After three decades with the company, Chief Technology Officer Karsten Nielsen knows a thing or two about innovation at AAK. We asked him how the company’s innovation approach has evolved over the years and how constantly changing consumer demands affect an ingredient company like AAK.
You have been with AAK for 30 years. How would you say innovation has changed since you started with the company in the late 1980s?
It is like night and day, really. Thirty years ago we saw a quite fragmented food industry. There were the main bulk ingredients such as oils & fats and flour & starch, and there were functional ingredients like emulsifiers and hydrocolloids. Now, we look at it differently for a number of reasons, changing consumer demands being one of them.
An important turning point in our industry was the still often cited article by W.C. Willett, published in 1993 in the Lancet, which concluded that trans fatty acids had a negative impact on human health. These findings resulted, within a few years, in the phasing out of high-volume commodities like hydrogenated soy bean and rapeseed oil. At the same time we have seen consumers having an increased focus on ingredient lists, requiring much more functionality from each ingredient. Basic quality parameters like structure, shelf life, nutrition, and above all taste, have to be considered in each individual ingredient.
But of course technology also changes over 30 years. We have seen the entrance of biochemical process methods in our factories and even in the organisms producing the raw materials. Combining this with improved analytical methods gives us a much better insight in the chemical structures that we work with which gives us possibilities we have not yet seen the full impact of. In other words, there is still plenty of room and possibilities for innovation within our industry.
Today’s consumer market forces companies in the food industry to constantly introduce new products. How is this affecting an ingredient company like AAK?
Producing ingredients for a constantly developing food industry requires insights which we can only get by being close to our customers all the time and at all levels. Our customers are our eyes and ears in the consumer market and what we see and hear is that a new product can be new on many different levels.
For AAK this means that product development is done within different areas, for example on technology and products with new or improved functionalities, but also on new raw materials or improved and more sustainable sourcing of traditional raw materials. Whatever the case, the key thing is that the ingredient adds a feature to the final product that consumers find valuable. To achieve this is a constant journey to improve our total innovation process – from our interaction with the market all the way back to our raw materials and technologies.
Our customers are our eyes and ears in the consumer market and what we see and hear is that a new product can be new on many different levels.
You have a global responsibility for innovation at AAK. How is this work executed considering that taste preferences and trends vary from region to region?
Although there are a number of global trends, for example within nutrition, it is very important to notice that food preferences vary across the globe. At AAK we have always emphasized innovation close to our customers. In fact, the first footprint of AAK everywhere in the world is and has always been our Customer Co-Development teams. Innovations in the final food product can only be made in close cooperation between us as an ingredient supplier and the food manufacturer. Being close to the market also means living in the region, to be part of the regional taste preferences and notice emerging customer trends – not only as professionals but also privately. Besides working in this industry we are also consumers of the products that we deliver.
Innovation is one of five priority areas within AAK’s ongoing company program The AAK Way. How is this progressing?
I see a lot of progress, mainly in “making innovation part of everybody’s job”. Innovation was included in The AAK Way to ensure that it becomes more than just new product development and a technological exercise. Innovation means bringing novelty to work, not just to create novelty. This is done in several ways, by including business responsibilities in the leadership of the innovation project and by establishing tools to link the growing AAK organization together in an innovation community which can communicate and challenge each other’s insights to refine the ideas even further. We have projects for every step of the process. Each step has its challenges, and in each step we have initiatives to improve, from insights to implementation.
Innovation means bringing novelty to work, not just to create novelty.
What are AAK’s relationships with universities like? Are there any established collaborations?
When we initiated the more technical focus of innovation in our previous company program AAKtion, one focus area was to align our external cooperation. Working with external partners is a bit like marketing, you have to get share of mind before you get top of mind and you cannot be everywhere. We have a small network of partners with which we have ongoing dialogues and a number of external projects, mainly on the more basic technologies and knowledge development.
Where do you see innovation at AAK in the upcoming years?
AAK has always been, and will always be, a partner listening to our customers and responding to explicit needs and requirements. The aim of priority area Innovation within The AAK Way is to become more than that and we want to continue to challenge the established. The food industry these days is an amazing industry with new markets and constant changes resulting in new requirements and needs. Think about chocolate for example: markets with tropical climates have very different demands than the traditional ones and there are already activities in this area. We truly believe that there is much more to learn from these markets. We are right now working with the insights which will create new products in 3–5 years.
This article was first published in Insight #6, June 2018.