Innovation has become a watchword across the entire worldwide operations of Hormel Foods. Over the last two years, the company has opened four new centers dedicated to the creation of new brands, products and processes. Two of these centers are in the company’s home state of Minnesota—one in Chicago (primarily focused on the PLANTERS® brand), and the other is in Jiaxing, China.
These centers are proving instrumental to the company’s ability to launch hundreds of new retail and foodservice offerings each year.
Innovation Close to Home
Located just a hundred yards behind the Hormel Foods headquarters in Austin, Minn., the flagship Innovation Center was designed from the ground up to foster collaboration and creativity between Hormel Foods team members, partners and customers. Cross-functional teams across all business units contributed to the programming of the building. Opening in 2022, the 12,500-square-foot space has two state-of-the-art kitchens and a wide variety of food preparation equipment, providing Hormel Foods chefs all the tools they need to experiment and create as well as to prototype for future plant production of recipes. The center also features 12 renovated spaces that house three huddle rooms to facilitate collaboration, three conference rooms, two training rooms, an inspired food gallery and a hospitality hub.
“Having the Innovation Center as a dedicated space for interaction with our customers and our internal teams embodies our cultural beliefs: create solutions, challenge yourself and build bridges,” says Kevin Myers, senior vice president of research and development and quality control at Hormel Foods. “The ability to innovate with new products and packaging will be key to achieving ongoing growth for our company. The investment of Hormel Foods into innovation spaces such as our Innovation Center shows the commitment of our company to drive continuous innovation.”
The Originate Center
Just a couple hours to the northwest in Willmar, Minn., is the company’s recently opened Originate Center. A repurposed and refurbished manufacturing facility now dedicated to test runs of new food products, the Originate Center is essentially a mini-production plant built to bridge the gap between product ideation and large-scale production. The center allows engineers, food-safety and workplace-safety experts, package designers and chefs to work in tandem, tweaking recipes, selecting the right equipment, and creating the most efficient processes.
Designed for trial production runs of six months to a year, the 70,000-square-foot space will be able to run multiple test products simultaneously. The new products produced at the Originate Center can then be test-marketed with retail and foodservice customers. Putting new brands and products into small-scale production allows Hormel Foods to have confidence in new food offerings and develop proprietary processes before moving to large-scale production with retail and foodservice partners.
Innovation in Asia
New product offerings have been a critical part of the double-digit growth Hormel Foods has seen in China. In the last few years, new product sales have accounted for over one third of revenue in the region. To keep pace, the Hormel Foods team in China has opened a brand-new facility: the APAC R&D Innovation Center in the northern city of Jiaxing.
The new APAC center was created to be the company’s hub for innovation not just in China but across the Asia-Pacific region, including Indonesia, Japan, Vietnam and the Philippines. The Innovation Center is designed for collaboration, with a customer experience area, an interactive 100-seat theater and an R&D pilot plant. There are also five large lab spaces dedicated to creating new sauces, snacks and meat products.
“The innovation team in China is a well-oiled machine with strong front-end and back-end pipelines of products,” says Marianne Pollock, director of marketing innovation at Hormel Foods International. “To be honest, it’s been transformational. Our China operation is a case study in delivering new products. We want to take that knowledge about how to fire up innovation to Brazil, Mexico and the Philippines.”
Using the facilities at the APAC R&D Innovation Center, teams can bring a product from conception to market within six months. That half-year timeline is remarkable considering all the steps that have to take place, including product development, contracting supplies, building out plant facilities, testing prototypes, designing packaging, safety testing and marketing.
“Speed is a competitive advantage in the Chinese market,” says Echo Hu, marketing director of Hormel Foods China. “It is critical to be first to market and grab the consumer’s mindshare. Once you have a promising new concept, you can guarantee there will be a lot of fast followers trying to take market share.”
New Ideas for Nuts and Snacks
The company’s fourth hub for creative thinking is at the Planters® headquarters in Chicago. Outfitted with a wide array of equipment, the Planters® Innovation Center can mimic almost any process performed by their plants. The space allows chefs and brand specialists to create small batches and quickly iterate new flavors and products. The center’s goal is to reduce the time for products to get from concept to store shelf.
“Full-scale production at plants can be as high as 10,000 pounds an hour, so being able to do these iterations in small scale ahead of time can be a huge savings both in terms of time and costs,” says Amber Pylypiw, head of snacking and entertaining R&D (Planters®, Corn Nuts® and Columbus® Craft Meats brands) at Hormel Foods.
Innovation in packaging is also part of the center’s mission. Planters® packaging experts can test and review packaging prototypes from suppliers and make prototype packages for new products that can be tested with consumer groups.
“Each week our Innovation Center hosts exploratory sessions,” says Pylypiw. “It’s a chance for small teams to come together, be creative, play with different flavors and techniques, and explore possibilities. There are a lot of ideas that have come out of those sessions that will soon be on the shelves.”
The four new innovation centers are already proving their worth. In 2022, Hormel Foods launched over 600 new products in retail and food service. These new offerings are sold in over 80 countries around the world. The drive to innovate is powered by Brand Fuel, a recently formed center for excellence bringing together consumer insights teams, brand managers and world-class marketers to support Hormel Foods brands.