New products are back but not without some hurdles to clear. In this issue of Baking & Snack, you’ll find the latest study in our State of the Baking Industry series: Product Innovation & Development. We initially conducted this survey with Cypress Research in 2022 to measure how the pandemic impacted product development and how it was recovering. Back then, recovery was slow, and most R&D teams were focused on reformulating existing products in light of the supply chain and cost challenges that followed the pandemic. 

This year, however, we have a much more optimistic outlook. As you’ll see in my report, “Bouncing Back,” the two categories of new product development that take the most resources — Innovation, new products in existing brands, and Invention, breakthrough product development — are approaching their pre-pandemic levels, signaling a significant recovery in these efforts. Renovation, or reformulating existing products, however, remains strong, with 73% of baker respondents saying it is important to their R&D initiatives in the next 12 to 18 months. Compare that to only 58% who said Renovation was important pre-pandemic. 

Some pressures that were high in 2022 have eased: increased focus on operations, reduced internal R&D resources and access to ingredients, for example. This allows more time and energy to pour into R&D work. However, these haven’t completely evaporated, and their effects linger. More baking companies are reporting an R&D budget and staff that have remained the same. While ingredient costs have come down from their post-pandemic highs, they still haven’t returned to pre-pandemic lows. And the labor crunch is putting a significant strain on every aspect of bakery manufacturing, and R&D is not exempt. 

I believe these lingering pressures are what have kept Renovation on the radar of R&D teams as they continue to find ways to cut costs. These Renovation projects can be implemented faster than developing something entirely new, as Penny Patterson-Smith, chief innovation officer, Flowers Foods, Thomasville, Ga., explained in our webinar, “State of the Baking Industry: Product Innovation & Development,” which is available on-demand at www.bakingbusiness.com. And by pivoting to other ingredients that are more readily and consistently available or less expensive, bakers can lower stress and save money. 

Renovation’s growing place in product development strategies also speaks to the dominant force of the clean label trend. An incredible 79% of study respondents said clean label was influencing product development for the next 12 to 18 months, a full 26 points ahead of the second biggest trend reported, convenience. As consumers continue to prioritize their health and transparency, reformulating away from ingredients they deem unacceptable will remain a top priority for product developers for the foreseeable future.