Innovation Everywhere
No industry segment is immune from change
The produce industry has seen a revolution of change over the decades, from the introduction of ice packing produce for cross-country travel in the 1930s to the introduction of fresh-cut produce in the 1980s. Some innovation has been pressed on the industry by necessity and some by mandate, and over the next few years the fresh and fresh-cut industries will have to adapt to both.
Innovation was the focus of the Global Conference on Technology and Innovation, May 6 in New Orleans. Representatives of each market segment sat down with Tom Stenzel during the lunch session for a discussion on how they’ve adapted to change.
For each business, innovation was a necessity, either for gaining new business or finding profits in dealing with buyers.
“We have to find a way to move cost out of the equation,” said Michael Muzyk, president of Baldor Specialty Foods of Bronx, N.Y.
If you’re not moving forward, you’re moving backward, Muzyk said, and his company listens to employees to eliminate waste or improve operations. He has an open-door policy where any employee idea is listened to and researched, which has led to even minor changes that improve morale.
For large-scale foodservice buyers like Ed Thompson, the vice president of quality assurance for Avendra LLC, innovation is about working with suppliers to improve the supply chain and prepare for the future.
“We’ve go to know the suppliers’ capabilities,” Thompson said.
The retail market relies on innovation not only to attract customers in the stores, but also to attract buyers in corporate purchasing.
“Going to retailers with another ‘me-too’ product doesn’t get anyone excited,” said Paddy Callaghan, chairman of Nature’s Best in Ireland.
Innovation at retail can mean new packaging or a new marketing program, but it comes down to how to differentiate products from other brands or even competing products, said Dennis Christou, vice president of marketing for Del Monte Fresh Produce.
Del Monte has been an innovator in the vending marketing. The company took an existing market and products and mated them with the company’s distribution system. It hasn’t been an easy market to break into, but it has tremendous potential, Christou said.
“Innovation is not a static process. It’s a dynamic process and you have to continue to innovate,” he said. “We are not, at Del Monte, slaves to the process.”
The panel agreed that process innovation is important, especially for surviving a recession. At Baldor, Muzyk said the mechanics of the business have to be perfect, and he looks at where mistakes happen and how they can be corrected.
“I drill down to each one of those problems every single day,” he said.
At Nature’s Best, Callaghan said he’s been open with his employees and has let them help with solving problems. Everyone’s a part of the business, and the workers want it to succeed, too. Callaghan said he’s used the recession to improve the efficiency of the business, which is a difficult task considering the number of runs the plant has. Because Ireland has a population of less than 5 million and 80 percent of his business is private lable, Callaghan said there could be as many as 200 products packed in a typical day.
Innovation in process can be applied anywhere in the supply chain, even in the sales process. At Avendra, working with suppliers can improve the supply chain, but finding out what customers are looking for improves order fulfillment and keeps those customers happy, Thompson said.
“One of the things we learned is we really, really need to listen to customers,” he said.
Avendra, which distributes to national chains including Marriott and other hotel groups, developed a discovery process for potential customers. Three Avendra employees have full access to the customers’ business for three days to learn about their needs and how they operate. While there is often hesitancy on the part of customers to grant full access, Thompson said Avendra rarely loses potential customers after the discovery process.
Muzyk has taken innovative ideas he’s seen at suppliers and applied them to the Baldor sales department. One company he visited used different colored forms in the fax machine so sales orders would stand out and not get lost among other papers in the sales office. It was a low-tech solution that made sense, so Muzyk said he immediately returned to Baldor and ordered different colored paper not just for sales orders, but for other important paperwork.
Innovation in the fresh-cut produce industry is an ongoing process, and each member of the panel has learned about innovation through success and failures.
“You learn from failure, and the next time you do it better,” Christou said. “Learn from your failures, don’t make the same mistakes again and keep going.”
Ultimately, innovation should present value to the end user, whether at retail or to buyers along the supply chain. It’s not always the cheapest route, but it’s vital to increasing market access.
“Don’t let the cost side prevent you from addressing a need,” Christou said.
The needs of the end user have been changing. For many years, buyers wanted a long shelf life and minimized damage during transport, so hardy varieties that lacked color and flavor became the norm.
“Price and size took precedence over taste,” Muzyk said.
But now customers are looking for more flavor and color, so innovation can mean introducing new varieties and finding ways to maximize shelf life and minimize injury in the supply chain. As a former chef and someone that values flavor, Muzyk said he would be willing to pay more for a better eating product.
Innovation will continue to drive the fresh-cut segment, especially in emerging markets like snacking. Innovative marketing and packaging will help consumers think about fresh fruits and vegetables rather than salty or sweet snacks.
“There are enormous opportunities to market our products better,” Christou said.
