Open Innovation Programs Drive New Food CPG
Among the 11 Pre-Annual Meeting Short Courses held prior to the 2012 IFT Annual Meeting & Food Expo, a new course—Commercializing Innovation in Food Products (Monday, June 25)—offered attendees an inside look at commercializing innovation from ideation, sourcing, intellectual property considerations, valuation, and implementation to market launch.
The term “open innovation” is relatively new; in fact, it wasn’t officially coined until 2003 by Henry Chesbrough who got companies thinking about a new way of conducting the product development process. While Chesbrough firmly believed that companies have excellent internal resources—meaning the employees have a great deal of knowledge—he was also willing to admit that there are many smart people outside of company walls. Therefore, he believed it to be vital to seek out external experts to get insight on how to solve certain product development problems.
Since 2003, many large companies have implemented the open innovation process and have used it to successfully launch new cutting-edge products in the marketplace. For example, General Mills launched the General Mills Worldwide Innovation Network (G-WIN) in 2010 to actively seek partners that can help the company deliver breakthrough innovation in categories such as packaging, technologies, and ingredients.
As Alfred Malouf, NineSigma, explained in the opening presentation to the Short Course, there are many advantages to utilizing open innovation for product development. “People can have preconceived notions about how something should be done, but maybe there is someone out there who has a better idea that may be simpler, costs less, and is easier to develop,” said Malouf. In addition, this can help save time that would be lost “reinventing the wheel” and accelerate the innovation process.
However, in order to be successful, an open innovation program has to be integrated and sustained across the value chain. “It is vital to get all the stakeholders along the value chain involved in the beginning,” said Malouf. Another mistake some companies make is that they use the open innovation program solely for large projects. Malouf believes it should be used for smaller, incremental projects as well.
To give the short course attendees an example of open innovation at work, Malouf offered a case study of how NineSigma helped Kraft solve a packaging problem. As an open innovation service provider, NineSigma works as an intermediary between a client and solution providers. In this case, Kraft’s consumer research showed that while consumers love Ritz Chips, they aren’t fans of the re-sealable bag. NineSigma sought out solution providers and came back with nine proposals. One was from Biomimetics, which uses nature to solve human problems. In this case, they looked at how nature would repeatedly open and seal items. Kraft ended up contracting with Biomimetics to develop a biology report on closures used in nature.
At that point, Kraft was still faced with the challenge of how to take these solutions found in nature and apply them to packaging. So they reached out to Michigan State Univ.’s Packaging and Engineering School and created a student competition to develop a solution to the Ritz Chip packaging problem using one of the methods described in the Biomimetics report. The winning team’s concept is currently patent pending and will be on store shelves soon.
Malouf ended his presentation by reminding attendees that open innovation—in fact, any kind of innovation—is hard work and requires persistence. As illustrated by the Kraft case study, it is often the nontraditional paths that lead to some of the most exciting new technologies and products.