New Product Development in the Food Industry

The food and beverage landscape is rapidly evolving, driven by shifting consumer preferences, emerging market opportunities, and changing trends. Food and beverage manufacturers in the U.S. and worldwide face a host of pressures that demand a fresh approach to stay competitive.

New product development (NPD) and reformulation are pivotal in keeping these companies at the forefront of the food industry; however, the journey from concept to consumer is complex, marked by a failure rate ranging from 30% to 40%, according to a 2022 report published in the Journal of Marketing and Consumer Behaviour in Emerging Markets. (doi: 10.7172/2449-6634.jmcbem.2022.1.4) To launch to market quickly, companies must rapidly translate consumer insights into innovative products, source safe ingredients, and navigate the commercialization process while avoiding compliance issues that erode consumer trust.

Embedding compliance insights throughout the product development process can not only enhance innovation but also increases speed, collaboration, data utilization, productivity, and resilience. Additionally, taking a proactive approach to compliance can lead to stable and future-proof products that are capable of meeting ever-evolving regulations and customer requirements.

Navigating Product Development Challenges

Guarding against safety and compliance risks is critical for food and beverage brands, and the stakes are high; compliance issues can erode consumer trust and result in substantial costs, both as an immediate financial impact and for a brand’s reputation. The average cost of a product recall, including notification, product retrieval, storage, replacement, and destruction, can reach up to $10 million, while larger recalls can exceed $100 million.

The complexities of the global market have further amplified these risks. As supply chains expand and become more interconnected across borders, the integrity and transparency of these networks are tested. Natural disasters, geopolitical events, cyberattacks, and other disruptions are increasingly commonplace, with 56% of companies worldwide suffering some form of supply chain disruption each year, according to a 2022 report published in the Annals of Operations Research (doi: 0.1007/s10479-020-03912-1). Risks now cascade worldwide through supply networks, emphasizing the need for agility and resilience in product development, procurement, and compliance.

In this pressurized environment, the U.S. food and beverage industry is experiencing a surge in workload. This increase is straining processes and tools that were once effective. To adapt to this new landscape, innovative solutions are required to handle the heightened volume and complexity while providing superior quality, efficiency, and insights.

The Power of Regulatory Insight

Regulatory insight is the key to navigating this challenging terrain. In the current product development model, organizational silos often hinder efficient innovation. Compliance is viewed as an obstacle rather than an enabler, while manual processes slow down data sharing and impede productivity. Outdated systems are ill equipped to handle the ever-increasing complexity of requirements.

In addition, legacy workflows can also struggle to support the industry’s evolving needs. Rigid hand-off sequences between functions create bottlenecks that prolong development cycles, increase risk exposure, delay product launches, and affect revenue generation. Meanwhile, the late-stage discovery of compliance issues frequently leads to expensive modifications that eat into profit margins.

Compliant Design

To address these challenges, the food and beverage industry is turning to an approach called compliant design, which involves proactively embedding compliance checks and data-driven insights into the product development process—from the concept stage onward. Compliant design not only accelerates innovation but also reduces risk and improves opportunities for collaboration, leading to more stable and future-proof products.

By understanding today’s key regulations and anticipating those of tomorrow, brands can begin to think in the longer term, avoiding decisions that could lead to product reformulation shortly after launch. Improved tools and enhanced compliance visibility empower teams to make decisions that satisfy initial requirements, while also ensuring the ease of future compliance and increased sales through additional claims that enhance market opportunities.