Innovation takes on a different meaning as pandemic forces CPGs to get creative | Food Dive

As the coronavirus spread throughout the U.S. in March, Conagra Brands faced a challenge: how does it sample new products set to launch in just a few months when the teams responsible for conducting the taste tests were sequestered at home and couldn’t safely gather together.

Prior to the outbreak, senior executives and members of Conagra’s research and development team would use kitchens at the company’s offices in Chicago and Omaha, Nebraska, to assess whether new foods tasted like they were designed to, if they were different enough from the competition and if they would be disruptive in a way that would generate meaningful sales when they hit shelves.

The coronavirus has disrupted nearly every facet of the food industry, forcing many companies in the space such as Conagra to find creative ways of doing even the most routine tasks such as innovation or risk losing market share and millions of dollars in sales to competitors who can. 

Permission granted by Conagra Brands

“We didn’t want the lockdown to stop us, to slow us down,” said Bob Nolan, senior vice president of demand sciences at Conagra. “If we lose three months, we’re going to be challenged to deliver the high standards we expect to our customers.”

Conagra’s R&D team quickly came up with the idea of sending home delivery kits each week with a common theme, such as baking with Duncan Hines, sampling frozen meals from Healthy Choice and Birds Eye or plant-based products centered around its Gardein line. The company found testing at home where employees could try the items with their families created a more real-world setting to how the foods would be used by the consumer later on, delivering more robust and useful information for the 101-year-old company.

In addition to taste, Conagra was able to evaluate how hard the package was to open, whether the ingredients cooked the way they were supposed to and if the instructions were easy to understand. Once the tasting teams have the opportunity to eventually meet again in person, Conagra plans to keep home testing as a regular part of its innovation practice, especially for items that are more complicated to prepare.

“We got this feedback we didn’t expect,” Nolan said. “It was a pleasant finding from the process.”     

‘Necessity breeds innovation’

The coronavirus caused food and beverage manufacturers to prioritize making products in high demand with shoppers and working closely with distributors and retailers to get them stocked on shelves. But while focusing their product mix and implementing steps to keep employees safe took up the lion’s share of their time during the height of the pandemic, analysts said CPGs had to be careful to not lose sight of the importance of innovation in laying the groundwork for future growth.

“Necessity breeds innovation and creativity, so in having to totally divert from what was being worked on, or to pivot and come up with new solutions for how people are engaging with food at home, is naturally going to encourage innovation and surprise companies, retailers and customers with what is possible,” Elly Truesdell, who worked at Whole Foods overseeing local brands and product innovations before leaving to become a partner at Almanac Insights.

Even before the pandemic, consumers were looking for products that were not only healthier and had a cleaner label but provided novel flavors. This provided an impetus for manufacturers of all sizes to double down on improving the nutritional content of their products and spending more on research and development to create new offerings. Shoppers also were more likely to purchase brands that valued issues such as sustainability and traceability.  

“It’s forcing everyone to be a bit more creative, a bit more practical in some cases, but often that demand on practicality or functionality is going to end up with some real innovative, creative results.”

Elly Truesdell

Partner, Almanac Insights

Truesdell said some big businesses have pulled back on innovation in these areas recently because of a renewed popularity among consumers for their iconic brands that have been on shelves for decades. For smaller businesses where cash is limited, they may see their money being better spent toward keeping the operation viable or meeting a sudden surge in product demand; innovation may no longer be a top priority. 

“Americans have already turned the corner in what they’re demanding and this will only solidify that as we emerge from COVID,” Truesdell said. Consumers are “wanting even more from the biggest companies” with innovation being “pretty critical to the ongoing success of these businesses, so it is a bit worrisome that they might be leaving it behind.”

Conagra Brands

The risk of not innovating during the coronavirus could also hurt the relationship food manufacturers have with retailers and individuals who ultimately decide which products make their way to grocers’ shelves and those that are taken off. Truesdell noted retailers want to see manufacturers are spending time and money developing new products and flavors that will keep their selections fresh and draw consumers into their stores.

“If someone just sat back on their heels and said ‘Oh wait, we put all of that on pause, we’ve got nothing for you,’ it actually gives a chance for another — whether it’s a smaller company or another big CPG player that has been pressing on and accelerating innovation — to get in there,” Truesdell said.

Balancing the present with the future

George Vindiola, vice president of research and development at Campbell Soup Company’s snacks division, said balancing short-term production and sales with long-term growth is a challenge for any company, particularly those mired in the uncertainty and complexity of the coronavirus.

“It’s definitely getting sales in the present and building for the future with innovation,” he said. “If you look at it from a purely efficiency standpoint that might not be the most efficient approach, but you do need to balance those future growth aspirations and that’s why Campbell has continued to innovate during this time.”

