********************A product's success largely depends on being delicious—this has never changed and cannot change. The rapid development of information and data has had a huge impact on the FMCG industry. Consumer needs are constantly changing, and FMCG companies need to shorten R&D cycles to keep up with consumers' increasingly segmented and diverse demands. New product development must be based on deeper consumer insights, and traditional product research methods may no longer provide clear direction for product development and promotion. This article from Fooddive.com uses three well-known FMCG companies—Conagra, Mars Wrigley, and Ferrara—as examples to illustrate how FMCG companies are changing their product research methods in the data age to develop products that are more popular with consumers. We hope this provides some inspiration for corporate product development and marketing strategy departments, especially product managers. The following is a full translation: FMCG companies are under immense pressure from the data and technology era, facing both the need to shorten new product development cycles and increasing costs. Traditional food companies like Conagra (the second-largest food company in the U.S.), Mars Wrigley, and Ferrara (a well-known U.S. candy company acquired by Ferrero) are rethinking the product development models they have used for decades. **-01- **Conagra: Breaking Traditional Research Undoubtedly, Conagra's once-classic frozen products are gradually falling out of favor. In the words of CEO Sean Connolly, these products are "stuck in the past." Although products in this line, such as Healthy Choice (a heart-healthy frozen product) and Banquet (a $2 frozen product known for turkey, gravy, and steak flavors), still generate revenue, their appearance has barely changed in decades, leading consumers to switch to trendier flavors and healthier options, while sales of these Conagra products have plummeted. Executives have realized that decades of research investment in developing and testing products have not translated into sales performance. Simply introducing new flavors or running ads can no longer attract consumers. If Conagra maintains the status quo, this FMCG giant's sales will decline further and may even fall behind competitors. Bob Nolan, Conagra's vice president of marketing, told us: "I always felt that our product research was about gaining consumer insights, but it wasn't working well. We asked consumers what they wanted, developed products accordingly, but found they didn't sell. Why is that? Can we find another way to solve this problem?" Nolan and other Conagra executives ultimately decided to abandon traditional product research and market research in favor of purchasing big data on consumer behavior. They believe this data can better predict whether a final product will succeed than consumer feedback provided in artificial settings. Compared to three years ago, Conagra now spends $15 million less on product research, with most of the funds redirected to purchasing data, including data on food service, natural products, household consumption, grocery retail, and loyalty card purchases. When Nolan started at Conagra in 2012, about 90% of the company's product research budget was spent on traditional testing, such as testing product potential, ad testing, or marketing campaign testing. Now, spending on such traditional research has been cut to zero. While most food and beverage companies haven't completely overhauled their product research methods like Conagra, the entire FMCG industry is adjusting its product research processes. Data is now easier to obtain than ever, so companies can solve problems that previously required high budgets or long timelines by changing their research methods. For example, they can use video and smartphones to quickly engage consumers or directly observe how consumers react to product prototypes in real-life settings, such as at home. Competition among food manufacturers is intensifying to meet consumers' ever-changing demands for taste and experience. Changing product research methods can undoubtedly increase the chances of product success and avoid becoming one of the tens of thousands of failed products each year. For Conagra, this new approach is already showing results. The company's Healthy Choice line, inspired by Korean cuisine, particularly the Beef Power Bowl, is a successful example. By analyzing data from natural food channels and specialty stores (such as Whole Foods and Sprouts Farmers Market), this FMCG giant discovered that people prefer eating from bowls rather than trays. Meanwhile, information gathered from restaurant outlets showed that Korean cuisine is one of the fastest-growing food trends. The data also revealed the most popular flavors in Korean cuisine. Nolan said that without this data, Conagra would have found it hard to believe such products could succeed, and executives might have preferred to focus on flavors they were already familiar with. Following that, Conagra refreshed the Healthy Choice brand image, adding clear labels indicating modern recipes with no artificial ingredients, and applied these to innovative products like Power Bowl. The company says this brand refresh has revitalized the 34-year-old brand, which had seen sales decline by 10% for a decade but has grown by 20% over the past three years. Conagra continues to innovate with its other frozen food brands, including Banquet and Marie Callender's, achieving similar success. For a company with annual frozen food sales of $5.1 billion, this segment is a key barometer of Conagra's success. **-02- **Big Data Analysis vs. Traditional Research For years, most food companies generated new product ideas based on data results from market research. This research method dates back to the 1950s, when executives gathered in conference rooms to discuss brand development. They would develop product prototypes, test them, then narrow down and test a subset to find what resonated most with consumers. The data relied upon was often generated through surveys or focus groups, which would