INTELLIGENT DIALOGUE SERIES

SUMMER 2010

The impact of science and systems on the way we grow, consume, market, fortify, manage, purchase and interact with what we eat.
PAGE 4 When it Comes to Food, Why Must Tech Be a FourLetter Word? PAGE 10 Intelligent Dialogue Q&A PAGE 22 10 iPhone Apps for Foodies PAGE 25 Whats Keeping You Up at Night?

PORTER NOVELLI: FOOD 3.0

PORTER NOVELLI: FOOD 3.0

Introduction

FOOD 3.0

How is technology changing our relationship with food? How do science and systems impact the way we grow it, consume it, market it, fortify it, manage it, purchase it and interact with it? The short answer: The changes are significant and the impact is growing. The complete story is far more complex. Whats a marketer to do? And what are the major communications challenges and opportunities as Food 3.0 continues to evolve? Porter Novelli leaders and experts weigh in on Food 3.0 in this issue of Intelligent Dialogue.

PORTER NOVELLI: FOOD 3.0

MARY CHRIST-ERWIN Partner Porter Novelli Public Services, Washington, DC Contact Mary at Mary.Christ-Erwin@porternovelli.com or 202.973.3601

WHEN IT COMES TO FOOD

Be a Four-Letter Word?
ACCORDING TO THE LATE COMEDIAN SAM KINISON, THERE WOULDN T BE WORLD HUNGER IF PEOPLE WOULD LIVE WHERE THE FOOD IS!
The outrageous stand-up was no futurist, but he had a point, and years later, cutting-edge technology speaks to it: While hunger persists around the globe, innovations have begun to dramatically improve peoples ability to grow and access food. Technological innovations are also enhancing food safety, boosting nutrition and maximizing yield. Sound like progress? I certainly think so. So, why for so many is tech a four-letter word when it comes to our food supply? Some critics focus on agriculture or manufacturing, others are skeptical of innovation related to functionality and fortification, or nanotechnology. Some fret over projections of what genomics may bring, while others worry about environmental impact or even increased variety and abundance. Food techno-resisters have a real voice in the food-supply conversation, yet their counterparts in other sectors are considered behind the times. When was the last time you heard a manufacturing boss cry foul at tools that assist his business in completing a job better, faster and more efficiently?

WHY MUST TECH

PORTER NOVELLI: FOOD 3.0

FUNDAMENTALLY, TECHNOLOGY ENHANCES US. WE DEPEND ON IT. WE CRAVE IT. IT HELPS US LIVE WELL.

Why is there such reluctance to combine the need for food with the power of technology? I believe in large part its a communications failure, based upon the few framing the dialogue for the many. Fundamentally, technology enhances us. We depend on it. We crave it. It helps us live well. Perhaps some products are ahead of their time early attempts to include more healthful items on fast-food menus are good examples. And sometimes products exported from one region or country to another dont translate culturally. For example, probioticenhanced yogurt took significant time and communications effort to gain traction among

both health professionals and consumers in the U.S., while Europeans who have consumed probiotic foods for years looked on in amazement. At the most basic level, nutrition research demonstrates that most people suffer from nutrient inadequacies calcium, fiber, magnesium, potassium. In response, food scientists have found ways to include whole grains in cereals, to add cholesterol-lowering stanols and plant sterols into orange juice or baked goods such as Minute Maid Premium Heart WiseTM or VitaTops muffin tops with CoroWiseTM plant sterols and to creatively deliver calcium, a challenging mineral to work with.

