Hostess Brands offered a preview into its new Innovation Lab, a space constructed to support the consumer goods company’s product innovation efforts amidst today’s significant shifts in consumer behavior.
The Lab, which opened its doors in June, is located in Lenexa, KS, and employs around 20 researchers, product testers and bakers. In addition to deploying different types of new baking, frying and sheeting methods supported with analytical tools, Hostess built a small packaging lab to identify different barrier properties to protect and house food, Darryl Riley, Hostess senior VP for quality, food safety and R&D, told CGT.
Its custom-built sensory booth and focus group areas provide the company with a center to develop and test new prototypes for added consumer data and insights, as well as offer customers a peek behind the curtain.
The Lab was formed to help Hostess build product development expertise, enabling it to create robust parameters for increased efficiency and effectiveness in preparing for manufacturing, said Riley. It’s expected to improve the company’s speed-to-market ambitions by facilitating faster moves from ideation to innovation to focus groups to launch.
The snacking industry, Hostess included, is a beneficiary of the consumer behavior shifts occurring during COVID-19, as consumers spend more time at home and are more apt to pantry load. Hostess reported year-over-year adjusted gross profit growth of 17.5% during its second quarter.
But while shopper behavior has shifted, Riley said, the consumer piece hasn’t necessarily changed.
“They still enjoy sweet tasting. They still enjoy all of the line extensions and different flavor varieties that we have,” he noted. “What’s changed is the shopper behavior — how many products people are buying, their basket size, where they're shopping. All of those elements have changed, and that's what we've tried to ensure that we were advancing in terms of how we package our products, how we produce them, how we focus on the ones that people are really interested in.”
The Lab is also serving as a pathway for the company to further engage with all of its employees, including staging product evaluations with competitive reviews and demonstration.
“We are really looking forward to post-COVID when we can work in collaboration with our sales team, and bring customers into our lab so that we can do concept ideation and co-development with them,” Riley noted. “Our facilities are in our headquarters, and so we want to make sure that the power of what we're doing extends not only to the technical team but also to everyone that's in the building. They can participate in the innovation process that we have gone for.”