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Friday, May 30, 2008

Food Innovation - New Tastes using Old Methods

Ever notice how long food ingredient lists have gotten over the past thirty or forty years?

Distribution and logistics hurdles used to require that food was a local and fresh affair. Then television and new distribution and logistics capabilities enabled the creation of regional and then national grocery chains. This encouraged companies to make one centralized product in quantity for national distribution. The national distribution system lengthened the amount of time that products might spend in retailers' supply chains, and ingredient lists began to lengthen as a result. To make matters worse, as automobiles enabled larger stores outside the city center with larger selections, floor space turned less frequently and retailers increased the pressure for longer shelf lives on top of the longer supply chain survival time. That is why you need a degree in chemistry today to decipher the average food item ingredients list.

So now that our food has a wicked shelf life but no natural taste without loads of sugar, salt, fat, and "flavor enhancers", has a market been created for a new breed of food "innovators"?

The answer is a resounding yes!

The Newman's Own Example

An excerpt from Shameless Exploitation in Pursuit of the Common Good: The Madcap Business Adventure by the Truly Oddest Couple):

"It was a recipe like nothing they had ever seen before, nor had anyone else in the spaghetti sauce business. When Ralph Cantisano saw the recipe, he had serious doubts that a sauce with fresh components and no preservatives would have the necessary shelf life, the same doubts that we had encountered with our dressing and that we would face with all our natural products, primarily because no one had ever bottled fresh stuff before without fixing it with chemical preservatives"

Newman's Own succeeded in finding a way to bottle both their salad dressing and their spaghetti sauce without chemical preservatives, and have gone on to donate more than $200 million to charities.

The Chocolate Milk Example

Look at the ingredient list for Darigold "Old-Fashioned" Chocolate Milk:

Milk, Sugar, Corn Syrup, Nonfat Milk, Whey, Cocoa Processed with Alkali, Mono-and Diglycerides, Cellulose Gum, Carrageenan, Guar Gum, Locust Bean Gum, Vitamin D3.

Organic Valley Chocolate Milk is not much better:

Organic Grade A Reduced Fat Milk, Organic Sugar, Organic Dutch Cocoa, Salt, Carrageenan, Vitamin A Palmitate, Vitamin D3.

And then look at the ingredient list of Wilcox Old Fashioned Chocolate Milk (from a local Washington dairy):

Grade A Milk, Cream, Sugar, Cocoa

If you haven't tasted Wilcox Old Fashioned Chocolate Milk or Marks & Spencer's chocolate milk in the U.K., trust me, they are pure chocolate bliss.

The Conclusion

With improvements in the supply chain, distribution efficiency, inventory management, and just in time delivery, food companies and food retailers now have the opportunity to shift food consumption in the United States in innovative new directions away from mile long supply chains and nitrogen ripening chambers.

Luckily, increased shipping costs are bound to force more companies to explore distributed production (ala Coca Cola and Anheuser Busch) to reduce costs. At the same time, the local food and slow food movements are picking up steam. If grocery stores also begin updating their supplier requirements and their stores, then we may see a perfect food storm deliver fresher, tastier food to our shelves soon with fewer preservatives.

Imagine a grocery store with more frequent, efficient re-stocking and a produce section carrying smaller quantities of each item (reducing waste) that reside in constantly weighed bins, matched against boxes in the warehouse and boxes scanned as they are emptied into display stock, giving the store and regional distributors a real-time produce inventory. This real-time produce inventory would allow the stores to carry fresher, and hopefully naturally ripened (and thus tastier) produce with reduced waste.

Now for the bad news. Wilcox Old Fashioned Chocolate Milk is no longer available because the dairy tried to compete on price in their unflavored milk business, started losing money, and sold their milk business off to a competitor. The competitor has chosen to expand distribution of their pre-existing artificial chocolate milk instead of expanding distribution of Wilcox Old Fashioned. Thus consciously choosing to eschew a market willing to pay a premium for a better tasting, natural product.

Imagine my shock and horror...

So, to satisfy my own sweet tooth and to help raise even more money for charities, I will be calling the guys at Newman's Own to pitch them on the idea of producing a fresh and natural chocolate milk on a national scale via a consistent recipe and local dairies for maximum freshness.

What are your "new" food innovation ideas?

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Friday, May 16, 2008

Announcing the Innovation Community

I am pleased to announce the launch of the new multi-author Innovation Community at http://innovationcommunity.ning.com

The Innovation Community provides:
  1. A forum for people interested in driving business results and discussing innovation topics

  2. Centralized access to the writings and videos of several visionaries:
    - Gary Hamel, Clayton Christensen, Geoffrey Moore, Michael Raynor, Braden Kelley, David Sable, Stephen Shapiro, and the minds of Ideo

  3. Access to content from London Business School's Management Innovation Lab

  4. A way for you to connect with other people interested in innovation

  5. A place for you to share innovation content that others might enjoy

I encourage you to check it out and help make it your own.

Join the conversation at http://innovationcommunity.ning.com.