PORTER NOVELLI: FOOD 3.0

So why all the uproar? The widespread movement for organic, sustainable and local food has begun to associate itself with the desire for non-engineered. But the truth is, nearly every food is processed on some level, first and foremost for safety. With the multitude of choices available, most consumers can now choose how processed they want their food to be from minimally processed whole fruits and vegetables to packaged versions intended to deliver servings in novel ways. Talk to parents of picky eaters about the important role of Wonder Bread, Apple & Eve FruitablesTM, Dannon Dan-o-Nino or spaghetti sauce enhanced with vegetables in getting nutrients into children without an argument. When the priority is ensuring children consume nutrients, sometimes the technology sneer falls off the radar. The reality is that food performs for us at multiple levels, offering both nutrition and desirability. Consumers are savvier than ever, and they demand a lot. So what is a food manufacturer or marketer to do? Innovate, but dont talk tech? Manufacturers have numerous communications tools at their fingertips,

but not all of them are working to their best advantage. Theyre hindered by legal and regulatory limitations and the call by public health advocates to limit the manufacturers marketing voice. A tool with significant promise and very real challenges is the opportunity manufacturers have to speak about new nutrition research, as well as technological innovation that offers enhanced nutritional value. The dialogue over what food labels should include is contentious, and the regulations are a moving target. Yet, globally, functional foods sales are projected to reach $109 billion this year, according to Global Industry Analysts. The head of Porter Novellis global regulatory work, Peter Pitts, who previously worked for the Food and Drug Administration, offers food for thought: The debate over functional foods has, to date, focused on the functionality given a product by Mother Nature. Today, a functional food is a product that has been given additional nutrition potency through science. What hasnt changed is the regulatory definition of a functional food, and what types of health claims can be communicated to consumers. Thats not good for consumers and not good for business. This lack of clarity has had the perverse effect of holding back responsible

PORTER NOVELLI: FOOD 3.0

WHEN THE PRIORITY IS ON ENSURING CHILDREN CONSUME NUTRIENTS, SOMETIMES THE TECHNOLOGY SNEER FALLS OFF THE RADAR.

PORTER NOVELLI: FOOD 3.0

GLOBALLY, FUNCTIONAL FOODS SALES ARE PROJECTED TO REACH $109 BILLION THIS YEAR, ACCORDING TO GLOBAL INDUSTRY ANALYSTS.

PORTER NOVELLI: FOOD 3.0

players while emboldening fringe elements. If we want to truly drive better health through better nutrition, the government must become both clearer and more dynamic in its efforts to clarify nutritional health claims over a wide variety of foods. The battle over food claims in the European Union is, if possible, even more contentious. Keith Taylor of Porter Novelli London encapsulates the challenge: The mismanaged EU health-claims process has exacerbated consumers uncertainty when it comes to food. Manufacturers and retailers face quite a challenge in marketing health and nutrition benefits in ways that consumers do not feel are being shoved down their throats.

So whats needed to cut through the rhetoric and offer consumers what they want clear, delicious, safe choices that meet their individual needs? The right conversations. The right balance. Places of agreement among stakeholders, among consumers, among us all. A celebration of our varied needs and wants and the technologies that deliver against them. We need to bring to a halt the all-or-nothing discussion on food science and technology and identify ways to make all manner of agriculture, production and manufacturing work in concert. Lets build the toolbox, not break it.

FOOD TECHNOLOGY HAS THE POTENTIAL TO DELIVER MUCH Institute for Food Technologists:
Designing macronutrient ingredients for enhanced satiety Nutrigenomics, nutritional phenotype and delivery of personalized nutrition Processing impact and bioavailability issues of botanicals

MORE. Take a look at the topics included in the July 2010 meeting of the

Novel processes and food safety for military and space feeding Translating overseas health and wellness trends for American consumers

PORTER NOVELLI: FOOD 3.0

Intelligent Dialogue

10

PORTER NOVELLI: FOOD 3.0

WHAT ARE THE GREATEST CHALLENGES AND OPPORTUNITIES FOR MANUFACTURERS IN ENHANCING FOOD TECHNOLOGIES (E.G., COMMUNIC ATING THE BENEFITS OF NUTRITION FORTIFIC ATION, FUNCTIONAL INGREDIENTS,

INNOVATIVE FOOD FORMATS, SENSORY APPROACHES)?