After a brief pause during the early phase of the coronavirus, Campbell decided to move forward rolling out its new Pepperidge Farm Farmhouse Honey White Bread and Farmhouse Butter Buns as retailers experienced a prolonged period of strong demand for bread products in their stores. With travel restrictions in place and many people working from home, the teams responsible for launching a product — research and development, marketing, qualityh assurance and supply chain teams — had to get creative. 

“Moving forward, because of the learnings from COVID, we’ll be able to have more R&D bandwidth, which translates into the ability to make more, and maybe more importantly, better food.” 

George Vindiola

 Vice president of research and development, Campbell Soup Company’s snacks division

Executives worked closer with bakers on bakery floors in Pennsylvania and Florida using FaceTime to help them virtually launch the recipes. During the initial product runs, the bakeries sent samples of the bread and buns to the homes of its R&D, sensory, and quality assurance teams so they could “tele-taste” and evaluate them from their own kitchens. The groups later huddled on a video call to discuss the appearance and taste of the breads while looking for anything that needed to be fixed.

Vindiola said the experience changed how the 151-year-old company goes about creating a product. Now, it leans more heavily on the wealth of knowledge within its bakeries and the operators who work with the products every day and are intimately familiar with how bread, soup or potato chips should look, taste and function. This essentially makes them an extension of the company’s R&D operations and reduces the need for executives in other parts of the country to travel to help with the product development. 

Permission granted by Campbell Soup

Planning also is underway to install permanent video cameras in plants and bakeries so people don’t have to hold their phone to allow someone else to look at a product. By doing more remotely and working closer with the employees at the plants, Campbell’s staff won’t have to devote as many resources to commercializing a new product. Vindiola said this will free up additional time and money that can be better spent developing products more quickly.  

“Moving forward, because of the learnings from COVID, we’ll be able to have more R&D bandwidth, which translates into the ability to make more, and maybe more importantly, better food,” he said.

Finding new ways to connect with consumers

The need to do things differently is even more important for smaller businesses. Increasingly, the home has been a saving grace. 

Rise Brewing used to distribute its nitro-infused cold brew coffee in offices and at events. Now, with those shuttered, scaled back or not taking place, it is targeting people who work at home by offering discounts to companies so their employees can have coffee shipped to their houses. 

After most office workers went remote, Stadium, a group lunch delivery service in New York City, saw its business grind to a halt. By May, the company pivoted, launching SnackMagic, a direct-to-consumer supplier of individual snack brands available to tens of millions of people across the country working from home. 

The closures of restaurants and other foodservice outlets also forced East Coast distributor Baldor Specialty Food to rethink its strategy. Previously, the company depended on these establishments for 90% of its revenue. Despite the shut downs, hospitals, retailers and some restaurants remained open, which meant Baldor’s 300 trucks were still on the road.

With products to sell, the 29-year-old company saw an untapped market for its fruits, cheeses, pastries and meats. Today, it is delivering crushed tomatoes, chicken and other products at a person’s home.

Direct-to-consumer “has been a big step for the company,” said Bill Hodge, general manager of Baldor Specialty Food in Washington, D.C., who uses the home delivery service himself. “When you’re in the middle of that change, it’s challenging and it took a lot of people to make it happen, but when you look back at it now and you realize the synergies that you have, it seems very logical.”

Permission granted by Alpha Foods

Early in the outbreak, Conagra noticed consumers were looking for recipes that helped boost their immune system and were high in vitamins.

Rather than create a TV ad that would take weeks to put together, the company’s e-commerce team tweaked how products were described so its Birds Eye offerings, for example, showed up on Amazon and other e-commerce sites when shoppers searched for these product attributes. Other products were connected with search terms and problems people were looking online to solve, such as “baking with kids” or “recipes using canned food.”

“If we can see those changes before other people see them, they’re an opportunity for our company,” Nolan said. “We thought the way for us was to connect to the problems. How do I make sure our food shows up when people have a real problem to solve?”

Alpha Foods CEO, Cole Orobetz, said the maker of plant-based burritos, nuggets, burgers and other frozen meal products stepped up its engagement with consumers through social media and instant messaging — a practice it has since made a permanent part of its business strategy as it continues to grow. 

Alpha also has hosted cooking recipe demonstrations online and conducted live Instagram takeovers where employees cook some of their favorite meals using the company’s products while fans of the brand share creations they have come up with in their own kitchens. The interaction allows Alpha to collect ideas it could use in future product innovation. Orobetz said flavor suggestions and additional plant-based chicken formats are being considered as new offerings as soon as this year.

“We want to make it a bigger component of our innovation process and product refinement,” Orobetz said. “Some of the stuff that comes back, I probably wouldn’t have thought about creating that in my own kitchen.”