determine the fate of new product ideas. "This is a long-standing industry where innovation is often talked about but rarely practiced. But now FMCG companies are under immense pressure to innovate quickly and bring products to market. I'm genuinely concerned about those who can't keep up with innovation in both thinking and action... The result could be a tarnished brand reputation and declining sales," said Sean Bisceglia, CEO of product data research platform Curion. Almost all relevant information about consumer shopping habits and preferences is now readily available. There is also data on consumption frequency and location. Tens of thousands of loyalty card records can show which products people bought at which stores, even at which checkout counter. While data can show how products are sold from a broader perspective, FMCG companies can also delve into finer details, quantifying the growth of non-GMO or organic food consumption, or even the market performance of specific ingredients like turmeric. Research consulting firms like Nielsen and Mintel collect vast amounts of valuable data, including when people eat, how they eat, how much time they spend eating, and even how they cook, such as using microwaves, ovens, or blenders. According to Bisceglia, to help clients get faster results at lower costs, Curion has built a platform where new products can be randomly sampled without traditional market research, or targeted to specific demographics, such as full-time mothers in their 30s with two children. Within days, results can be obtained for a few thousand dollars, compared to complex, lengthy research processes that could take months and cost hundreds of thousands of dollars. Over the past decade, Curion's platform has surveyed about 8,000 products among 700,000 people and is currently building a database that could allow some companies to skip research for certain products. For example, a company producing mango yogurt could initially use data collected by research firms or other companies to understand the category's performance nationally and regionally. Then, as product development becomes more refined, the company could use Curion's database to understand how mango yogurt performs across different age groups, income levels, and ethnicities, and even consumer acceptance of specific formulations and intensities of mango flavor. Lori Rothman runs her own consulting firm advising companies on product research. For most of the past 30 years, she worked at companies like Kraft and Kellogg's to determine the most effective product research methods and design corresponding experiments. She said that in the past, she would spend days or weeks studying data and consumer feedback before devising the best plan. In today's market, sometimes there is a need to deliver solutions within a day or even immediately, with some companies reacting as soon as they receive information. Rothman considers this practice dangerous because the volume of data is increasing, and the inherent complexity of the data is very difficult to understand. "Data volume is increasing. And it will only grow. We must better understand how to handle it, how to apply it, and what truly matters. How can we truly predict whether someone will buy a product and whether they will repurchase? You must know the ultimate return on all data. You just need to identify the key data you need, and if possible, stop collecting all other auxiliary materials," Rothman said. **-03- **Ferrara: Conducting Research In-House As the producer of Sweetarts, Nerds, and Brach, Ferrara Candy, under Ferrero, generates over 100 new product ideas annually, but on average only 5 products reach the market. To find truly worthwhile new products among these ideas, the candy company conducts a series of market research among consumers, and almost all of it no longer uses traditional focus groups or face-to-face interviews. Daniel Hunter, Ferrara's head of market analysis, told us that unlike ten years ago when they partnered with external companies for market research, now we conduct most of the research ourselves. In the past, the company might spend $20,000 on a large research project. They would pay a market research firm to write a set of consumer questions, then refine, survey, and analyze the collected information. Hunter said that now Ferrara's product development team, most of whom have market research backgrounds, handles most of the market research themselves. Moreover, what used to take months can now be completed in just a few weeks. "Now when we launch a new product, we are confident about its functionality and market performance. I think a large part of this is because research gives us a clear understanding and very definite predictions. Identifying products with huge potential two years before launch allows you to focus your efforts on them," Hunter said. Technology is playing an increasingly important role, enabling companies like Ferrara not only to conduct more research in-house but also providing them with more options to conduct research better. There are many channels for obtaining data, such as message boards, chat rooms, and online communities popular with millennials and Gen Z (born mid-1990s to 2000s), but technology also has limitations. Ferrara aims to keep online surveys under 7 minutes, Hunter explained, because responses from longer surveys tend to be of lower quality, especially for those completing questionnaires on smartphones. Other research may be much more rigorous, depending on how the company plans to use the information gathered. Last summer, Ferrara built a 20-person online community to help its sub-brand SweeTarts develop a chewy product. The three-week project required participants to submit unboxing reaction videos showing their reactions when opening boxes of candies of different sizes, shapes, flavors, tastes, and textures sent by Ferrara. Some products were Ferrara's own, while others were from competitors, such as Mars' Skittles and Starburst. Ferrara wanted to observe each participant's reaction when tasting these products. Participants were asked whether they liked