TraceGains, a company operating in integrated compliance, nutritional calculation and labeling, and new product development (NPD) software for the food and beverage industry, released its latest survey report, R&D and Product Innovation in the Food and Beverage Industry. Based on responses from more than 250 global food and beverage leaders, TraceGains found that despite outdated manual processes being a challenge for many brands, 76% are planning to up their NPD spend in 2024, a 12% jump over last year when 64% invested in product development. Brands are also walking the talk when it comes to ESG initiatives. Following a rise in ESG awareness from 64% in this August 2023 report, 44% are now prioritizing supply chain traceability, 42% are using sustainable ingredients, while 48% believe sustainable packaging will be a large innovation driver in the months ahead.
Amid signs of progress after a few challenging years for the food and beverage supply chain, brands are planning to dial up product innovation efforts to meet consumer demand (42%), combat rising costs (46%), and stay competitive (51%). Even with their enthusiasm, however, 56% of brands reported a lack of internal tools to manage product formulations and recipes, highlighting a clear need for solutions to help automate and streamline work.
Other key findings from TraceGains' latest report include:
- Brands are still concerned over macroeconomic factors that could impact their planned investments, from rising production and labor costs (58%), fluctuating demand and commodity pricing (53%), availability of ingredients and materials (46%), challenges with talent acquisition (36%) and a lack of regulatory clarity (28%).
- When it comes to managing product formulas and recipes, over one-third (37%) of brands still rely on manual processes, 25% are struggling with staffing challenges, and 23% acknowledge working on outdated technology platforms.
- Brands recognize that harnessing AI is critical to stay competitive: more than one-third (36%) are already testing the waters for NPD. Another 53% are considering AI for sourcing ingredients and materials, as well as formulating products.
- Many brands are opting to keep portions of the R&D process in-house to protect recipe formulations and intellectual property (IP), including product concept ideation (70%), recipe formulations (74%), ingredient selections (70%), product development (73%) and packaging (57%).
- More than half (60%) of brands think "better for you" formulations will be the main innovation driver in the months ahead.
