1

Disruptive Innovation: In and Out of the Baking

Industry

David W. Watson Vice-President, Engineering

Pepperidge Farm, International, Filling & Packaging Campbell Soup Company

Agenda •  Disruptive Innovation

–  Definition –  Examples outside of Food Industry

•  Disruptive Innovation within Baking Industry

•  Innovation – Systems, Tools, Technology - Robotic Technology/AGV -  Optical Sorting/X-ray -  Ohmic Heating/MATS -  Renewable Energy Technology

•  What Does the Future Hold?

So, What is Disruptive Innovation?

Disruptive Innovation is the introduction of new technologies, products or services that unexpectedly displace an established technology, product or service It often “disrupts” the status quo ………..Clayton Christensen, Harvard Business School

•  Companies often tend to innovate faster than their customer’s needs evolve

•  This leads to products or services often being too sophisticated, too expensive, and too complicated for many customers in their market

•  Allows companies to charge highest price to most demanding and sophisticated customers at top of market

•  This opens the door to disruptive innovation at the bottom of the market

•  And, in turn, providing customers at the bottom of the market access to product or service historically inaccessible

Theory Behind Disruptive Innovation:

Courtesy Harvard business School

Theory Behind Disruptive Innovation:

•  Sustaining Innovation relies on incremental improvements to an existing technology (continuous improvement)

•  Disruptive Innovation is risky, often low margin initially, and may not have a practical application in the early stages

2

Disruptive Innovation •  Model T Ford

•  Personal Computers

•  Mini Steel Mills

•  Tablet Computers

•  Digital Photography

•  Email

•  Cellular/Mobile Phones

•  Cloud Computing

Disruptive Innovation

In summary, Disruptive Innovation disrupts the status quo, where Sustaining Innovation relies on incremental change But, more importantly Disruptive Innovation, while risky, opens up the market to a whole new group of customers through:

•  Product or Packaging Innovation •  New Process and Packaging Technologies

Agenda •  Disruptive Innovation

–  Definition –  Examples outside of Food Industry

•  Disruptive Innovation within Baking Industry

•  Innovation – Systems, Tools, Technology - Robotic Technology/AGV -  Optical Sorting/X-Ray -  Ohmic Heating/MATS -  Renewable Energy Technology

•  What Does the Future Hold?

Dough Mixing Systems •  Early dough mixing was performed by hand •  As higher volume bakers required more efficient dough mixing

systems, other types of mixers were developed, including horizontal and continuous

Examples of Disruptive Innovations Within the Baking Industry

Examples of Disruptive Innovations Within the Baking Industry

Bread Divider/Rounder/Moulder

•  Rack/Continuous Proofer

• Tunnel Oven

Examples of Disruptive Innovations Within the Baking Industry

3

Agenda •  Disruptive Innovation

–  Definition –  Examples outside of Food Industry

•  Disruptive Innovation within Baking Industry

•  Innovation – Systems, Tools, Technology - Robotic Technology/AGV -  Optical Sorting/X-ray -  Ohmic Heating/MATS -  Renewable Energy Technology

•  What Does the Future Hold?

Robotics and Automation

Robotics represent one of the best examples of Disruptive Innovation

•  Early Robot systems were pioneered for heavy industrial applications – primarily in the automotive industry

•  These robots were designed for relatively slow moving applications, and used to primarily replace manual labor

•  The robot industry was dominated by a few large players

Robotics and Automation

SCARA Robot 60 picks per minute

•  Early SCARA type robots were often too large, too slow, and too expensive for most food applications

•  This provided an entry for new robot technologies that now dominate for high speed pick and place applications

However, speed and flexibility were required to meet the needs of applications outside of the automotive industry

130-150+ picks per minute

Robotics and Automation Thanks to Disruptive Innovation, the baking industry

now has a cost effective solution for automation

Examples: •  Pan and lid systems •  Bread basket loading •  Tray/Carton loading •  Scoring of artisan breads

Robotics and Automation What’s Next?

New robot systems currently in development will open up another new set of customers and have new capability:

•  No safety cages – advanced sensors detect people and trigger a stop or slow down of the arm

•  No programming required – GUI or direct manipulation of arm

•  Adaptive capability – ability to “learn” and adapt to changing conditions

Automated Guided Vehicles (AGV) •  First AGV’s were developed in 1953 by Barrett Electronics

•  Early systems relied on wires buried in the floor for guiding the vehicle and were costly

•  Laser Guided Vehicles are most widely used today

•  Many applications from warehousing to transporting WIP to handling retort baskets

•  Track and Trace capability – batch ID, time stamp, etc.