the product or where chewy candies might have more market potential, which helped Ferrara refine its product development. They were also asked to design their ideal product. Ferrara also had people record or write about their shopping experiences. This helped researchers gain a direct sense of the entire process, including impulse purchases or deliberate decisions, and why consumers ultimately did not buy a product. The public provided such feedback, and Ferrara could contact them immediately to gain deeper insights into the reasons behind their behavior. "These methods have indeed helped us obtain more useful information. I don't think the research process will be eliminated or reduced, but the way we do product research is indeed changing and evolving. If anything, we are actually doing more testing than before, just in a slightly different way," Hunter said. **-04- **A New Way of Thinking Changing consumers is not easy. To achieve this vision, Conagra took four years to change how they develop and research products. During this lengthy process, convincing employees, especially experienced managers, to adopt a different way of thinking was one of the biggest challenges, as they had done things a certain way for most of their careers. Conagra brought in data scientists and researchers to give lectures on how emerging brands grow and which consumer behaviors are associated with that growth. Nolan arranged for senior management to attend training courses to make people realize this was not a far-fetched idea but a scientific approach. This FMCG giant also organized an analytics team of over 50 members to analyze complex data and identify trends, with most members not even having worked in the food industry. Nolan said this marked the birth of a new way of thinking. In the past, these positions would have been filled by people with food industry and market research backgrounds. Conagra knew it would be difficult to retrain them with the company's new mindset. Therefore, the company chose people with extensive experience in data science, service industries, and food service, even if they needed time to learn company specifics, such as the brand portfolio or how products are made. Conagra's research scope has also expanded beyond the company. Now, Conagra sometimes collaborates with professors from the University of Chicago to evaluate whether they are correctly interpreting patterns of human behavior. "Now, we have abandoned many old principles and fully adapted to the new product research model," Nolan said. **-05- **Mars Wrigley: Old and New Coexist Mars takes a different approach, retaining traditional consumer testing while incorporating new tools, technologies, and ways of thinking that were not accepted or available a few years ago. Lisa Saxon Reed, global sensory director at Mars Wrigley, affirmed the importance of traditional consumer testing: "A few years ago, we redesigned the packaging for an extra-large (35-piece) gum, improving on the version designed years ago for the Orbit brand." This company, which has developed over 30 gum products, found that consumers wanted a recyclable plastic container to ensure the quality of unchewed gum. Consumers also wanted to hear a "click" to feel the package was securely closed. Saxon Reed was not involved in the development of the early packaging form. She speculated that the early packaging failed to resonate with consumers because it was made of cardboard, raising doubts about product freshness and durability. According to Saxon Reed, after a year of development, the new packaging launched in 2016 and was successful, becoming Walmart's best-selling gum product of the year. As a result, Mars Wrigley extended this packaging to its 5-stick gum products. Saxon Reed said: "If we hadn't created a series of packaging prototypes and had consumers use them in front of us, we would absolutely have missed the importance of these sensory experiences, potentially leading to another market failure. If I were doing an online survey, I'm not sure how I would have learned about those consumer feedback... I don't think those ideas would have come out of nowhere, so we might have missed a huge win." At the same time, Saxon Reed also praised the convenience of online research. She shared another case about product form: in fall 2017, Mars Wrigley wanted to upgrade its Extra brand stick gum to cube-shaped gum. Early in the process, Mars Wrigley asked consumers to complete an online journal, showing in words, pictures, etc., how they defined refreshment. The company wanted to tailor the new product for U.S. consumers, not just introduce the cube-shaped gum already available in China. When Mars Wrigley noticed that people used blue or drew waterfalls, showers, and flowing water to express refreshment, product developers began incorporating these characteristics into the new Extra product by changing colors, flavors, or adding cooling elements. Then, they conducted classic research methods among gum-loving consumers, such as providing multiple samples to try and asking about preferences. "Extra Refresher hit shelves earlier this year and got off to a good start," Saxon Reed said. Saxon Reed does not see technology platforms and traditional product testing as an either/or proposition, but rather as complementary. Affirming the necessity of classic testing methods, she said: "How can technology truly help us better understand the feedback we receive? On that point, I haven't seen technology that can replicate the real feedback people give after trying a product. After all, it's food; consumers must taste it themselves." Regardless of the processes large food and beverage companies adopt, how much money and time they spend testing and researching their products, or how deeply they engage with consumers, FMCG companies and product research firms agree that a product's success largely depends on being delicious—this has never changed and cannot change. "Everyone can use data to package a product beautifully, but if the product doesn't taste good, you'll only buy it once for the packaging," Bisceglia said. Source: fooddive