Innovation brings booming sales for Heinz

Sales generated by new products at Heinz UK & Ireland have more than trebled in the last four years following a major overhaul of the product development process.

The percentage of sales derived from new launches was now in the double digits, revealed research and development director Steve Scott, who was speaking at Food Manufacture​'s new product development conference last month.
Back in 2005, however, there were significant barriers to progress, he said: “We were stuck in functional silos. We had poor management of the innovation pipeline, poor stage-gating and a lack of prioritisation. We weren’t basing our products on real consumer needs or evaluating launches properly. We underinvested in R&D, we didn’t have R&D represented at board level and we were not utilising our supply base effectively.”
In 2006 a European action plan was put in place to try and tackle some of these structural and cultural problems, he said. This included the creation of a supplier innovation team to work more closely with suppliers, the appointment of a European R&D vice president for Europe, a complete restructuring of the R&D infrastructure and the transfer of technical services - previously the remit of R&D - to Quality Assurance. “If a steriliser breaks down now, they don’t bother me because I’m innovating!”
Hurdle rates were also set for new products, along with a far more rigorous stage- gate process, which screened out projects without legs before vast sums of money were allocated to them, he said. “We’ve thinned down our portfolio of products in the pipeline by 40-50%. If it’s not going to generate sufficient sales or profit, we won’t pursue it. Products also have to deliver a certain rate of sale in stores for the trade to continue to list them.”