Approaching new confectionery product development with an eye for success
Within a highly competitive market, manufacturers of confectionery and bakery goods are working harder than ever to enable their products to stand out from the crowd amid a major pandemic. Food and confectionery consultant Graham Godfrey, a Confectionery Production editorial board member, examines what exactly makes a product a hit with consumers.
First of all let’s try to define success. There are probably a lot of definitions depending on which element of the business you are involved in, but for now let’s consider:-
• A product which appeals to a substantial number of consumers and which you are able to place in front of those consumers (ie you have distribution)
• Quality, wholesome products with good packaging and unique characteristics which survives distribution and has a shelf life of at least 12 months
• Customers purchasing the product on a regular basis from choice, not just once or twice out of interest or on the basis solely of price. Customers also need to recognise that the product represents good value.
• Sales price (either through direct or commercial sales) sufficient to cover costs of manufacture and operation of the business
• Practical manufacturing process which can be scaled and operated without excessive waste or losses
Now while these are not the only criteria defining a successful product they do represent a reasonable set of objectives against which you can measure your product’s performance.
Products need to be profitable in order to create value in the business and creating value is the reason you have a business. True profitability is therefore vital to success.
Evaluating that profitability needs care, because too often things like factory overheads are allocated on a somewhat irrational basis, for example on tonnage processed rather than revenue earned. Seasonal products can be particularly difficult to accurately evaluate, where ingredients and factory costs have to be incurred many months before sale and storage costs, losses for sales unmade.
It is important to have a rational and consistent method of costing overheads and other costs beyond rational inputs, and also of capturing the true costs of scrap, overweight and all the other inefficiencies and costs which creep into a manufacturing operation.
In smaller businesses don’t forget you have to pay yourself a salary, there is no point for working for free, you may as well shut down and work for someone else Knowing which are your most profitable products (and knowing why) is essential because then maximum resources in terms of operations and marketing can be applied to them. Equally unprofitable products can be questioned and possibly discontinued or at least be subject to actions to make them profitable.
Care needs to be taken when introducing range extensions to existing products – this may merely increase costs and complexity without actually increasing total sales. A range extension can often look attractive but whilst a new product may raise sales it might be worth considering discontinuing the least profitable version.
Appeal and Opportunity
A product does need to appeal to a substantial proportion of consumers. Whilst you may be making a complex, “healthy” “novel” “interesting” “environmentally friendly” product, consumers are really only interested in whether or not they enjoyed the product and consider it good value. This is what drives repeat purchase and few companies in confectionery have made their fortune on the basis of “I’ll never buy that again” responses.
The consumer also needs frequent and easy opportunities to purchase the product. Reliable distribution, driven by good sales and excellent manufacturer back up are essential. On the smallest artisan scale you may (just about) make progress with a weekly market stall, but any longer gap then this and people will have moved on to something else. You need regular, convenient sales opportunities and the retailer understanding and wanting to sell your product.
Quality Uniqueness and Appearance
Whatever the market there is absolutely substitute for quality and consistency. Consumers will recognise quality and desirability immediately and it is a key part of their developing a relationship with it. Any quality problem will quickly spread by word of mouth (and social media) and will taint not just the product but the entire brand. It is essential that any quality problem is dealt with promptly and generously, even if you suspect the problem may not have been yours.
It is not having a problem which is the issue, it is how you deal with it and defuse any negative impact
If you are entering a market or introducing a new product to an existing market it is vital that you give the consumer a reason for moving from what he or she normally buys to your product. Your product must have some unique factor which immediately attracts attention and the package (which is the first point of “contact”) must attract attention and spell out the message in a clear and attractive manner.
Consumers must by now be getting bored with products where the only claim is “Natural” or “Gluten Free”. A product needs a “story”, a really good reason for the consumer to buy it. All the things which you think make the product wonderful (unique ingredients, ethical ingredient sourcing, novel manufacturing process, your partner says it tastes great) are of no importance to the consumer unless they are packaged and used as a “reason to purchase”. They are looking for a product which has an interesting story and promises satisfaction, great taste and good value. The consumer needs to be able to feel proud that he or she has bought the product, particularly if it is a gift.
The first thing a consumer will be aware of when they encounter the product will be its wrapper, so the wrapper must have impact and must deliver your message in clear and enthusiastic manner. Once they open the wrapper, before even tasting it they will be aware of the appearance of the product and it aroma. The product must therefore look good and convey the image you are seeking to achieve. You may want the product to look a little “rustic” but it must still look professional and as close as possible the same as last time they bought it.
It goes without saying that the product must be wholesome. Whilst this is an aspect of the more general term “quality” it is a particularly important one. Ingredients must be microbiologically safe and free of taint and wrapping materials also need to be odour free (and this is by no means always the case).
Repeat Purchase and Perceived Value
Very few companies are successful on the basis of “one time” purchases. It is essential that the customer who buys the product once comes back and buys it a second time.
Repeat purchase will be driven by the enjoyment and satisfaction they derived from the product and, importantly, whether they thought it represented good value. It is important to recognise that price and value are two different things. Something can be expensive but still represent good value to the purchaser and you should be trying to make the customer think that the product delivers value above its price
Understanding consumer response is an important area where social media can be of great help to a new business. Correctly constructed and handled, a social media campaign will allow you to get rapid and fairly accurate consumer response to the product and its availability. It is of course important then to respond to that input, both directly to the consumers (“we are listening”) and by adapting your product to their comments.
In conclusion, a business cannot survive without successful products – and what is more new products which build on the success of earlier ones with enhanced consumer interest and increased profitability.