BILL KOLBERG Managing Director Porter Novelli Los Angeles Contact Bill at Bill.Kolberg@porternovelli.com or 323.762.2480
The biggest challenge is simply that consumers dont eat nutrition; they eat food flavors and textures. Therefore, communication about fat from calories, dietary fiber, nutritional values, etc., doesnt resonate very strongly with the typical consumer. We work with a local registered dietitian on behalf of a foodservice provider. Our challenge is to simplify consumers understanding of the nutritional quality of the food they eat. We feel the real opportunity is not to lecture people about the dos and donts of what they consume, because its never that black or white. What weve found is that behavior changes can and should be subtle and simple, like adding or subtracting an ingredient from a recipe versus discarding it altogether.

SHEILA WEISS Account Supervisor Porter Novelli Public Services, Washington, DC Contact Sheila at Sheila.Weiss@porternovelli.com or 202.973.2943
In a word taste. The food has to taste good, or consumers wont buy it. Obvious, I know, but true. From a stakeholder perspective, the greatest challenge is balancing the messages to ensure that they are persuasive and informational, yet within the regulatory framework.
PORTER NOVELLI: FOOD 3.0

11

BRAD McCORMICK Executive Vice President, Global Digital Director Porter Novelli Austin Contact Brad at Brad.McCormick@porternovelli.com or 512.241.2240

One of the biggest challenges for food manufacturers is providing a variety of products that meet the needs of the increasingly diverse palate of the American eater, while also turning a profit. Increasingly, the economies of scale dont apply. So many big manufacturers business models were built on a one-size-fits-all premise. Because technology is empowering consumers, they have greater freedom to demand what they want, leading to market fragmentation.

What this means is that small, niche food manufacturers suddenly have more relevance in the food industry. And big food manufacturers are taking notice. Thats why Kelloggs purchased a smaller niche food company like Kashi, and why Perdue would launch a small niche brand like Harvestland.

12

PORTER NOVELLI: FOOD 3.0

BECAUSE TECHNOLOGY IS EMPOWERING CONSUMERS, THEY HAVE GREATER FREEDOM TO DEMAND WHAT THEY WANT.

PORTER NOVELLI: FOOD 3.0

13

14

PORTER NOVELLI: FOOD 3.0

HOW ARE MOBILE TECHNOLOGY AND SOCIAL MEDIA AND IMPACTING THEIR PURCHASES?

CHANGING CONSUMERS RELATIONSHIP WITH FOOD

KEITH TAYLOR Director Porter Novelli London Contact Keith at Keith.Taylor@porternovelli.com or +44.1295.224588
Mobile technology is tapping into the desire for convenience, driving more informed choices and enabling more spontaneity. Here in the U.K., online delivery service Ocado lets iPhone users order and pay for grocery delivery. Shopping lists can be built gradually, and items can be bookmarked as favorites. Other grocery-related apps let shoppers compare prices, so they can make more informed purchasing decisions. People are using their phones to look up recipes as they grocery shop. Perhaps one of the most interesting apps is StickyBits. Users can annotate information (notes, video, photographs) to a bar code. It shouldnt be long before a user scans a label on a tub of ice cream and receives the manufacturers recommendation for optimal toppings. The opportunities for consumer-to-consumer and retaileror manufacturer-to-consumer dialogue are boundless. Users have all the information they could possibly want or need, right in their pockets. Most also have a network of people offering or asking for suggestions. Purchases may be less planned, but theyre better informed than they were even a year ago. The business implication? Manufacturers and retailers must ensure that they become part of the conversation and part of the purchasing decision. If you have a major food brand and you dont have a community manager, hire one now.

PORTER NOVELLI: FOOD 3.0

15

ISRAEL MIRSKY Executive Vice President, Emerging Media and Technology Porter Novelli New York Contact Israel at Israel.Mirsky@porternovelli.com or 212.601.8314
Recent research indicates that consumers globally are becoming more concerned with calories than with organic or healthy eating choices. As consumers share information with one another about what matters to them when it comes to staying healthy and eating right, the bestsubstantiated wisdom count your calories seems to be bubbling to the top. Put simply, the Internet is helping consumers get smarter about what they eat. Mobile applications like Calorie Counter and Food Tracker/DailyBurn help people track the calories they
Google Search Trends on Food

ingest and burn more easily than ever before. The apps are consultative (Should I have the chicken salad or the salmon with risotto?). Food diaries have been found to be one of the most effective vehicles for developing and maintaining healthy eating habits a food diary thats easy to use and carry is likely to have a strong impact on your eating habits. Apps that help identify responsibly sourced foods are proliferating witness Seafood Watch, which helps identify whether the sushi on the plate is ocean-friendly or not, aiming to inform consumers at a glance whether theyre contributing to overfishing.

