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Anyone who develops new products for a living must be aware of a multitude of influences. Acknowledging this, we cover

scientific discoveries

consumer trends

product design and formulation

engineering technology

process engineering

manufacturing

filling and packaging

logistics and distribution

retail merchandising

end of life disposal

Then there are the legal and regulatory issues, such as safety and labelling, as well as intellectual property rights, brand management, competition and international trade that we have to take into account.

But it all means nothing without the creativity and insights of men and women who can put things together in new ways to create new products that improve our lives.

We celebrate those people.

Ian Grant

Publisher

Application is the new game
Kraft Foods boss fears GM transfers to food
US GMA wants FDA rules relaxed
Megabrands built on trust - ACNielsen
Nappy makers dump load, prices
Evaluation guide to FP6 proposals
US resumes Ukraine chicken run

Biotechnology - 1

Application is the new game

The smart money is shifting from basic research to applied research in biotechnology, if mergers and acquisitions on both sides of the Atlantic are any guide.

In the UK, biotech entrepreneur Sir Christopher Evans is pitching for the country’s biggest biotech firm, Oxford Glycosciences, while in the US, Genaissance Pharmaceuticals last week said it would buy bankrupt former rival DNA Sciences. Pointedly, it is offering $1.3 million for a company that not long ago attracted $110 million in private funds.

"Pure research is out," says Edmund Orr, a senior consultant with DeAngelis Group, a US biotech recruitment agency. “Anything that's brand new, fresh out of the box, that kind of technology has a tougher battle."

Spiro Michas of the Cambridge Group in Connecticut says the shift was to be expected. “There is so much data being created, there is a great need for people with a systematic mathematical approach to evaluating it. They spent so much money collecting all this genomics information, it would be a terrible waste to just let it sit."

As private venture capital has dried up over the past three years, so M&A activity has risen. For the second month in a row, biotechnology mergers led the US health care M&A market, says industry watcher Irving Levine Associates.

“In a slow month which saw only 53 deals announced, the biotech sector accounted for nine deals, or 17 percent of the total. Based on prices revealed to date, an aggregate of $851.3 million was committed to finance these nine. This is 45 percent of the $1.893 billion that was spent for the month.”

Genaissance may keep 30 of the 100+ scientists at DNA Sciences, but only those working on products that are close to commercial launch.

Expect more of the same.

Biotechnology – 2

Kraft Foods boss fears GM transfers to food

Kraft co-CEO Betsy Holden wants stricter rules to prevent contamination of the human food chain by crops bioengineered to make drugs.

Speaking at a meeting in Washington, DC sponsored by the US Department of Agriculture, Holden said GM crops and animals threaten the human food chain, reports the Chicago Sun-Times.

"Both share the risk of commingling with the food supply, the same problem that led to the recall a couple of years ago of our Taco Bell products that were adulterated with StarLink corn," Holden said. StarLink corn is approved for animal consumption but not for humans.

Kraft spokesman Michael Mudd said later that if the US government refused to outlaw pharmaceutical crops or to ban their planting in farm states, Kraft Foods "wants there to be every regulation possible so commingling will not happen."

The USDA has proposed to double the permitted distance between GM crops for drugs and crops for humans to one mile (1.6km). They also want land used for GM crops lie fallow for a year before being planted to crops for humans, and for farmers to use separate equipment to handle each harvest.

GM advocates say this is costly and unnecessary, but earlier the USDA found traces of biopharmaceutical corn in a crop of Nebraska soybeans and in a new corn crop in Iowa. Farmers had planted the soybeans on top of the plowed-under corn. ProdiGene, a private biotech company, was fined $3 million as a result.

According to the newspaper, some 20 companies are splicing corn, rice, soybeans, tobacco and other crops to try to mass-produce medicines.

Biotech plantings are expected to rise this year. According to industry body Biotechnology Industry Organisation (BIO), “Biotech corn plantings are up four percent to 38 percent of all corn planted in the US; soybeans increased five percent to 80 percent of all plantings, and cotton remains statistically unchanged at 70 percent.

“Globally, we continue to see an increase in acceptance of biotech crops, with a 12 percent increase in 2002 over 2001 with 145 million acres planted in 13 countries,” said BIO.

Bioterrorism

US GMA wants FDA rules relaxed

The Grocery Manufacturers of America has told the US Food and Drug Administration that proposed new rules requiring prior notice of imported food shipments “could cause serious and costly disruptions to the nation's food supply without significantly strengthening homeland security.”

In language similar to that used by the US National Food Processors Association, GMA vice president of federal affairs Susan Stout said the new rules go too far and will be impossible to implement or police.