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Wednesday, May 14, 2008

A Mobile Dining Innovation

skillet street food           VS.           taco truck

OK, there aren't too many food concepts that I would call innovative, but here is one:

It's a business that is starting up here in Seattle called Skillet Street Food.
It's concept is that it retrofits Airstreams into working, mobile kitchens that serve "evolved cuisine" during breakfast and lunch at locations that change day-to-day. But not day-to-day in the you never know where it will be next sense. They have a calendar and tend to show up at the same spots once per week.

Now I know you may be thinking to yourself, a mobile kitchen, what's new about that?

You may also be thinking to yourself, that sounds strikingly familiar. You might be thinking that sounds just like a taco truck, or roach coach as some would say, well except for the "evolved cuisine" bit.

So what's innovative about that?

Well, it's this:
  1. A taco truck has no story. Skillet Street is building its own myth, somewhat consciously, somewhat unconsciously (kind of like the Bacon Salt guys).

  2. Like the Bacon Salt guys, they seem to love bacon, having created an eBay store to sell their Bacon Jam along with t-shirts and the like.

  3. Whether they realize it or not, the genius in their implementation is that it crams most of the typical once a week customer revenue possible in a catchment area into a single day (times five locations), probably doubling the revenue they would earn from anchoring in a single location. At the same time they reduce burnout at each location - inspiring people instead to schedule the weekly visit in their calendar.

To see if there is there anything in this concept that you could adapt to your business, ask yourself questions like the following:

  1. Do you have a compelling and interesting story that would make people like your company?

  2. Are your products too available?

  3. Do you give your customers something to look forward to?

  4. What is your customer surprise and delight strategy?

  5. What unorthodox ways can you think of for getting your products/services to customers?

  6. Are there different customer "neighborhoods" you could make your products/services available to in order to increase its exposure (coffee by boat anyone)?

Check out the video below:

Innovative or not?

What do you think?

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Tuesday, May 06, 2008

Why MyStarbucksIdea is a Bad Idea

Today we will examine Starbucks' open innovation attempt - MyStarbucksIdea.

You may have come across it already, but it is worth examining because it represents one of the largest open innovation efforts to date, and it is the first I have seen built on a customized salesforce.com platform.

Some might say it is just a fancy suggestion box and not an open innovation effort, but it really depends on how you define open innovation.

MyStarbucksIdea.com is open innovation at work, not a mere suggestion box because a suggestion box is a black hole. People submit their suggestion and never know:
  1. If anybody even sees it
  2. What the reaction was to it
  3. What the outcome was
  4. What other people might think of the idea
  5. How other people might make the idea even better
Open innovation principles say that if a company allows people from outside the company to provide ideas that the innovation that comes as a result will be greater than if ideation is maintained as the sole domain of employees. MyStarbucksIdea.com embraces those principles and takes it one step further in that it allows a couple of key community features:
  1. Anyone can submit an idea
  2. Users can vote on different ideas to indicate the wisdom of the crowd
  3. Anyone can build a discussion around an idea by commenting on it
    • As a result their is an opportunity for ideas to be refined and become more compelling than first presented by the original submission
  4. Each registered user has an "inbox" that let's them see when someone responds to their submission
  5. Finally Starbucks pulls it all together with the "Ideas in Action" page to show what they are doing with the submissions
This kind of implementation has a few fatal flaws however:
  1. Competitors can benefit at the same time and possibly beat Starbucks to the punch if they respond faster
  2. Numerous duplicate submissions over time will make it difficult for users to build upon anything other than the newest or the most popular ideas (which will be difficult to measure given the duplicates)
  3. A lot of the obvious wins will be picked off within the first few months
So should Starbucks keep or ditch MyStarbucksIdea?

To answer that question I must answer it with another question. What is the purpose of innovation?

The purpose of innovation in the corporate world is to increase revenue and/or decrease costs, while also increasing competitive separation. Any other purpose has the potential to increase costs and possibly even to put you further behind your competition.

Innovation in the government or non-profit sectors can support the secondary purpose of facilitating knowledge sharing that the corporate world cannot support.

MyStarbucksIdea is a great implementation for a government or non-profit, but terrible for a corporation.

Here is what Starbucks should do:
  1. Starbucks should switch to a suggestion box format, with a closed community aspect to evolve ideas
    • Inviting people who submit similar suggestions to a closed forum to discuss their idea
    • Inviting top contributors or bloggers to iterate on an idea together privately
  2. Starbucks should throw out innovation challenges instead of hosting an open idea forum
  3. Starbucks should keep the IdeasInAction page to report back on implemented (and only implemented) suggestions and challenge results
  4. Starbucks should offer brand experience prizes (or possibly cash) at whatever level is necessary to encourage submissions and participation (which might be zero initially and escalate over time) while also building brand affinity
Congratulations, Starbucks, this a good first attempt.

However, it falls short of the kind of long-term improvement in innovation capability that ultimately results in a more profitable market leader - that's what we work with organizations to create.

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