16

PORTER NOVELLI: FOOD 3.0

PORTER NOVELLI: FOOD 3.0 PORTER NOVELLI: FOOD 3.0

17

JOEL JOHNSON Executive Vice President, Integrated Planning Director Porter Novelli New York Contact Joel at Joel.Johnson@porternovelli.com or 212.601.8322
Social commerce or socially enabled e-commerce is now mobile enabled. In Germany, Barcoo links products with customer reviews right at the shelf through a mobile app for smartphones. The data possibilities are virtually endless: from user reviews and ratings to price comparisons or even allergy information. But, its impossible to look at the impact of mobile technologies on our purchase decisions without first understanding and acknowledging that consumer demand for information about food, food technologies and even the environmental or cultural impact of eating are driving a broader conversation. As A.G. Lafley of Procter & Gamble has stated, consumer is boss. The implication is that consumers are defining the relationship they want to have with producers, retailers and marketers of food the purchase funnel is the battleground, and mobile technology is likely to be the bridge between the product, consumer and brand. Mobile technologies are transforming the purchase funnel. Though it was never really linear (anyone or anything could interrupt a purchase decision, enabling consumers to skip whole steps), smartphones empower consumers to make more informed decisions as they move from say, trial to loyalty. For example, tasting a fine wine in your wine shop doesnt have to be the last step before trial in fact, it could be the first step in establishing a relationship with the brand through conversation. In addition to enabling a mobile information search, smartphones might help a consumer to like the wine on Facebook, tweet the tasting or bookmark the wine to a favorites list. In other words, mobile allows consumers to capture the experience in a social network, start a dialogue with the producer or note it for consumption later. On the brand side, the producers can leverage a single experience into a broader shared one with fans, followers and even critics in online conversations (providing, of course, they have the earned media assets to do this a community, a community manager and branded social network activity). The brand can now keep the consumer engaged in a conversation about its product, whether that consumer has purchased the product or not. A third player in this conversation is the expert out there who might influence a consumers relationship with the wine on

18

PORTER NOVELLI: FOOD 3.0

THE BRAND CAN NOW KEEP THE CONSUMER ENGAGED IN A CONVERSATION ABOUT ITS PRODUCTS.

different fronts quality, price and taste, come to mind, but it could easily be affinity too. Perhaps the motivational trigger for one consumer is recommendations by other wine lovers who prefer biodynamic wines or wines that come from vintners with best-inclass labor practices. In that case, mobile technologies benefit consumers by providing

real-time connection of products to social networks for approval, not just information (which may be better gleaned from advertising or the wine shop owner).

PORTER NOVELLI: FOOD 3.0

19

MARKETERS [WILL] STRUGGLE WITH INCREASED SCRUTINY FROM CONSUMERS DEMANDING MORE TRANSPARENCY.

20

PORTER NOVELLI: FOOD 3.0

HERES WHAT WERE GOING TO SEE IN THE NEXT YEAR BETWEEN CONSUMERS AND THE FOOD THEY EAT:

OR TWO IN MOBILE THAT WILL IMPACT THE RELATIONSHIP

More mobile apps will connect consumers at the shelf with their social network and affinity groups. More producers will enable their food products to be scanned and uploaded via mobile, images, QR, bar codes and augmented reality readers. More brands will try to influence consumers at the shelf through location-based services like Gowalla and FourSquare. In the U.S., well see more FCC, FTC and FDA involvement in claims from user reviews, comparison data and other recommendations. PR crises will sprout up around food, as marketers struggle with increased scrutiny from consumers demanding more transparency (either through mobile social networks or mobile commerce).

