A SAVORY CHEESE BASED SNACK. Presented to The National Dairy Council New Product Competition

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Beverly McDowell
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1 A SAVORY CHEESE BASED SNACK Presented to The National Dairy Council New Product Competition

Product Description Figure 1. Product breakdown of our SunBites. SunBites is a bite size, savory cheese cluster snack comprised of tangy cheddar cheese crackers and crunchy dairy crisps.

2 Product Description Figure 1. Product breakdown of our SunBites. SunBites is a bite size, savory cheese cluster snack comprised of tangy cheddar cheese crackers and crunchy dairy crisps. The cheese cracker pieces are made with real cheddar cheese, yogurt, flour, milk protein concentrate, whey permeate, and carrageenan (Figure 1). The dairy crisps are extruded milk protein puffs with a light, airy, and crunchy texture. These two components are bound with acacia gum and flavored with a cheese flavor blend. Overall, one cluster is comprised of roughly 57% dairy and contains 11.7 g of protein per serving size of 30 g, making our product an excellent source of protein. Our cheesy snack is designed for convenience due to its unique, innovative shape, and shelf stability, making it ideal for on-the-go snacking. Our clusters are completely vegetarian and have the possibility to be gluten-free with future line extensions. 2

3 REAL Seal Our product, SunBites, is eligible for the REAL Seal, which is proudly displayed on our packaging. All the dairy components used in making our cheese clusters are sourced from U.S. processing facilities using U.S. produced cow s milk that fall under the Code of Federal Regulations (CFR) by the Food and Drug Administration (FDA). SunBites also does not contain any dairy component replaced with vegetable proteins or oils or any imported dairy products or products containing imported dairy ingredients. All labeling is specified and regulated by the FDA. Dairy Ingredient Functionality Our dairy snack is comprised of two main components: crackers and crisps. The cluster formulation is presented in Table 1, with the functionality of each ingredient. According to our formulation, SunBites is made of 57.1% dairy ingredients, which include: milk protein crisps, cheddar cheese, Greek yogurt, milk protein concentrate 85, and whey permeate. Table 1. SunBites cluster formulation with ingredient functionality. Ingredient % Formula Functionality Milk Protein Crisps Dairy protein and crispy texture Sharp Cheddar Cheese Dairy protein, fat, flavor, and moisture Fat Free Greek Yogurt Dairy protein, and water for cracker dough formation and carrageenan solubilization Wheat Flour Cracker dough structure Water Solvent for acacia gum Cheese Flavor Mix 8.02 To improve the overall flavor profile Acacia Gum 5.62 To bind the two main components of the clusters: crackers and crisps Milk Protein Concentrate Dairy protein Salt (NaCl) 0.73 Flavor enhancement, dough strengthening Whey Permeate 0.71 Dairy bulking agent Baking Powder 0.69 Leavening agent Carrageenan 0.06 To improve the quality of the dough over time by decreasing hardness rate 3

4 Process Description The production process of the clusters will consist of two main steps: cracker preparation and cluster formation. Mixing and Baking the Crackers: First, all the ingredients will be weighed separately. The dry ingredients (except for the cheese flavor blend, acacia gum and carrageenan) will be mixed together with the cheddar cheese in a grinder, to decrease cheddar cheese particle size and to evenly disperse it in the dough. The yogurt, previously mixed with carrageenan, will then be added to form the wet dough. The dough will be rolled into sheets 2 mm (0.078 in) thick, cut into equal rectangles (0.19 in x 0.39 in = 0.5 cm x 1 cm) and pierced to create a center hole, then baked at 300 F (149 C) for 20 minutes. The crackers will then be cooled down and weighed selectively. Gum Hydration: The binder will be obtained by mixing water with pre-hydrated acacia gum. Cluster Formation: The crisps, the cheese flavor blend, the binder, and the crackers will be mixed in a drum before being spread evenly on a conveyor with a rake. The mixture will be poured into round shaped molds to achieve the desired shape and will be baked at 250 F (121 C) for 15 minutes. Packaging: After cooling, the clusters will be separated from the molds and automatically weighed by the packaging machine and portioned into bags. Then, the bags will be flushed with an inert gas, such as nitrogen, and heat sealed. Finally, the bags will go through a metal detector before being packed into boxes and stored at room temperature until shipping. 4