"The agency has proposed elements that won't produce any benefit in terms of food security, while imposing difficult, if not impossible, compliance burdens on manufacturers to meet the differing notification requirements of multiple agencies," she said.

The new rules will implement the Bioterrorism Act of 2001, which goes into effect on 12 December.

Stout said that much of the information required of a manufacturer, the lot or production code of a shipment, for example, isn't known until a truck is loaded.

She warned that the greatest problems are likely to be the “inevitable confusion and delay” as shippers and inspectors try to comply with new rules that overlap existing US Customs prior-notice regulations.

Brands

Megabrands built on trust - ACNielsen

Today's consumers connect with brand franchises that symbolise trust, offer a specific expertise and group products logically, according to a study released today by market researcher ACNielsen.

The study shows that personal care & cosmetics brands dominate list, while Unilever, Procter & Gamble, L'Oréal, and Johnson & Johnson have most so-called megabrands and Nestlé, found in 17 categories, leads in food, beverages and confectionary. "Expertise, trust, and logically related categories are the three key attributes driving the creation of global megabrand franchises," says ACNielsen Global Services’ managing director Jane Perrin.

ACNielsen looked at more than 200 fast moving consumer goods brands from more than 50 manufacturers across 50 countries. The study found 62 brands that meet ACNielsen's criteria* for global megabrand status. More than half are in personal care & cosmetics, and 22 use the corporate name in their brand offerings. (See Table 1.)

Others, like Gillette's Oral B, use logical product groupings - toothpaste, toothbrush, dental floss, and mouthwash. In food, beverage and confectionery, ACNielsen named 23 global megabrands. Nestlé is in the most categories (17), using the consumers’ trust in the maker’s name to extend it into new product categories like breakfast cereals, baking/cooking aids, chocolate and water.

Others’ reputation allows them to extend their brand franchise across different markets. For example, Novartis' Gerber capitalises on its expertise in babies to enter markets for personal care, food, beverages & cosmetics, health care and even life insurance for young children.

*ACNielsen defines global megabrand as those that are

• sold in at least 15 of the 50 countries studied (representing 95% of the world's GDP)

• marketed with the same name in at least three categories in three or more geographical regions

• sold mainly in grocery, mass merchandise and pharmacy outlets

Table 1 - Global Mega Brand Franchises (alphabetical by Brand Owner)

_{*Includes only those categories active in three or more countries
**Brand Franchises in italics indicates those present in all 50 countries}

_{Source: ACNielsen.}

Innovation

Nappy makers dump load, prices

Faced with tougher waste regulations, fiercer competition and a declining market, manufacturers have cut the weight and volume of disposable nappies by around 30 percent and prices by 20 percent, claims their UK trade association AHPMA.

Today, the average price of a disposable nappy is 12.3 pence compared with 15.1 pence in 1997, according to market researcher Mintel. This reflects more competition as a result of the declining birth rate. But technological advances and new materials have helped to cut the proportion of household waste due to disposable nappies from four percent to 2.5 percent, it claims.

Even so, according to AHPMA figures, home-washed terrycloth nappies are cheaper and an ecologically responsible choice.

“Disposable nappies create waste, while laundering cloth nappies consumes large quantities of clean water, electricity and detergents,” it says, adding “over 80 percent of a disposable nappy and its contents is biodegradable”.

In terms of cost “home laundered terry towelling squares are the least expensive option. Disposable nappies and new style modern cloth nappy systems are similar in price. Nappy laundering services are usually the most expensive.”

According to a life cycle analysis commissioned by the Environment Agency, due to be published this year, a baby will use around 4,000 disposable nappies. Parents will therefore lash out £492 for disposable nappies at 12.3 pence each. Two dozen terrycloth nappies will set them back around £180 plus the cost of liners and cleaning. Most can be used for more than one child, making them the cheapest option financially and ecologically by far.

Research

Evaluation guide to FP6 proposals

A guide to how the European Commission will judge research proposals under its 17 billion euro Framework Six programme (FP6) is just out.

Among other things it describes the basic procedures that the Commission will follow. “The processes for evaluating proposals continue to rest on quality, transparency, equality of treatment, impartiality, efficiency and speed, and ethical considerations,” says Cordis, the EC’s innovation oracle.

Search for the document reference: COM C/2003/883 at www.cordis.lu.

Trade

US resumes Ukraine chicken run

The US will resume poultry exports to the Ukraine following the end of a 16-month ban negotiated by the US Department of Agriculture and local officials.

The deal establishes a revised veterinary certificate to be issued by the USDA Food Safety and Inspection Service for each shipment of poultry products to Ukraine. US poultry exports to the Ukraine were worth $11 million in 2001.