APICS is the premier professional association for supply chain management.

Food Innovation’s Cream of the Cup

by APICS CEO Abe Eshkenazi, CSCP, CPA, CAE |   20104 | 0 | 0

It’s hard to deny the Greek yogurt trend. Go to the grocery store, and you’ll see aisles of the stuff. Turn on the television, and you’ll see every celebrity from John Stamos to Bobby Flay endorsing various Greek yogurt products. Still, as popular as Greek yogurt is, Chobani was the only name in the US business for a long time. Last week, the Harvard Business Review Blog Network featured “Why the Greek Yogurt Craze Should Be a Wake-Up Call to Big Food.”

“Food fads develop quickly in today’s marketplace,” write Manny Picciola and Stuart Jackson. In 2005, Hamdi Ulukaya bought a former Kraft Foods factory and began making Chobani. Now, Chobani is said to be valued at as much as $5 billion. And the experts at General Mills, Dannon, and others are left scratching their heads and counting their lost sales.

America’s largest food companies employ countless teams of marketers. Yet, despite its impressive manpower, the bloggers note, “‘Big Food’ missed Greek yogurt. As the dynamics of the American food market have changed, the industry that essentially invented the modern marketer has been slow to notice.”

Picciola and Jackson offer advice to food manufacturers that could be relevant to any consumer goods company. The recommendations include the following:

  • Learn how to be flexible and experimental. Food companies should no longer rely on supermarket displays and television ads to reach customers. Instead, they should invest in social media, specialty retailers, and word-of-mouth advertising.
  • “Good taste” and “tastes good” are different things. “Controlled experiments involving consumer taste preferences have taken food companies down a path of continuously fatter, sweeter, and saltier products,” they write. “To unleash food fads, companies need to … choose products that they can believe in.”
  • Stop the fixation on ingredient cost. The authors advise looking across the entire value chain, expanding beyond packaging and promotion, to include natural—and more expensive—ingredients.

“Relying on one approach to marketing has left [Big Food] exposed in today’s fast-moving climate.”

Innovating your supply chains

As the Harvard Business Review Blog Network article describes, supply chain and operations management professionals have the opportunity to influence and innovate the entire value chain. Consider the definition of value creation as it appears in the APICS Operations Management Body of Knowledge Framework: “Value creation is taking raw materials or knowledge and converting it into a product or service that has more value to the customer than the original material or data. Value is created using transformational processes.”

APICS and the APICS Foundation give you the tools to master supply chain management. Take, for example, APICS 2014, which will feature a food and beverage supply chain forum along with a variety of other educational and thought-provoking sessions. APICS 2014 will take place October 19–21, 2014, in New Orleans, Louisiana. Registration opens in May, so mark your calendars now. It’s an event you can’t afford to miss. 

All comments will be published pending approval. Read the APICS Comment Policy.


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