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Can you give me some information about product development?

Kettleby Foods are always seeking to meet the needs of its market. Is its market Tesco or the final consumer? The answer is a bit of both. Staff at the product development stage analyse sales trends of different products, listening to feedback from Tesco and also ensuring that they are keeping abreast of the changes in their market. This could be through a variety of sources - trade journals, market research reports, social trends, government statistics and so on.

The chefs employed by the business will be working on the plans and trials for new product ranges. The skill is in producing quality meals that consumers will want to buy, to be able to convince Tesco of the quality and viability of the product and to ensure that the combination of ingredients and the costs of production are such that the price it will be sold at will generate a profit for the business.

In some cases, Tesco will approach Kettleby Foods and tell them that they want a particular range of meals developing. It is then up to the chefs to come up with the right product to meet that need.

Image: The chefs have an important role in new product development. Reproduced by kind permission of Samworth Brothers.

The average time to develop a new product is around 3 months. A large number of factors will need to be considered in the process. Where will the raw materials/ingredients come from? Are the suppliers able to meet the demand necessary and will they be able to meet the quality standards across the range of the supply? Will the firm need to develop new production facilities, invest in new machinery, re-design the workspace, train staff and so on? All of these factors will incur costs and so this has to be built into the estimates of the likely profitability and success of the product.

The market tends to change quickly. All manner of problems can arise which will need to be addressed. The outbreak of foot and mouth, the BSE crisis, health issues relating to obesity, fat, sugars and salt in products, food labelling regulations and so on all mean that the business has to be flexible and able to cope with change and deal with problems as they arise.

National issues in the supply chain often involve a tightening of the specifications in the raw materials, for example, the foot and mouth disease meant that the meat suppliers to the business were restricted in the age of cattle they could slaughter for use in the food chain. This dramatically reduced the quantity of available supply and the forces of supply and demand increased the price. The power of negotiation changes in these situations where often the supplier will dictate the price for the available supply and it will be sold to the highest bidder. The impact of issues such as BSE and foot and mouth disease often leads to increased legislation and guidelines that remain in force for years after the problem goes away. For example, in 2004 products containing British beef can still not be exported to other countries in the EU and cattle over 3 years old cannot be slaughtered, this is as a result of the foot and mouth issues in 2001. The food industry have also experienced additional costs due to BSE where by-products that could previously be sold or utilised can no longer be used.

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