Ep. 080 - An Overview of Ideation to Commercialization

An Overview of Ideation to Commercialization

This episode is going to be a bit different than other episodes. Most episodes were reflection based or stuff about my life but I guess I might have ran out of things to talk about in my life. At least for now.

So in this episode, I’m going to talk about the life cycle of a product, how an idea forms, goes through the gauntlet and then commercialized to make tens of thousands of something you've created.

Along the way, I’ll give you some tips on how to make this process faster, or who you have to deal with to succeed in this aspect.

Most people in a food company don’t know the whole process. Those that do either learn from a startup or force themselves to get involved. I’m the latter. After a recent project where it’s finally launching, I now have full confidence in how a product is made.

There are a ton of moving parts and I hope that this episode will break down and show you how to actually make a food product from idea to selling it to millions.

This Episode is Sponsored by Foodgrads

This episode is sponsored by FoodGrads, an interactive platform for the Food & Beverage Industry, which focuses on closing the gap between students and employers with a broader mission to attract and retain people to a meaningful career in food. From Food Scientists to Farmers, Chefs to Plant Managers, QA Technicians to Dieticians, or Marketing and Sales, no matter what your passion–there’s something for everyone in Food—and they will help you find it.

Join FoodGrads for support, mentorship and guidance to start your career. Just go to foodgrads.com

[New] This Episode is Also Sponsored by Steviva Ingredients

Hey everyone, we have a new sponsor on the podcast and I am happy to introduce you guys to the wonderful people at Steviva, a sweetener company in Oregon. If you want to hear more about this amazing company, listen to episode 72 with their CEO Thom King. What’s really cool about Steviva is that they are changing their whole company into something bigger and better and I love telling the story of how this will happen. As we progress, we plan to go through the process of Steviva’s transformation and inform you on what this amazing company can do for you.

For more information about Steviva, go to http://www.stevivaingredients.com/

Housekeeping

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Transcript Ideation

There are two types of areas where ideas come from: external or internal.

External ideas are based off of market research, or what’s currently selling, or even as simple as “this product exists, but it has x problem, let’s invent a product that doesn’t have x problem”. Most of the time, people in the marketing department develop something called a competitive or gap analysis which lists 5 to 10 of the top selling product’s strengths and weaknesses.

An easy way to develop an idea is to just look at a competitive analysis and increase the positive attributes by like 20% and then also remove anything negative.

One example is if I did a competitive analysis about protein bars and I see that the max protein bar is 20 grams  of protein and uses sucralose, I could probably be “innovative” and sell a protein bar with 24 grams of protein and no sucralose. Though most companies would balk at the idea that this is the way they “innovate”, when you boil it down, it’s pretty much that.

Another method of ideation is internal and this takes a high amount of intuition and out-of-the-box thinking. This is an extremely hard type of innovation that is based off of finding the cutting edge of innovation and thinking differently. Only a few people have the talent of connecting the dots, but if you feel like you do, then go for it.

Again, I want to stress how hard and risky this is. The bigger the company, the more people are going to think you are insane for even bringing it up. But what do they know? They don’t know food as much as you do right?

The best example I have in this situation is Apple (of course). Innovation doesn’t have to be completely new, but it has to be so out of the box people think you’re insane. For example, no headphone jack? That’s insane! Why would they do that? I’m not a tech expert, but that is one example, of an internally inspired innovation.

Another food related example is taco bell. In my podcast, I talk about the naked chicken chalupa a lot because I am so amazed that taco bell made a taco shell out of fried chicken. No average company would ever think about doing that.

So ideas are great but convincing a whole team that an idea is great is the fun part.

Most ideas come from founders or marketing. Depending on the company, research and development is involved, but not as often as you think. They’re the experts and they know their customers, so they are in charge with their ideas. As a product developer, you should respect that.

But idea approval is messy and there are several ways of doing this. So how do you validate an idea? The biggest toolset in your arsenal is data. Collecting data that your idea will work out is the best way to prove that this idea is legit, but event that has its downfall. Most really innovative ideas might not even come to fruition because it’s so ahead of their time, or the method of collecting data is wrong.

In all due respect, the best way of having an idea be approved by a body just takes a charismatic person who knows how to push the right buttons and convince someone that their idea will make a lot of money. I know this isn’t what most people want to hear, but that’s the way most crazy ideas happen, and also the most terrible mistakes.

This is a really specific type of company culture: the culture of accepting ideas. Most companies say ideas come from anywhere, but most companies don’t implement it. All that is true is that the chain of command is really long and eventually, a product has to reach someone at the top and they have to stamp their mark of approval. Good luck!

Pre- Commercialization

So an idea gets approved and then what? You have to then do the work to make the product tangible to the manufacturing team, whether this manufacturing team is a copacker or owned by your company.

This includes a variety of steps which mainly includes making optimal prototypes and gathering documentation on what the ingredients are. Again, different companies have different methods but the big idea is, you have to develop a good recipe that is easily reproducible and make sure it doesn’t kill or sue anyone.

So for me, developing a prototype is the fun part and there are tons of ways to do it. If you are under nutritional barriers such as it has to be under this amount of calories or must have this much protein, then it’s best to start doing the nutritional data analysis first than to go in the kitchen and go to town. A good prototype has to go through a vetting process and there are many ways to do it, but all of them involve having someone taste your product. In small companies, maybe you just need a couple of people who like it. In big companies, maybe 20 to 50 people have to like the taste before validating your product can be brought up to a higher being.

This higher being is what I liked to call, a judge. Someone who has the authority to approve or disaspprove your hard work. In some cases, this is the marketing department, or the executive, or the founder of a company.

