KANSAS CITY — Food companies this year are launching new products and inventing new brands more so than they were two years ago, when supply chain disruptions and demand for food at home brought on by COVID-19 made keeping items on retail shelves the main goal. However, cost remains a major focus in 2024.

“During the pandemic, everything was just complicated, whether that was supply chains that were complicated, labor that was complicated and many, many different types of things,” said David VandenEinde, vice president, group R&D leader for food solutions America, Cargill, in a Sept. 26 Food Business News webinar. “What we saw coming out of the pandemic was the effort to take complexity out of the system, take volatility and complexity out of the supply chains.”

During the pandemic, many companies cut back on the number of their stock-keeping units (SKUs), but strategies have changed over the past two years.

“As you get away from being eaten alive from complexity, and you get stability, and you can get the ability to focus on growth, you will have more SKUs coming back in because you will be targeting your consumers and where they are and what they’re actually looking for,” VandenEinde said.

A product innovation survey by Cypress Research for Food Business News showed a return to innovation and invention. The survey took place in March and April and involved food processing industry professionals completing a total of 224 surveys.

How important are the following food science-related initiatives to your company during the next 12-18 months?
Source: Sosland Publishing Co. 

Participants were asked how important innovation, renovation and invention would be to their companies over the next 12 to 18 months on a one-to-five scale with five being “extremely important.” Innovation referred to new products within existing brands and categories as well as line extensions. Renovation meant product reformulation within existing brands and categories. Examples of invention were breakthrough product developments typically involving the introductions of new brands and/or processing.

In this year’s survey, 67% gave invention either a four or a five, which compared to 59% in the 2022 survey.

“The biggest change we’ve seen here during the past two years is the share of professionals assigning a four or a five,” said Marjorie Hellmer, president of Cypress Research.

The survey also asked what issues will influence their companies’ product development and R&D strategy over the next 12 to 18 months. Cost reduction was the top answer at 59%, followed by clean label at 53% and convenience at 50%. Nearly half (49%) said ingredient costs had increased more than 10% over the past 12 months.

Another question asked what ingredients would receive priority in new product invention or innovation over the next 12 to 18 months. The top answer was whole grains at 15%, followed by ingredients to reduce calories, organic ingredients and dietary fiber, all three at 14%. Eight other ingredients ranged from 10% to 13%.

Source: Sosland Publishing Co. 

“There is no silver bullet,” VandenEinde said. “There is not one of these (ingredients) that drives an outcome of super significance against the many different jobs to be done that consumers have identified around health and wellness. (The ingredients) all have different value propositions, and they all bring different things. So, while I think there is some definite formation in what the health and wellness trends are, there is less formation or solidification in terms of what is the way in which to solve those. There are many routes to getting after those.”

VandenEinde emphasized the continued need for a reliable supply chain, adding that new technologies like precision fermentation and cellular meat, also known as cultivated meat, may help.

“Invention is going to be called upon more and more to solve those problems, which is to stable out that volatility and give me new ways of surety of supply,” he said.

To view the full webinar on demand, please click this link.