5 Marketability and Target Market The snack category, specifically, the salty snacks, had been increasing in sales, up to 30%, from 2011 to 2016 and are expected to continuously increase by 2021 (Bryant, 2017). Salty snacks are considered a household staple due to the frequency of purchasing, with motivating buying factors such as meeting consumer demands and innovation. Cheese snacks in particular have had positive growth from 2011 to 2016, resulting in a 25% increase. Consumers have also noted that they usually have cheese snacks to satisfy a craving and as a treat (Bryant, 2017). Our target market focuses on the working individual, specifically millennials and Generation X, who are busy and might not have the time to have a complete meal and need an energy boost in the middle of the day. According to Fromm (2017), "millennials are more likely than any other generation to snack four times a day"; in the same way, millennials consider snacking a necessity. Additionally, consumers are consciously trying to buy better-for-you snacks, or snacks that have some sort of health benefit. According to Mintel, consumers have said that the top two claims that are most important to them when purchasing healthy snacks are low/no sugar and good source of protein (Averbook, 2017). Most high protein, energy/granola bars, other than meat snacks, are usually sweet and sugar focused. Our savory cheese clusters are an excellent source of protein, with no added sugar, that will satisfy hunger and cravings. Our market strategy will be to roll out our products to retail locations and e-commerce sites. As a growing company, to help alleviate retailer margins while expanding our reach, our products will first sell through the SunBites personal website and other e-commerce networks, such as Amazon. SunBites will slowly build a market starting from our central location, targeting local storefront retail locations, before pursuing larger established retail channels. These include grocery stores such Safeway, Wegmans, and Publix, as well as specialty and health food stores such as Whole Foods. 5

In order to assess the feasibility of our product in the market, we performed a SWOT (Strengths, Weaknesses,

According to Figure 2, SunBites has great potential as a savory and high-protein snack, aligning with the

protein low calories Opportunities SunBites Consumers demand for better-for-you products is rising Little

gluten as allergens New product category unknown to the consumer Threats Competition: Beef jerky Vegan

6 In order to assess the feasibility of our product in the market, we performed a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis. According to Figure 2, SunBites has great potential as a savory and high-protein snack, aligning with the better-for-you trend that is in high demand (Amplify Snack Brands and the Center for Generational Kinetics, 2017). In terms of weaknesses, our product introduces a new category, unknown to the consumers who might be wary of its innovative shape and bold looks. Strengths Uniqueness: shape & texture savory protein snack vegetarian Nutritional Value: excellent source of protein low calories Opportunities SunBites Consumers demand for better-for-you products is rising Little competition on savory protein snacks market Gluten free alternative Weaknesses Not vegan Contains milk and gluten as allergens New product category unknown to the consumer Threats Competition: Beef jerky Vegan products like Snapeas Reaction from other companies that might start offering similar products Figure 2. SWOT analysis of SunBites. National Dairy Council Consumer and Marketplace Insights For a product to succeed in the snack market, we must appeal to the modern snacking consumer, creating a desirable product that incorporates necessity, innovation, and most importantly, taste. From the consumer and marketplace insights of the National Dairy Council (Dairy Management Inc., 2017), the three key drivers of modern snacking are: nourishment, pleasure, and optimization. 6

In contrast, optimization refers to snacks that enhance performance or optimize physical and mental needs, such as coffee, energy bars, sports drinks, and so on.

7 Nourishment refers to snacks that reflect the need for daily sustenance, wellness, and health, such as yogurt, granola bars, or smoothies. Pleasure, the indulgent category, contains products like chips, chocolate, candy, and soda which fulfills cravings with satisfying flavors and tastes. In contrast, optimization refers to snacks that enhance performance or optimize physical and mental needs, such as coffee, energy bars, sports drinks, and so on. Our product, SunBites, aims to meet all 3 key drivers. Targeting nourishment, the excellent source of protein will aid with hunger abatement, since protein provides satiety. As a tasty cheesy snack, our product provides variety, uniqueness in texture, and a good savory taste as part of the pleasure snacking category. Lastly, our product falls under optimization as a shelf stable, portable, high protein and low sugar snack to provide energy for on-the-go needs. Sensory Evaluation In order to improve our product in accordance to consumer s preferences, we conducted two consumer studies at a Sensory Evaluation Center. Our studies focused on acceptance, and preference and were evaluated by over 80 consumers (Figure 3). Figure 3. SunBites Sensory evaluation. 7