The more data you have where people actually like your product, the more you can convince the “judge” to approve your product. Most rational people will approve something if the majority of people like it, even if he or she doesn’t. But that’s not always the case. Sometimes, the judge will say “I don’t like this, I wish it has this, this this, and you have to go back to the lab and try again.

Barely anyone gets it right the first time. Some ideas go through 100s of iterations and still get scrapped. But that’s the life of a product developer.

So let’s say you convince marketing and the “judge” that your prototype is awesome? It’s going to be very important to eventually get documents of all of these ingredients and archive them. For me, this is the worst part of the job, but it is a necessary evil. There are some innovations in the pipe line to make this easier, like RogoHub, but it will be a very long time before everyone is on board.

Getting documents usually involves getting proof from a sales person about the ingredients you put into your food. For example, you need the nutrition facts. If your product is gluten free, then you need a certificate verifying it’s gluten. If it’s Non-GMO, you have to get a statement, but maybe you even need a certificate. Ideally, your boss should have a good system to gather, sort, and archive docuemtns so in case of any outbreak, you’ll be ready to pull out the source. If you don’t have something like this, start one.

In some companies, this task is shared among product development, quality assurance, and regulatory or maybe just one of them.

This is serious stuff and is going to be super important in the future.

Do note, in most companies, this is the sole purpose of a product developer, or a person in research and development who develops new products. If you had to focus on one thing in the corporate behemoth, this is where you should be the expert at.

Commercialization

Once pre-commercialization passes, then you go into the complex world of commercialization which now involves almost every department working together to complete a timeline. This includes planning, inventory, transportation, packaging, labels, product marketing, procurement, product development, regulatory, and quality assurance, oh, and generally, a Project Manager is in charge of it too.

So it works like this: the “Judge” approves of a product in pre-commercialization, and then the company has to make a huge investment to actually make the product. Planning has to make the forcast oh how many will sell, inventory has to make sure there’s enough room in the warehouse and develop systems to track the product, transportation has to coordinate moving the product everywhere, packaging has to develop or confirm the packaging used is correct, labels has to design something pretty and compliant, product marketing monitors if everything’s ok, product developers get blamed for everything, regulatory makes sure we have all of the doohickies to pass it thoggh the boarders (if necessary), and quality assurance makes sure we have all of the specs necessary to document in case we get into trouble.

You see this sort of ecosystem sprout out that depending on the company, is either treated as a harmonious beautiful, collaboration, or like Game of Thrones in which a lot of unexpected drama happens either internally in the company, or externally say, a factory mishap or a communication error.

So commercialization takes a tremendously long time just because of so many people and professions are collaborating together. Technically, you’re going to do the least amount of work here but that might not always be the case. You now take on the role of someone who verifies things such as factory manufacturing reports, and how labels writes things on the level. If you have the confidence, you also become an authority figure on the product (though marketing might fight you for it).

The best way to handle commercialization is not only be an expert at what you do (creating great products) but also be a great communicator with all of the clashing personalities, and the clashing professions.

In general, the time frame from commercialization starts with a forecast which goes into motion. If you don’t have a forecast, then well, better just throw money in the pot and see what happens. A Label file gets circulated around departments that all departments confirm around. Your job here is to verify they are using the right ingredients, the right claims, and the right label. That’s about all. Marketing copy or what ugly color they use to represent your products has nothing to do with you.

During this time, we communicate with the manufacturer. The manufacturer sends replicate samples of the formula to cross check if communication between formulas is ok. Usually, a triangle sensory test is used to make sure no one can statistically tell the difference between the two products. between corporate and procurement gets a pilot protocol in motion. A pilot is a test run with the manufacturer to make sure they can actually run the lab sample. A pilot is a big step for a small investment. It tests everything about communicating with the contract manufacturer. It tests their mettle in gathering ingredients, communicating with the corporate team, and most importantly, confirms that the product can be made and tastes relatively the same compared to your formula sheet. Packaging is also important, and are usually packaged in blank film or white stocked depending on the product.

After the pilot sample is approved (byt the way, you’ll have 100s of samples to give away), procurement initiates the production run which takes about 6 to 10 weeks at minimum before starting production.

Post- Commercialization

For a product developer, not much goes on here. Quality assurance usually takes the reigns and deals with some check list stuff. However, it is important to keep track of how well your product is doing. You can always ask planning or marketing for the digits.

However, now since your product has launched, there are so many other things that can go wrong and all of them focus on either cost reduction or raw material issues. Things that are very hard for a product developer to predict.

Cost reduction involves changing one ingredient with another, usually cheaper ingredient. Cheap doesn’t mean lower quality, over time, things get cheaper due to technological advancements. Low cost projects are usually due to high volume and a bunch of other stuff I don’t really focus on.

Raw material issues involve a supplier completely running out of a material and everyone panics. Issues like this are terrible because sometimes the material is so unique or there is a shortage in the world in general. Purchasing will hound you to find a replacement and then there is no replacement because there is no substitute! Whatever.

So what separates good product developers from great product developers?

Well, it’s a simple answer. How far do you want to understand the process? Do you just want to do your thing?

From the people I’ve interviewed, and the people I’ve asked for advice, understanding the complexities of turning your idea into something people buy and eat is one of the keystones to becoming a great product developer.

But you actually can’t be an expert at everything.

The best product developers are the ones who can communicate and understand the process, and have the confidence to convince people that they know what they are doing. They are the ones who can convince marketing on the challenges of making something, or can work with a manufacturer to make their formula a reality. It’s getting info from various sources on what’s running out so you can prepare to kake changes or subsitutution.

To summarize, a good product developer knows not only their role, but how to communicate their role to others.

The more you understand the process, the more autonomous you can be, and the more you know what you’re actually talking about. Yes, it’s a daunting step to know how all of this works, but you don’t become great in your own bubble.

 

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