Retailers will move to act as middlemen, with their own mobile technologies helping to influence the consumer at the shelf which sets the stage for a potential marketing conflict of interest between individual brands and producers. The growth of mobile food trucks that rely on social media technologies to alert followers. Trucks are increasing in popularity due to the economic downturn, Millennials impact on lifestyles and an increasing public interest in food culture.

PORTER NOVELLI: FOOD 3.0

21

10 iPhone Apps for

FOODIES
4 5 6

10

BIGOVEN 170,000 recipes, with color photos of the finished products LOCALEATS The best 100 restaurants in each of the 50 largest U.S. cities POCKET COCKTAILS Photos of hundreds of pretty cocktails with step-by-step recipes FAST FOOD CALORIE COUNTER Nutritional info for 6,000 menu items from the 55 top fast food restaurants COOKIT Alerts users when its time to start cooking specific parts of the meal (when to boil the pasta, roast the potatoes or take bread out of the oven) TIPULATOR Computes a tip based on a check total, and splits it among the people in the party

URBANSPOON Turns the iPhone into a slot machine to help find a place to eat. Theres a reel for the neighborhood, one for cuisine type and one for price YELP Uses the phones GPS capability to deliver information and candid user reviews for nearby restaurants, bars and other businesses VEGOUT Uses the iPhones GPS to find nearby vegetarian restaurants BARISTA Guides users through the process of creating a latte, cappuccino, americano, mocha, and other delightful espresso beverages

10

22

PORTER NOVELLI: FOOD 3.0

24

PORTER NOVELLI: FOOD 3.0

Whats Keeping You

UP AT NIGHT?

At Porter Novelli, we thrive on communications challenges. Give us a call, and let us take a crack at the challenges keeping you up at night. Well assemble a team of experts for an Intelligent Dialogue discussion focused on you. Contact Porter Novelli CEO Gary Stockman with your challenge: Gary.Stockman@porternovelli.com or 212.601.8114.

25

PORTER NOVELLI: FOOD 3.0

PHOTOGRAPHY CREDITS: COVER (FRONT, BACK)

Top Image: Creative Commons, Sirtrentalot Bottom Image: Creative Commons, Cielokatie

PAGE 8
Top Image: Creative Commons, Oskay Middle Image: Creative Commons, Adactio Bottom Image: Creative Commons, Yogma

PAGE 14
Top Image: Creative Commons, Davieiam Middle Image: Creative Commons, Comedy_nose Bottom Image: Creative Commons, Adrian8_8

PAGE 23
Background Image: Creative Commons, Lizjones112 Foreground Image: Creative Commons, Dan4th

PAGE 24
Image: Creative Commons, Jurvetson

PAGE 2
Top Image: Creative Commons, Botheredbybees Middle image: Creative Commons, David Barrie Bottom Image: David.nikonvscanon

PAGE 10
Image: Creative Commons, Juliaeatssweaters

PAGE 17
Image: Creative Commons, Little blue hen

PAGE 25
Top Image: Creative Commons, Qmnonic

PAGE 12
Image: Creative Commons, Emmarosephotos

PAGE 19
Creative Commons, Electric Images

PAGE 5
Image: Creative Commons, Dumbledad

PAGE 20 PAGE 13
Top Image: Avlxyz Middle Image: Creative Commons, Frozenchipmunk Bottom Image: Creative Commons, Mexican 2000 Top Image: Creative Commons, Topgold Middle Image: Creative Commons, Marc Smith Bottom Image: Creative Commons, Ted Percival

PAGE 7
Top Image: Creative Commons, Rhett Maxwell Middle Image: Creative Commons, USACE Europe District Bottom Image: Creative Commons, JP Puerta

26

PORTER NOVELLI: FOOD 3.0

Porter Novelli Global Headquarters 75 Varick Street, 6th Floor New York, NY 10013 Direct 212.601.8000 Fax 212.601.8101 www.porternovelli.com

28

PORTER NOVELLI: FOOD 3.0