Pierce Hollingsworth

The 1999 IFT Annual Meeting, held in Chicago, Ill., July 24–28, featured three sizzling morning Hot Topic sessions featuring more than a dozen blue-ribbon panelists. Each speaker addressed issues at the forefront of the food industry as it enters the next century. This article is a recap of each session.

The Food Medicine Show: From Snake Oil to Fish Oil
“Schizophrenic dichotomy”—that’s how one panelist described the current state of food-related health claim regulations. “On one side you have the regulatory bucket, which says that foods shall not make drug claims, and on the other you have all the exceptions that shoot holes in the bucket. The bucket may still hold water, but it’s becoming increasingly leaky,” observed Stephen McNamara, a partner with the law firm Hyman, Phelps & McNamara, to the packed Sunday Hot Topic audience.

He stressed that while neither the Food and Drug Administration nor Congress has legally recognized or defined either nutraceuticals or functional foods, the regulatory environment is undergoing a major transition. “There are no separate rules for them, but we’re seeing a sea change in how far a company can go in making claims before they’re considered drug status,” McNamara said.

Intense consumer interest in herbal compounds such as ginseng, garlic, ginko biloba, echinacea, St. John’s wort, saw palmetto, and kava kava has propelled these products into mainstream foods and beverages. In the wake of successful efforts by the food industry to provide stronger health claims relating to the structure and function benefits of psyllium and oat bran, the industry is pressing for broader acceptance of health claims for a long list of healthy ingredients. Many of these have dubious scientific evidence behind them, while others have a long dietary history in other countries.

“The science is difficult to evaluate because of differing viewpoints,” stated Michael Rotblatt, assistant clinical professor of medicine at the UCLA School of Medicine. “Herbalists see them as a harmless and better means to correct physiological imbalances and naturally promote good health vs synthetic ingredients. Traditional science tends to view them as bioactive additives that have potential toxicity as well as benefits. Both sides have their biases,” he stressed.

Therein lies the crux of the debate. With nutraceuticals and functional foods falling somewhere between existing food and drug labeling laws, what standard should be applied?

The Center for Science in the Public Interest weighs in on the side of extreme caution. “Advertisements that hype functional ingredients and make unapproved health claims undermine the FDA’s efforts to protect consumers,” stated Ilene Ringel Heller, a CSPI staff attorney. “If physiologically active ingredients are to be added to our food supply, then it is crucial that they be sold on the basis of regulatory regimes developed by government health authorities, not marketing strategies generated by companies hoping to capitalize on the latest health fad.”

--- PAGE BREAK ---

Her perspective was echoed bluntly by John Renner, chief medical officer for Health Scout, a watchdog organization. “If you don’t have a good crap detector, you better get one. Marketing people are working at all levels. Nutraceutical marketing is way ahead of the science, and we’re going to pay a heavy price for trial and error.”

Despite the potential for abuse, health claims increase nutritional awareness. In this light, more information is better than less, according to Annette Dickinson, vice president of the Council for Responsible Nutrition. “Commercial messages can and do convey important health information and help consumers make appropriate choices of foods and dietary supplements beneficial to health,” she stressed.

The two viewpoints focus on the issue of consumers misled vs consumers uninformed. Clearly, the debate is just beginning. As nutraceuticals and functional foods continue to gain public acceptance, the marketplace will ultimately shape the debate.

Julie Miller Jones of the College of St. Catherine and Guy Johnson, Vice President, Nutrition, Kellogg USA, Inc., moderated the Hot Topic panel.

Policies, Politics, and Passion: What Keeps the Food Industry in Line?
“Parents shouldn’t have to fear the consequences of serving their children apple cider or a meal out at a local restaurant. Yet, food poisoning outbreaks have taught us that today we must,” warned Caroline Smith DeWaal, food safety program director for CSPI. “The level of risk from contaminated food is higher than we thought.”

DeWaal clearly put the “hot” in Monday’s Hot Topic, which featured plenty of policy, politicking, and passion.

The underlying—and highly complex—issue is the regulation of food safety. On one side are proponents of minimal, yet streamlined and consistent government regulation, particularly at the federal level. This camp generally believes that market forces compel companies to provide a safe, wholesome product. If they don’t, the fallout from causing public illness and death is often fatal to the company, too.

“The United States has the safest food supply in the world,” stressed Roger Lawrence, vice president, quality assurance for McCormick & Co. “Much of the credit goes to federal and state regulatory systems, consumer representative groups, and many prominent food processors that have initiated improvements or worked in conjunction with government agencies.”

