Tyson Foods Builds a Land of Discovery

When you think of innovative products in the consumer goods industry, chances are that the word "chicken" is not the first thing that comes to mind. Yet, Tyson Foods Inc. has built an unmatched reputation among its consumers and customers as a pioneer in this protein category with new product firsts such as chicken patties throughout its 74-year history.

"Innovation has always played a key role at Tyson Foods. On the chicken front, if Tyson wasn't the first, then we were certainly one of the first," says Craig Bacon, senior vice president Research & Development (R&D) for Tyson Foods Inc. "Chicken has evolved from being considered primarily a commodity retail product to emerging in a variety of product forms that meet changing consumer need states. Today, chicken can be found in all meal occasions such as appetizers, breakfast, lunch and dinner offerings."

Tyson has also expanded its innovation efforts beyond poultry into other proteins such as beef and pork as well as non-protein, prepared food items.

"There is never a shortage of new product ideas in a company the size of Tyson Foods," says Bacon, who points out that the $26.9 billion company has a unique advantage that most other consumer goods companies lack.

Innovation Advantage

Tyson's unique vantage point comes in the form of a diversified business model, which affords the ability to create innovative and insight-driven food solutions and go to market with joint value creations ahead of the competition.

While Tyson is best known for being one of the most recognizable brands of chicken in the U.S. retail channel, it is also a leading provider in foodservice.

In fact, Tyson is a top protein provider to most major national restaurant chains, including fast food, casual, mid-scale and fine dining. In addition to being a supplier for chicken to the foodservice industry, Tyson also supplies hospitals, school cafeterias, national pizza chains and retail frozen pizza manufacturers with everything from beef, pork and chicken pizza toppings to pizza crusts, steaks, ham and a variety of deli meats. Plus, Tyson leads in soups, sauces and side dishes and is the second largest tortilla manufacturer in the United States.

Tyson's International unit, which accounted for 14 percent of sales in 2008 and provides products to more than 90 countries, is well poised to support the growth of its U.S. retail and restaurant chain customers as they expand internationally.

Having a stronghold in the foodservice channel enables Tyson to see trends sooner than traditional consumer products companies. "A vast majority of our national accounts -- the top 100 restaurants -- feature customization-type products that match emerging trends," says Bacon. "So, when we start seeing consumer trends at our foodservice partners, it's not long before we can provide a viable retail offering to satisfy the consumer's at-home eating occasions."

Take the 2007 launch of Tyson Any'tizers, a retail line of restaurant-style frozen snacks, for example. After observing that chicken was the most popular appetizer menu item in restaurants, specifically boneless chicken wings, which are actually boneless breast chunks, and chicken fries, Tyson set out to turn this insight into viable retail products, validating the idea through qualitative and quantitative consumer testing. Findings proved that consumers viewed products, like Buffalo Style Boneless Chicken Wyngs, Honey BBQ Boneless Chicken Wyngs and Cheddar & Jalapeno Chicken Bites, as appropriate for many eating occasions. Thus, the new product line was rolled out nationwide, and Tyson Any'tizers continues to be one of the company's most successful innovations to date. In fact, Tyson is expanding the line with products that are heated first and then smothered or "tossed" in sauce, similar to how a foodservice venue would prepare the item.

More recently, Tyson has been able to react quickly to additional trends spurred by the economic downturn as many consumers opt to eat at home more often and take their lunches to work to save money. Borrowing from concepts traditionally seen only in foodservice kitchens, Tyson aims to serve the retail segment through innovative and on-trend product offerings. For example, Tyson now offers Braised Beef Brisket with Mild Chile Sauce in its dinner meats category. This product is comparable to a beef barbacoa entree that would be served in a casual dining restaurant but Tyson's offering is at a lower price point.

Innovating Innovation

The foresight afforded by its foodservice operations aside, Bacon readily admits that there is always room for improvement. So for the past few years, Tyson has focused on building transparency into its innovation processes to improve how it collaborates with key customers and suppliers.

"As cross-functional teams work across the company, it is imperative that information is shared throughout the product lifecycle, from ideation through concept qualification, prototyping and, ultimately, commercialization," says Bacon.

The first major step to improvement was the erection of the now well-known "Discovery Center," a 100,000 square-foot research and development facility located on the campus of Tyson's World Headquarters in Springdale, Ark. The center includes 19 specialized research kitchens, a multi-protein pilot plant, a packaging innovation lab, a sensory analysis lab and consumer focus group capabilities.

