As Mr. Wuagneux stated, “If we only looked at current trends, we would probably be competing in more saturated markets, and miss some important opportunities for innovation. Sometimes we need to look beyond the trends.” Dr. Smidt added, “market research tells us what the consumer already knows or does. Sometimes we need to educate the consumer. This entails risk, but risks need to be taken. Good market research and science help to mitigate this risk.”
Learn from Mistakes, Be Persistent
Mistakes are an essential part of life. The path to success is most often filled with mistakes. Those mistakes lead to greater understanding and insight. Mr. Roufs noted, “The more innovative one is, the greater the chance for failure, because one is doing something that no one has done before.”
He talked about a willingness to make mistakes, as opposed to avoiding them. This is a novel concept. The idea is not to intentionally make mistakes, but instead to clear the path to successful development by removing the fear of making a mistake. This freedom to operate leads to innovation.
“One would not be working properly if the failures didn’t outnumber the successes,” added Mr. Washington-Smith. “The important thing for me is to know when to kill a project.” In essence, learning from the mistakes leads to success. If one learns from mistakes and persists, success will soon follow.
Finances—Costs and Capital
Product developers agreed that well-funded product development and R&D groups have a greater advantage, however, funding does not make the product successful. Great ideas just as often as not come from “boot strap” operations that have been able to leverage some market insight into a successful product. Quality science and some of the other elements of product development can be expensive, alongside costs of product launches. Planning a project and formulating a budget certainly help. If one looks at product development incrementally, a product can be launched at relatively low cost and further developed while in market.
Product developers are concerned with costs of the product. Great research and product development may lead to wonderful products, but if the price is out of line with the market, the chances for success are low. Product developers must keep an eye on costs and make sure they can price the product accordingly.
Advice to Product Developers
Each of our leaders had insightful advice for product developers:
Dr. Smidt described a culture of focus, perseverance and a “can do” ethic that leads to success. “Develop profound claims that mean something to the consumer,” he stressed. He also suggested keeping an eye on evolving technologies, including technologies that are interactive with the consumer, like computer and tablet based apps. He feels, especially in his area of personalized nutrition, that interaction with the consumer is the key to success.
Mr. Wuagneux stressed partnering with the customer to develop products. He also believes there is a convergence between the food and supplement industries and that there will be a big push to make supplements more like foods. For this reason, product developers would also be wise to take into consideration attributes like flavor and aroma in developing products, to go along with nutrition and health benefits.
Mr. Roufs outlined a list of “intangibles” as keys to product development success. These include: learning from mistakes, being persistent and thinking outside the box. He also described an attitude of joy and gratitude as essential for success. Most successful product developers are extraordinarily passionate about their work and express this kind of attitude.
Mr. Andersen also stressed spending time with the client, studying the project and looking for as many answers as possible in advance. He also advised “forward thinking” and attempting to anticipate and mitigate problems. Project planning is critical to the success of any project.
Mr. Washington-Smith emphasized strength of science as vital for the long-term strength of a brand. Science brings credibility and brand integrity as well as helps to mitigate potential threats (legal, regulatory) to the product. Finally, he also stressed the importance of incremental development. Product development does not end with the launch of a product; rather it is a continual process.
Editor’s Note: The authors wish to express their sincere appreciation to all those who contributed to this article. NW offers the same gratitude to Paul and Grant for all their work over the years.
Paul Altaffer is on the product and business development team at RFI Ingredients, Blauvelt, NY, a manufacturer of innovative natural ingredients and custom formulations for the functional food and dietary supplement industries. He was previously the founder and president of Nat-Trop, an ingredient company now operated by RFI that develops and trades primarily in South American products. He can be reached at 510-337-0300; E-mail: email@example.com.
Grant Washington-Smith has over 17 years of experience across a variety of businesses in the natural products industry. He previously worked in business development and brand management for Alticor Inc. Prior to arriving in the U.S., Grant was involved in marketing and business development throughout New Zealand, Australia and the Asia/Pacific region. His focus has been on the commercial development of the novel and the innovative. He can be reached at firstname.lastname@example.org.