However, big companies are far different from small companies, Lawrence said. “Regulatory bodies and other oversight groups should focus more on smaller players within the food industry. They are more inclined to take much great risks and have much less to lose if they don’t follow appropriate regulations,” he observed. In addition, he called for a greater emphasis on collaborative regulation between government and industry, vs what he termed “punitive” dealings, and work on weeding out conflicting regulations, on both a national and international level.

--- PAGE BREAK ---

The other side of the debate is largely framed by CSPI, the lead consumer group in advocating sweeping changes in federal food regulation. It generally regards the food industry as too big to sufficiently regulate itself, and doesn’t trust the market to provide enough incentive. Moreover, it doesn’t have the same perspective on the safety of the U.S. food supply. According to CSPI’s DeWaal, much of the answer lies in consolidating food regulation into one government agency appointed by the President and charged with total oversight and management of food safety across all food segments.

Currently the U.S. House of Representatives is considering a bill that takes the first step, which would direct FDA to make sweeping changes in the way food safety is regulated and monitored. The Consumer Food Safety Act of 1999 would revamp FDA’s food safety program and develop a comprehensive national food safety plan.

At this point, little is known about the additional cost of such a program and just how it would coexist with existing local, state, and federal food safety regulatory bodies.

Because of this ambiguity and universal agreement that more consistency is needed, industry groups such as the National Food Processors Association only conditionally accept the general concept. “We’re not diametrically opposed to a single food agency, but we are against simply rearranging the chairs or creating more layers of bureaucracy on top of what we already have,” stated NFPA executive vice president for government affairs Kelly Johnston.

A single agency is far more open to politicization, in that a “food safety czar” appointed by the president would wield enormous power while being open to incredible political pressure.

“A single food safety policy does not require a single agency,” he stressed.

Nevertheless, a single agency has worked well for the two years it has been in place in Canada. “We fought it, but we’ve had to eat our words. It has improved things,” stated Laurie Curry, vice president for public policy for the Food and Consumer Products Manufacturers of Canada. She stressed, however, that the agency’s charter was designed to minimize political influence.

Adding to the complexity of the debate is the fact that most foodborne illnesses are not the result of poor processes or lapses in plant inspection and quality assurance. Mishandling by consumers and foodservice workers causes them. Thus the debate shifts to where food safety dollars are better spent—federal process inspections or consumer education.

In the final analysis, the whole debate is charged by the passion of real life-and-death concerns—one death due to foodborne pathogens can ignite a media frenzy and trigger congressional hearings. “No votes are won by telling grieving parents that they are responsible for the loss, having improperly prepared a hamburger,” stated Stephanie Smith, FDA’s new consumer safety officer.

“My two years of experience as a Senate staffer, working solely on the issue of food safety, suggests to me that policy is shaped by both politics and passion,” Smith said. “In the end, the question of whether food safety policy is shaped by passion or politics is less important than what the policy ends up being.”

Moderating Monday’s Hot Topic panel were Robert Kluter, food technologist for the U.S. Army Soldier Support Center, and G. Curtis Busk, principal for Bj&C, Inc.

--- PAGE BREAK ---

Innovation or Iteration, All That Glitters Is Not Gold
Focus groups, phone surveys, scanner data . . . consumer information is gleaned from myriad sources. It all helps food marketers gain an understanding of what the consumer wants. And this leads to successful, customer-pleasing innovation.

Nice theory, but wrong, according to Ruth Eden, COO of MicroSys, Inc. and co-moderator of the Tuesday Hot Topic panel. “The consumer is a rearview mirror,” she said. Few consumers can anticipate innovation, and often they will reject it when it’s handed to them. Post-It notes, minivans, fax machines, Federal Express shipping, and CNN all received early public rejections. Today they’re indispensible components of modern life. So it goes with food, Eden stressed.

It’s a tough challenge for cautious, low-margin food companies. Yet, innovation is the golden key to success, longevity, and profitability.

The most innovative companies are those that create a pervasive culture around the concept. They’re willing to take risks, reward success as well as failure, and cultivate communication throughout the whole organization, Eden said.

Joining Eden were high-ranking representatives for three highly innovative companies. Todd Abraham, vice president, international research and development for Pillsbury, David McNair, vice president for global research and development and chief technology officer for Campbell Soup Co., and David Braun, 3M Corp. corporate scientist, recently retired. Each shared examples of innovation through management integration, investment, and intuition.

