At research center, Heinz pours over new ideas

updated 6:25 p.m. ET Jan. 13, 2008

WARRENDALE, Pa. - At a sleek office building outside Pittsburgh, garlic and vegetable aromas mingle in the air. Chefs handle frying pans behind industrial stoves and lab-coated technicians scoop morsels of food into their mouths.

It's a clinical staging area for what H.J. Heinz Co. hopes will become household favorites — packaged foods and condiments designed to please palates and entice shoppers across the United States and around the globe.

The Heinz Global Innovation and Quality Center, which opened about two years ago, has significantly bolstered the research and development capabilities of Heinz, one of the world's largest food companies.

Like other big food industry players, Heinz has invested heavily in product and packaging research in recent years. Companies such as Switzerland-based Nestle SA, the world's biggest food and drink company, have operated sophisticated research facilities for years. But more companies are now shifting their focus to product innovation, experts say.

And with commodity prices soaring, Heinz executives say their facility gives them new flexibility to adjust ingredients, lower costs and quickly adapt to consumer trends, such as a demand for healthier foods.

"Consumer tastes are still very local," said Ted Smyth, Heinz's chief administrative officer. "And you'll talk a bit about how they're ... a little bit more international, but we still like our recipes to be very locally tweaked, even in ketchup."

Catering to the culinary desires of consumers around the world has been vital for the Pittsburgh-based company, founded in 1869 and known best for its namesake ketchup. Sixty percent of its sales revenue comes from outside the United States.

Its products — from soups to baked beans and frozen entrees — are sold in more than 150 countries worldwide, and Heinz executives say that having local managers, brands and facilities has helped the company penetrate diverse markets.

Perched in the hills of southwestern Pennsylvania, the Innovation Center serves as a research hub for Heinz's global operations. Heinz carries out other research and development for canned foods in Britain and infant foods in Italy.

Heinz's chief executive, William R. Johnson, said when the center opened in 2005 that the company would dedicate nearly $100 million to product innovation in North America alone over the next five years.

The cost of making a product at the facility remains low because all the departments needed to develop a packaged food item are in one location, said Heinz spokesman Michael Mullen.

The center's 200 workers include food scientists, chefs, engineers, package designers and quality assurance specialists, among others. Some have been relocated to the center from other countries to help devise new food products.

Focus groups gather in rooms lined with one-way mirrors and surveillance equipment. Workers assess the taste and texture of experimental foods in laboratories. Packaging experts build three-dimensional models of containers or operate machines that simulate the wear-and-tear of trucks and other vehicles that might transport Heinz products.

Elsewhere at the center, employees run a so-called pilot plant — a scaled-down packaged food and condiment factory. A mock supermarket invites consumers to browse aisles stocked with Heinz and competing products while employees monitor them.

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