Amanda shares how she started from scratch to create both an innovation program and a consumer insights department at AdvancePierre Foods. Her challenge was to build a methodical, repeatable process that included consumer insights at every step of the way while dealing with time, budget and risk constraints. She will describe the scrapes and bruises and more importantly the wins the company achieved along the away. Amanda will discuss the importance of creating a culture that fosters innovation and consumer insights and educating internal customers in order to successfully implement an innovation program. She will also talk about the criticalness of making certain that the new process builds value into each step from idea generation to launch into the marketplace.

1. Building a Fact Based,
Sustainable Innovation Program
…from Scratch
Amanda Smeller, Director of
Consumer Insights and Innovation
October 18, 2012
1

2. Agenda
The Set Up
Objectives of the Innovation Program
The Fun Part…Finding New Ideas
The Wrap Up

3. The Set Up
3

4. Who I am
Began career in Food Science at Abbott Labs
Moved into Market Research/Consumer Insights
Worked on client, supplier, and agency side of
business
In 2009, opportunity to join Pierre Foods

5. Painting the Picture

6. What Do All These Companies
Have in Common?
Epiphany #1: Not everyone felt we
needed CI or an Innovation Pipeline.

7. Four Distinct Business Units
Select Customers
National
National Accounts Accounts
Chain
Accounts
Foodservice Foodservice
Schools
Vend/C-Store Vending /
C-Stores
Retail
Brands
Club
Epiphany #2: Lots of channels…
lots to learn.

8. And Separate Locations
Portland, ME
Amherst, OH
Cincinnati, OH (HQ)
Enid, OK Claremont, NC
Easley, SC
Manufacturing – Fully Cooked
Manufacturing – Raw
Assembly/Bakery Facilities
Distribution
Epiphany #3: We are far, far apart!

9. Objectives of the
Innovation Program
9

10. Task at Hand
Create an ongoing, sustainable 3 year innovation
pipeline that:
 Maximizes resources
 Minimizes our go to market risks
 Sets us apart from like competitors
 Gives us enough ideas to both fail and win
Specific Company goals:
 Sales volume ($ & lb.) from qualified new products is 10%
Ideas that are new to:
 Line, channel, company, world
 Categorized as Line Extensions or Growth in our PPF system

11. Guardrails for Innovation Pipeline Ideas
Passes internal testing
Aligns with trends
Fits into multiple APF channels
Aligns with APF competency and strategy
Has good potential revenue

12. Concept Scores/Testing
Test among consumers and/or food service
operators
 Purchase Intent and Uniqueness
Develop hurdles
 Common sense and experience
 Seek out industry standards
Epiphany #4: Wait…does traditional
testing work for these channels?
Epiphany #5: Where am I going to
find ‘hurdles?’

13. Understanding Trends
Conduct trends analysis annually
Tap into secondary subscription services
Conduct project specific category analysis

14. Applicability to Various Channels
Ideas have to ‘fit’ into different formats that
are channel specific
 Retail versus foodservice
 Single serve versus mass feeding (QSR versus
college cafeteria)
 Operational footprint considerations
 Held frozen versus refrigerated versus warmer
Epiphany #6: It is REAL easy to get
bogged down in complexity.

15. APF Competency and Strategy
Epiphany #7: OK – What is APF’s
strategy again?
Align with competency and strategy
Bucket products into manageable categories
 Volume
 Size
 Gross margin
 Outside trends
Merge all systems to one sales reporting
system
Define ‘Pillar Categories’

16. Potential Revenue
Epiphany #8: Hmmm…?!?!?!
More familiar with retail models
Designed two algorithms –retail and
foodservice
 based on internal successes, like items, and test scores
Big opportunity to get better

17. The Fun Part…Finding New Ideas
17

18. Developed APF’s Consumer-Centric
Innovation Process
Idea Generation Concept Prototype
Initial
& Concept Screening & Development & Product Testing
Exploratory
Development Refinement Refinement
• Purchase analysis • Brainstorming • Internet studies • Sensory testing • Sensory testing
• Consumer needs • Preliminary market • Volumetric forecasting • Qualitative research • Qualitative research
assessment assessment • Qualitative research • Quantitative research • Quantitative research
• Trend analysis • Technical assessment • Quantitative research • Packaging research
• Segmentation • VOC research • SWOT analysis • Trade-Off analysis
• Ethnographic • Pricing research
discovery • Line optimization
• Technological • Claim research
assessment • In-Home use testing
Epiphany #9: Budget (none) and
timing (now) needs to be managed. 18

19. Part of Innovation Process
Idea Generation Concept Prototype
Initial
& Concept Screening & Development & Product Testing
Exploratory
Development Refinement Refinement
Fuzzy Front End of Idea Enters Formal
Innovation System
19