“Sometimes creativity and innovation are used too interchangeably,” Braun noted. “Innovation encompasses newness, which encompasses creativity and imagination, but it goes beyond that to putting a concept into practice and seeing it accepted by the public. Without acceptance, you really don’t have innovation. Innovation is change, not the other way around.”

Braun was involved with many of the successful products, such as Post-Its, that made 3M synonymous with innovation. While the company isn’t in the food business, its success rate for consumer innovation provides some valuable lessons.

“Top management needs to insist on innovation and change on a daily basis. They need to have a culture that rewards ‘failure.’ And they must have a personal commitment to the culture,” he stressed. “I put failure in quotes because it is really part of the learning process. Some of the most valuable lessons are learned through so-called failure.”

A case in point is the lesson learned by Campbell from its Intelligent Quisine experience. “We have no choice, we must innovate. But true food innovation is not always embraced by the consumer. It takes time and follows a pattern. Innovations rarely sell themselves,” McNair explained. “Ultimately, innovation is the transformation of knowledge into money by providing a new solution for customer needs. It can alter markets and change the competitive balance.”

Intelligent Quisine was Campbell’s attempt to create a new brand based on new food concepts and the home delivery of complete, heart-healthy meals ready to heat and eat. Cost and logistics ultimately doomed the project, but much was learned in developing the science behind the product. These lessons are being applied to many of Campbell’s more conventional new products.

--- PAGE BREAK ---

McNair also displayed data that indicates that innovation has a better return on investment than imitation or improvements. Over a five-year period, products born from innovation had a much higher success ratio than products designed as imitations.

“So, why so little innovation? It requires a higher investment, the outcome is unpredictable, and it usually is commercially challenging,” he said. However, innovation doesn’t always mean hitting a home run. Process innovation, packaging, or simple changes can have a solid impact. McNair cited pre-shredded cheese in resealable pouches, salad bags, and picante sauce in squeeze bottles as examples, as well as his own company’s tremendous success with V-8 Splash, a vegetable and fruit juice drink that has re-ignited interest in the old brand.

It all starts with an environment that fosters innovative thinking. “Ultimately, it’s the culture, about getting away from the fear of failure,” asserted Pillsbury’s Abraham. He stressed the need to create “legends” behind innovation success, specific accomplishments that become part of the corporate heritage and lexicon. “You create the freedom to succeed, where failure becomes an educational experience. If you have a 100% success rate, you’re not trying hard enough. Celebrate success, but tolerate failure and avoid punishment.”

The creative, innovative culture can be easy to describe and difficult to initiate. It requires top-down acceptance, and practical guidelines. And the learning process can go well beyond the boundaries of the food industry. “Innovation is all around us,” said Annette Moser-Wellman, a principal with Fire-Mark, Inc., an innovation consulting company. She has authored a soon-to-be-published book, The Five Faces of Genius, which serves as the basis for her description of the qualities of innovation, in which she draws parallels to the arts.

They are:
The Seer: One who develops clear mental pictures and has strong visual intuition.

The Observer: One who has a peculiar ability to coalesce ideas from disparate sources.

The Alchemist: One who has the power to combine domains and create new ones.

The Fool: One who celebrates weakness, is immune to criticism, can turn lemons into lemonade.

The Sage: One who can distill complicated notions into their simplest essences.

Most innovators have combined skills, and most innovative companies recognize the need to cultivate these characteristics. “Our role is to be a business artist, discovering the terra incognito,” Moser-Wellman said.

In the final analysis, innovation or iteration boils down to profitability—converting culture, creativity, and high-minded theory into bottom-line performance.

“Einstein said that we need to strive to make things as simple as they can be, but no more,” quoted Patrick McCormick, a consultant with Arthur Andersen. “The food industry is facing challenges. Research and development should be a driver, but it’s not.”

He asserted that innovative companies need practical underpinnings such as “a strategy that makes sense and is understood, appreciation for creativity and diversity, people who care, sufficient resources, a performance-oriented culture, and strong leadership.”

McCormick noted that in his experience, it is far less expensive to apply resources early in the innovation cycle than late, where the die is cast and management has far less leverage. “Sometimes people are overwhelmed by good ideas. You need an effective knowledge management process.”

When it all comes together, good things happen. According to 3M’s Braun, “Highly successful, innovative products create quality jobs, optimize product differentiation, have zero environmental impact, and delight and surprise consumers.”

The panel was co-moderated by John Hanlin, senior program leader for Pillsbury.

The author is President, The Hollingsworth Group, P.O. Box 300, Wheaton, IL 60189.