8 In our first study, we tested two formulations: A that had the flavor embedded in the composition, which will be also referred to as original, and B, which was covered in cheese flavor powder. Our sensory data analysis was done based on a Top 3 Boxes (T3B) and Top 4 Boxes (T4B) scoring scale. The T3B scale includes Like extremely, Like very much, Like moderately, while the T4B scale includes all of the T3B scale and Like slightly. On the T3B scale, Version A was appreciated by more than half of the consumers for flavor (57%), texture (62%), color (60%), and appearance (52%), scoring an overall likeness of 59%. The penalty reports ran on the results guided us towards creating a new formulation, C, which is based on A but aimed to improve texture and flavor, in accordance with the feedback we received in our previous evaluation. Our second study compared the initial version A (the same formulation as in our previous consumer test), with formulation C. Our second panel was composed of 94 consumers. Formulation C was modified to increase cheese flavor and to improve its crispy texture. The improved formulation scored an overall liking of approximately 80% on a T4B scale. The paired preference analysis showed that version C was appreciated by 57% of the consumers due to its stronger flavor and better color, as opposed to 43%, who preferred the original A, due to its slightly less harder texture. This difference was not statistically different at 95% Level of Confidence. Based on our analysis on consumers open ended questions we found two separate market segments: those who prefer milder cheese flavors and those who prefer stronger cheese flavors. It was also found that more consumers preferred the texture of version 'A' more than that of version 'C', as confirmed by the data shown by Figure 4. However, considering overall acceptability for C, and the fact that its only weakness was texture, we are confident that after improving this aspect, formulation C would be optimal for launching. 8

Our product matches well with these categories, since it has a cheesy flavor (61% T3B), a protein content of 38.

9 Figure 4. %T3B consumer acceptability as shown by the second sensory evaluation. When asked what the major criteria are for buying snacks, our consumers selected tastiness (32%), nutrition facts (22%), and ingredient list (15%), as shown in Figure 5. Our product matches well with these categories, since it has a cheesy flavor (61% T3B), a protein content of 38.3%, which makes it an excellent source of protein, and only 120 calories per serving. Moreover, our data shows that 83% (T3B) of the participants in this study would be open to buy the product in the future. Figure 5. Factors that impact consumer purchase decision for snacks, according to our second sensory study. 9

10 Packaging Our packaging s bright and bold colors are engaging and inviting, attracting consumers to our product (Figure 6). The packaging also highlights our SunBites clusters while showcasing the REAL Seal and that our products are made with real cheese. To preserve the cheesy flavor and crispy texture of our cluster bites, the finished product will be packed in opaque PET pouches to protect from moisture migration and covered from light and flushed with nitrogen gas to prevent possible lipid oxidation. Figure 6. SunBites packaging front label and nutritional information. Our SunBites have a serving size of 30 g, or 1.06 oz., which provides 120 Calories. Each serving size corresponds to roughly 20 cluster pieces, and contains around 12 g of protein, more than 20% of the Daily Reference Value, making one package an excellent source of protein. The Nutrition Facts label will be included on the back of our packaging, as well as our ingredient list and allergen (wheat and milk) declaration. 10

11 The ingredient declaration will be as follows: Ingredients: Protein crisps (Milk Protein Isolate), cheddar cheese (milk, cheese culture, salt, enzymes, and annatto), Greek yogurt made with skim milk (skim milk, cultures), enriched flour (wheat flour, malted barley flour, niacin, iron, vitamin B 1 [thiamine mononitrate], vitamin B 2 [riboflavin], folic acid), natural flavors, gum acacia. Contains 2% or less of milk protein concentrate, salt, whey solids, leavening (monocalcium phosphate, sodium bicarbonate, and corn starch), Yellow 5, carrageenan. CONTAINS WHEAT AND MILK INGREDIENTS. Pricing Our SunBites will come in individual serving packs of 1.06 oz. and sold for retail at $1.52 or in a larger, sharable 3.17 oz. package, which contains 3 servings and sold at $3.18. Our ingredients, packaging, and manufacturing costs are detailed in Table 2, also showing the price margin for each channel (producer, broker, distributor, and retailer). The individual serving sizes will be perfect as onthe-go snacks for our target market of working, busy individuals. Our larger, sharable size will be ideal for families and portioning out for multiple snacks or meals. Table 2. Price breakdown for a 1.06 oz. and 3.17 oz. package. Item 1.06 oz oz. Ingredient Cost $0.17 $0.50 Packaging Cost $0.17 $0.21 Cost of Ingredients and Packaging/Unit $0.34 $0.71 Manufacturing Cost (30% Margin) $0.49 $1.01 Producer s Price (20% Margin) $0.61 $1.27 Broker s Price (5% Margin) $0.64 $1.33 Distributor Price (30% Margin) $0.91 $1.91 Retailer Price (40% Margin) $1.52 $