20. Sources for New Ideas
External
customers/
Idea Generation operators
Initial
& Concept
Exploratory
Development
Internal
Trends (Sales,
(Secondary) NPD,
Marketing)
New
Product
Concepts
Discovery
Suppliers Research
(Primary)
Epiphany #10: Respect how things
had been done and add on. 20

21. Initial Exploratory & Idea Generation:
Annual Innovation Calendar
Quarter 1 Quarter 2 Quarter 3 Quarter 4
‘Newidea@advancepierre’ mined on quarterly basis, innovation team review
Quarterly activities/contest among employees through portal
Oldies But Vendor Fair:
Goodies: leveraging their
Ideation with competency
internal legacy against macro
employees across trends
BUs/channels
Industrial/National Account specific ideation
Food Service Channel Discovery
Ongoing Trend Watching/Fast Followers in relevant categories
C-Store/Vend Low Hanging Fruit/Oldies But Goodies FS Channel
concept screen concept screen concept screen

22. Concept Development and Screening
Concept
Screening &
Refinement
Very high level – product statements
Two annual concept screens: 20-40 ideas
Team refines Innovation Pipeline
Innovation Pipeline Template per idea
Projects initiated into PPF system
Epiphany #11: An idea has to be
LOVED to live! 22

23. Example of Innovation Pipeline – Year 1
No Concept Year/ FS K-12 Retail C-S/ Oppty Dev
1st 2nd Vend $$$ Resources
1 Fully Cooked Philly Steak Breakaway 11/2nd X X X $$ BS/LG
Fully cooked, steak puck
2 Smart Picks 2nd Generation 11/2nd X X $$ TG/CD
New line-up of BFY items/whole grain
3 Grilled Dippers/Schools 11/2nd X $ TG/TS
Non-fried nuggets that have a dry rub
4 Flatbread Sandwiches 11/2nd X X X X $$$ BS/JN
Healthy, on the go alternatives to regular
sandwiches

24. Pipeline Concept Template:
Create a Template that includes:
 Revenue Potential
 Development Timeframe
 Manufacturability
 Fit with Strategy
 Background
 Consumer Testing
 Trends
 Competitive Set
 Proposed Pricing
 Next Steps

25. Concept A: FC Philly Steak Break Away
Channel/Revenue Potential
FS 250-1mm 1-5mm 5-10mm 10mm+
Schools 250-1mm 1-5mm 5-10mm 10mm+
Retail 250-1mm 1-5mm 5-10mm 10mm+
C-S/Vend 250-1mm 1-5mm 5-10mm 10mm+
Create a product that is wider/broader than a fully
cooked Philly Cheesesteak application (which is
Versatile steak like niche)
product to: Development Timeframe
 Use on a sandwich (steak & 6 mo or less 6-12 mo 12-18 mo 18-24 mo
egg, blue cheese & grilled
onion)
 Chop on the grill for Manufacturability
traditional Philly Low Modest Good Very high
 Rough chop with an Asian
sauce for stir fries Product Fit with Company Strategy
 Cook, season with. Low Modest Good Very high
vinaigrette, slice to top a
salad

26. Completing the Process
Prototype
Development & Product Testing
Refinement
Project in PPF system
 Resources are assigned
Project follows ‘typical’ project development
 Prototype development/testing
 Concept/product fit
 Variety development, etc.
Epiphany #12: Let ideas die if they
need too. 26

27. Measuring the ROI of an
Innovation Process
Remember Company goal:
 Sales volume (sales & lbs.) from qualified new
products (24 months or less in commercial
distribution) is 10%
PPF Quarterly Review reports on:
 Amount of projects
 Project types (extension, renovation, growth, ops)
 $mm in YTD invoiced revenue from new products
 Projects, $mm, and volume generated by product
pillar
 Project turn time
Epiphany #13: A great program must
rely on support systems.

28. Example: PPF Review Q2 2012
YTD Q2 2012 there were 139 projects in the PPF.
Most are line Extensions and Renovations.
12 Growth projects are active in the pipeline.

29. The Wrap Up
29

30. Program Success is Dependent on…
Goals
Benchmarks
Templates
 Reporting
 Pipeline
Developing/aligning other support systems
 Overall company strategy
 Sales reporting system
 Project Portfolio Forum (PPF)

31. Other Factors to Success
Just start
 All pieces will not be in place from Day 1
 Not all projects need to follow entire process
Program tone
Developing culture
“Stick to the original plan, but play it by ear.”
Casey Smeller
 Be malleable and learn from mistakes
Internal education
Sell, sell, sell – to your internal customers
Have fun and celebrate successes!

32. Examples of Recent Innovation