4

•  Contamination detection •  Measure fill levels •  Measure head space •  Seal inspection/integrity •  Missing or broken pieces •  Component counts •  Fat Analysis (DEXA)

X-ray Technology

Applications for X-ray:

Early X-ray technology targeted applications outside of the food industry. The systems were expensive and not designed for a food plant environment

•  Ferrous Materials •  Non-Ferrous Material •  Stainless Steel •  Stones •  Glass •  Wood •  High Density Plastic •  Bone

X-ray Technology X-ray Systems are capable of detecting foreign material through foil and metallized film

Can Inspection *

•  Dents •  Upside down cans •  Seam irregularities •  Trim-ring detection

•  Fill level – product fill height •  Air pocket in product •  Checkweighing •  Head space verification

Precise Fill Level Inspection

The center beam of the Trio captures a head X-Ray image of the container, allowing for precise fill level detection.!

!

The difference in fill between the images shown above is less than 5 grams in an 8 ounce glass jar. The inspection area (dotted line rectangle bracketed by yellow dashed line) can be adjusted vertically and horizontally for optimal fill control.

"

X-ray Technology – Can and Bottle Lines

Speeds Up to 2,400 containers per minute

Optical Sorting

Optical sorting systems are used to detect color variation, foreign objects, and quality issues of products at high speed

•  Potatoes: Potatoes, French Fries •  Vegetables: Carrots, Beans, Corn, Peppers, Peas •  Fruit: Cranberries, Diced Pineapple

Optical Sorting Some Current Applications:

Fruit •  Cranberries •  Diced Pineapples

Nuts •  Almonds •  Cashews •  Macadamia •  Peanuts (in shell)

Potato Products •  French Fries •  Whole Potatoes Vegetables •  Carrots •  Corn •  Green Beans •  Peas •  Peppers •  Lettuce

Ohmic heating is an advanced thermal process where food material, which acts as an electrical resistor, is heated by passing electricity through it

Ohmic Heating Technology

5

Ohmic Heating Technology

•  Faster heating rate than conventional sterilization processes

•  More uniform heating for heavily garnished products

•  Widely applied in the dairy industry for processing of milk and milk products

•  Process for fruit juices and aseptic soups with large particulate

•  Fruit and vegetable peeling is emerging application

•  Blanching, thawing, dehydration next area of opportunity

MATSTM Microwave Assisted Thermal Sterilization

•  MATS™ is a new, patented, and FDA-approved technology developed by Washington State University (WSU)

•  The packaged food is immersed in pressurized hot water while simultaneously heating it with microwaves

•  Can reduce process time for typical sterilization processes by 80% (versus retort):

•  Improved retention of nutrients •  Improved taste and texture •  Improved visual appeal of food

High Pressure Processing utilizes ultra-high pressures to destroy pathogens without the application of heat that can damage the taste, texture, and nutritional value of the food

•  Foods are subjected to pressures up to 100,000 psi, which destroy pathogenic microorganisms by interrupting their cellular functions

•  Reduced process times; minimal heat damage; retention of freshness, flavor, texture, and color; and no vitamin C loss

High Pressure Pasteurization

Renewable Energy Opportunities

Wind Turbines Solar Energy

•  Installations of Solar, Wind and other renewable energy technologies are becoming more common as companies strive to meet sustainability goals

•  Power Purchase Agreements and Leases can be a strategy to meet internal investment hurdle rates

Biogas

Renewable Energy Opportunities Fuel Cell Technology

1.2 MW Fuel Cell 250 KWh Fuel Cell

What does the future hold?

6

Cornucopia is a concept design for a personal food factory. In essence, it is a three dimensional printer for food, which works by storing, precisely mixing, depositing and cooking layers of ingredients.

Digital Gastronomy - Cornucopia

Summary

•  Disruptive Innovation disrupts the status quo and often displaces current incumbents and market leaders

•  The baking industry has a history of disruptive innovations and has taken advantage of technologies originating from outside of the industry

•  Emerging technologies in one industry can lead to a disruptive innovation in another

•  The question now is – what is the next disruptive innovation?

Thank You