12 Safety The safety of our SunBites is of upmost importance to maintain the quality and optimize our product. To control for food safety and minimize risk, a Good Manufacturing Practices (GMPs) and a Hazard Analysis and Critical Control Point (HACCP) program will be implemented and upheld. Prerequisite programs, additional support programs (supplier control and specifications), ingredient inspection, allergen control, traceability and recall plans will be strictly applied and monitored. Prerequisite programs will cover our GMPs, and includes procedures for maintaining safety of water, good conditions and cleanliness of food contact surfaces, preventing cross contamination, maintaining hand washing and toilet facilities, protection from adulterants, labeling, storage, and proper use of toxic compounds, employee health conditions, and exclusion of pests. The SunBites HACCP plan is as detailed below in Appendix II. Shelf Life Our SunBites clusters have a water activity of 0.263, and no microbial proliferation should occur at a w < 0.61 (Tapia, Alzamora and Chirife, 2008). Therefore, shelf life is determined mainly by changes in texture and/or lipid oxidation. Follow up studies for a w, ph, and texture (mentioned in Challenges Overcome section) were run to assess for any changes of the crackers and the clusters for every formulation attempted, especially A and C. Table 3 presents the average a w and ph for two cracker formulations (n=3) and two cluster formulations (n=2) at day 1 of storage. Table 3. Water activity and ph after 1 day of storage of crackers and clusters from formulations A and C. Sample a w ph Cracker Formulation A Cracker Formulation C Cluster Formulation A Cluster Formulation C

13 Water activity behavior up to 4 weeks of storage of crackers and clusters is shown in Figure 7. It was observed that a w was kept < 0.4, and that clusters have a higher a w than crackers due to the addition of the binder agent (acacia gum) dissolved in water. The average ph through 4 weeks for both formulations, A and C, was Figure 7. Water activity during storage up to 4 weeks of crackers and clusters made using formulations A and C. Shelf life is estimated to be at least 5 months if product is unopened and stored at room temperature, with hardening of the crackers as the critical factor. Challenges Overcome As with any new product concept and development, our SunBites have gone through multiple iterations and have faced many obstacles in our goal to improve and perfect our product. In the creation of SunBites and from our sensory study analysis, we focused on improving texture and aesthetic features while optimizing our efficiency. Our challenges have been detailed in the following points: 13

14 Cracker Texture Improvement: Cracker hardness was decreased by adding carrageenan to the formulation and by punching a hole in the cracker dough before baking. Figure 8 shows how texture for formulation C cracker was closer to the behavior of a commercial cheese cracker than formulation A. Figure 8. Cracker texture analysis of formulations A and C compared to a commercial cheese cracker. Cracker Color: Due to differences in color of the cracker in the same baking sheet, baking was restricted to the center part of the baking sheet only. Decreased Binder Agent Time Preparation: Regular acacia gum was replaced by a pre-hydrated acacia. Differences in Texture within Clusters for Sensory Studies: During our first sensory study, we noticed a few consumers mentioned that the cracker part of the cluster was soggy. It seemed like some crackers gained moisture and/or did not bake evenly. It was suspected that moisture gain could have been due to sample storage conditions, since they were stored overnight on baking trays covered with plastic wrap. For the second sensory study, we monitored the cracker baking time closely during sample preparation and clusters were stored overnight in heat sealed plastic bags to protect from moisture migration. 14

15 References Amplify Snack Brands and the Center for Generational Kinetics. (2017 April). Better-For-You Snacks: The New Snacking Reality Snacking trends. Retrieved March 31 s, 2018 from Averbook, M. (2017 September). Better for You Snacks US. Retrieved January 12, 2018 from Mintel database. Bryant, C. (2017 April). Salty Snacks US. Retrieved January 12, 2018, from Mintel database. CFR - Code of Federal Regulations Title 21. (n.d.). Retrieved January 13, 2018, from Dairy Management Inc. (2017 August). New Product Competition 2018 Challenge: Develop a dairy-based snack that answers the evolving needs of today s snacking consumer. Fromm, J. (2017 February). What Brands Need To Know About Modern Millennial Snack Culture. Retrieved April 1, 2018, from Guidelines for REAL Seal Use. (n.d.). Retrieved January 13, 2018, from Tapia, MS, Alzamora, SM, Chirife, J Effects of Water Activity (aw) on Microbial Stability: As a Hurdle in Food Preservation. In GV Barbosa-Cánovas, AJ Fontana Jr, SJ Schmidt, and TP Labuza (Eds.), Water activity in foods (239-). Ames, Iowa: Blackwell Publishing. 15

16 Appendix I: Process Flow Diagram 16

17 Appendix II: HACCP Plan 17

18 Appendix III: Product Photograph 18

National Dairy Council New Product Competition

National Dairy Council New Product Competition Presented By: Rebecca Cheng, PhD Student (Captain) Andreea Beldie, MS Student Ana G Ortiz-Quezada, PhD Student Advisory Council Presentation April 22, 2018