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New Product Development. Preparing to Launch. NPD Stages – New Retail Product. Steps in the Process: Idea Generation Scoping Business Case Development Development Scale-up Launch Evaluation. NPD Stages – New Retail Product. Steps in the Process: Idea Generation Scoping - PowerPoint PPT Presentation
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New Product Development
Preparing to Launch
Steps in the Process:1. Idea Generation2. Scoping 3. Business Case Development4. Development5. Scale-up6. Launch7. Evaluation
NPD Stages – New Retail Product
NPD Stages – New Retail Product
Steps in the Process:1. Idea Generation2. Scoping 3. Business Case Development4. Development5. Scale-up6. Launch7. Evaluation
Production Costs
Factors to consider: Raw material costs Yields – each step in the process Rework – can you incorporate back in?
#2 Product – with you need to sell for less? Packaging waste Labor requirements for each process step Non-production positions (Human
Resources, Accounting, Purchasing, QC)
Profit Margin for Products
How much profit does the retailer need to make on my product?
How much profit does my company need to make on my product?
Questions to ask before launching:
Retailer Margin
Article from Entrepreneur magazine gives good general information on profit and margins.
Bizstats.com gives information on average grocery industry margins.
Grocery Product Profit
Sales Income100.00%
Cost of Goods76.62%
Gross Profit23.38%
Salary/Wages(6.28%)
Rent/Taxes(1.61%)
Interest(1.36%)
Depreciation(1.29%)
Advertising(0.59%)
Other Expenses(6.48%)
Net Profit5.96%
Source: bizstats.com (2007 data)
Grocery Product Profit
Sales Income100.00%
Cost of Goods76.62%
$100.00
Gross Profit23.38%
Salary/Wages(6.28%)
Rent/Taxes(1.61%)
Interest(1.36%)
Depreciation(1.29%)
Advertising(0.59%)
Other Expenses(6.48%)
Net Profit5.96%
Source: bizstats.com (2007 data)
Grocery Product Profit
Sales Income100.00%
$130.50
Cost of Goods76.62%
$100.00
Gross Profit23.38%
Salary/Wages(6.28%)
Rent/Taxes(1.61%)
Interest(1.36%)
Depreciation(1.29%)
Advertising(0.59%)
Other Expenses(6.48%)
Net Profit5.96%
Source: bizstats.com (2007 data)
Grocery Product Profit
Sales Income100.00%
$130.50
Cost of Goods76.62%
$100.00
Gross Profit23.38%
$30.50
Salary/Wages(6.28%)
Rent/Taxes(1.61%)
Interest(1.36%)
Depreciation(1.29%)
Advertising(0.59%)
Other Expenses(6.48%)
Net Profit5.96%
Source: bizstats.com (2007 data)
Product Labeling References:
FSIS Food Standards and Labeling Policy Book: http://www.fsis.usda.gov/OPPDE/larc/Policies/Labeling_Policy_Book_082005.pdf
Title 9 CFR – Animals and Animal Products: http://www.access.gpo.gov/nara/cfr/waisidx_10/9cfrv2_10.html#301
USDA Labeling Requirements Guide:http://www.fsis.usda.gov/PDF/Labeling_Requirements_Guide.pdf
FSIS Label form: http://www.fsis.usda.gov/Frame/FrameRedirect.asp?main=http://www.fsis.usda.gov/fsisforms/7234-1.pdf
Product Labeling
1. Product name2. Inspection stamp and establishment #3. Handling statement (Keep
refrigerated, Keep Frozen)4. Net weight (for retail products)
All labels must include on Principle Display Panel (PDP):
Product Labeling
1. Name of manufacturer or distributor2. Ingredient list 3. Nutritional information
All labels must include on the Information Panel:
Raw products must also include:
1. Safe Handling Instructions
Product Name
1. Common and usual name for standard products
2. Product name vs. Fanciful name
Product Name
1. Common and usual name for standard products
2. Product name vs. Fanciful name
Corn Dog
Product Name
1. Common and usual name for standard products
2. Product name vs. Fanciful name
Corn DogBatter Wrapped Franks on a
Stick
Product Name
1. Common and usual name for standard products
2. Product name vs. Fanciful name3. All letters in product name required
to be a minimum of 1/3 the height of largest letter
Product Name
1. Common and usual name for standard products
2. Product name vs. Fanciful name3. All letters in product name required
to be a minimum of 1/3 the height of largest letter
Product Name Qualifying Statements
Liquid smoke, if mixed or injected into product requires “smoke flavoring added”
Artificial colors or flavorings must be noted Antioxidants (when permitted) must be
included as “BHA, BHT added to help protect flavor”
Terms or names of geographical significance must be qualified
i.e. Farm-style, Virginia-brand, etc.- except some are generic
i.e.: Polish sausage Genoa salami
Net Weight on PDP panel bottom 30%, parallel to base “net weight”
less than 1 lb must be as ounces (oz.) between 1 lb and 4 lbs must be dual
declarationoz. (lbs) or lbs. (oz) {i.e. 24 oz. (1 1/2
lbs)} size of letters determined by size of PDP
Ex. 1/16” high for 5 sq inch panel or less; 1/8” for 5-25 sq inch
Ingredient List “Ingredients:” - followed by a descending
list in order of quantity used “Contains Less than 2% of:…”
“spices” - natural spice designation as a group onion and garlic must be listed independently
“Flavorings” - spice extractives, liquid smoke, etc.
Products injected brine - can be prefaced with “Cured with:…”
Ingredient List
If two meat ingredients such as beef and pork are used and make up at least 70% of the meat while neither is less than 30% they can be listed as “beef and pork” can then be interchanged within those
limits without changing the label does not apply to poultry
Code Dating
Most food products include some type of code date (Use By, Best Purchased By, etc.)
Is a code date required on a product?
Code Dating
Most food products include some type of code date (Use By, Best Purchased By, etc.)
Is a code date required on a product?
Code dating is only required on some baby food, infant formula, and poultry products.
Code Dating
Poultry products require pack date, but “use by” or “sell by” are acceptable alternatives.
For all products - If used, calendar date must express month, day of month (and year for frozen or shelf stable)
Questions?