"The Discovery Center allows our key strategic customers to co-develop new products with Tyson based on consumer needs and insights, and bring those ideas from concept to a product reality within one facility with a much quicker turnaround time than conventional product prototyping," explains Bacon. "This is true speed to market."

Kimberly Glenn, director R&D, Tyson Foods Inc., explains the timeline of a typical product development project within the Discovery Center: "When a customer comes into one of the R&D kitchens, we often will prepare a benchtop sample or concept based on some previous consumer insights related to the needs for a specific category. After ironing out the concept with the customer, our R&D scientists get to work preparing a commercialized sample in our USDA-inspected pilot facility. The ability to create that sample on the same day provides the opportunity to bring in a focus group to test and evaluate the sample that evening. The next day, we make additional samples that incorporate the latest focus group's feedback and present them to the customer while they are still here on campus. So, instead of shipping samples back and forth between Tyson and the customer, they are often able to leave here in less than a week with a product that has consumer insight and validation as well as production capability validation."

Bacon also points out that the Discovery Center's location in northwest Arkansas, a high growth area, has additional advantages when it comes to consumer insights. "The majority of the people here come from a wide variety of places and backgrounds, which affords us a pretty good representation of the broader consumer market."

As for contributing to the bottom line, since the Discovery Center opened, cumulative sales from new products have totaled more than $2 billion.

Enabling Connections

To further enhance the transparency and prioritization of new product ideas, Tyson went live with Oracle Agile Product Lifecycle Management (PLM) for Process in June 2007 to bring product data and development processes into a single system.

Integrated with its SAP Enterprise Resource Planning (ERP) system, the solution allows the company to drive efficiency and accountability into its innovation process so that Tyson can best use vital product development assets to get the right products out to market more quickly.

"Tyson has 13,000 to 14,000 SKUs, so you can imagine the proliferation of materials involved," says Bacon. "To be able to electronically capture vital information about ingredients, packaging materials, etc., in one place really made all of our jobs a lot easier."

The solution includes the following:

• A new product development and introduction module provides Tyson with a multistage collaborative project and portfolio management solution. As a project progresses through stages, new employees are permitted access to project information as they are needed.
• A global specification management module allows management of ingredient, packaging and finished good specifications.
• An electronic questionnaire allows capture of electronic data from partners and suppliers.
• A supply chain relationship management module provides visibility into suppliers' current offerings as well as potential capabilities.
• A supplier portal provides collaboration opportunities with suppliers.
• New product introduction workflows link
• all systems, providing speed to market and optimum product data management.
• Tracking capabilities help Tyson understand time-to-market trends as well as improvement opportunities. Once a new product is launched, Tyson tracks its performance through its third birthday.

Moving forward, Tyson intends to continue using the tools it has to optimize formulas and provide return on capital of its PLM solution.

"We also expect continued growth in the use of metrics to drive business behaviors through appropriate goal setting. We'll accomplish this next task through transparency and consistency in the reporting performance of new product introductions," closes Bacon.

New Product Development Toolkit

Tyson Foods Senior Vice President of Research & Development Craig Bacon seeks to fight increasing input costs by responding to consumer needs with higher-margin, insight-driven food solutions. Here, he shares best practice tips -- derived from his 18-year career at Tyson -- that you can apply to your innovation efforts:

• Define yourbusiness needs early. Clearly define your critical business requirements and those "nice-to-have" features so that priority is appropriately given as resources are constrained.
• Focus on instilling a culture of innovation. Building a new product is the easy part. Deciding what to build and why before you build it -- as well as how to launch it -- are the tricky parts.
• Be flexible. Recognize the need for flexibility between different business units, while maintaining consistency in non-negotiable company standards.
• Get input and buy-in from the business units on those standards.
• Keep it simple! Don't feel that you must add unneeded
• complexity just because you've always done it that way.
• Design appropriate ways to do streamlined beta tests.
• Avoid analysis paralysis that leads to non-launches or late launches.
• Fail Fast: Make it a standard practice to decide early what things will work and what will not. Then, refocus your efforts quickly.
• Don't try to be all things to all people: Know what your core competencies are and where you can play with a competitive advantage.
• While we may be able to make something, that doesn't always mean we should.