L
arge food manufacturers have been losing the growth game. The top 25 food
manufacturers in the United States have continued to lose share to private label,
fresh products, and smaller competitors. U.S. consumers are voting with their
wallets to leave the established large food companies. Changes in consumers' core values—
amplified by social media, celebrity chefs, and myriad food experts—are rewarding small
and medium-size companies with above-average growth.
For decades, research within corporate food companies focused on how a product performed and how
it could be improved. Historically, 60 percent to 70 percent of R&D budgets were allocated to looking at
past and/or current performance and only 10 percent focused on the future. Today, the dramatic shifts
in consumer preferences are forcing large food companies to reconsider their traditional approaches to
innovation and new product introductions. As they look to young food companies as sources of innovation,
opportunities are opening for those that are rising stars with a strong following.
BY DAVE DONNAN, A.T. KEARNEY
Sometimes You Need to
Go Small to Grow Big
74 ❘ SPECIALTY FOOD MAGAZINE specialtyfood.com
opinion