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TraceGains, the leading provider of compliance, quality, and innovation solutions for the food and beverage (F&B) industry, has officially published the results from its latest survey i.e. R&D and Product Innovation in the Food and Beverage Industry.
Going by the available details, these published findings tread up a long distance to reveal that, while 83% of all surveyed brands plan to boost new product development (NPD) spend this year, no more than 2% said their product development processes are fully digitized.
More on the same would reveal how the stated annual report actually builds upon its 2024 counterpart, which had revealed that 76% of brands planned to increase innovation investment. In that regard, we referred to how stated number has markedly increased to 83% this year, but what we haven’t yet is that over half of respondents are even planning to raise budgets by more than 10%.
Talk about the entire lowdown on a slightly deeper level, we begin from a piece of detail claiming that more than 82% of brands still use manual tools like spreadsheets, paper documents, or email to manage NPD, whereas on the other hand, well over half (53%) don’t use a Product Lifecycle Management (PLM) system at all. Both the factors like you can guess contribute heavily towards their sluggish speed to market, increasing compliance risk, and hindering cross-functional collaboration.
Next up, an estimated 17% of brands were deemed as “all in” on using AI to power NPD, up from 10% in 2024. Alongside that, a contingent of 45% was understood to be in that experimenting phase, while only one third (32%) remain skeptical, dropping from 44% recorded during the year of 2024.
Out of the all the surveyed organizations, mid-sized companies (1,000-5,000 employees) are leading adoption, with smaller and larger firms showing more hesitation.
Beyond that, 25% of respondents cited analyzing market trends and consumer insights as their top AI use case. Having said so, nearly 70% of brands consider macroeconomic conditions as their top innovation barrier, up 15 points from 2024.
Almost like an extension of it, well over half (53%) say production costs, including labor, are a major concern. If we move past them, we’ll reach upon those 50% of respondents who are still struggling to secure key ingredients and materials.
As for the brands reducing their innovation pipeline, 41% of attribute it to financial uncertainty and margin pressure.
Despite the uncertainty, though, brands remain focused on better-for-you and sustainable innovation. The same is made evident by the fact that more than 67% of respondents, up from 60% in 2024, named healthier food as their top priority, which was closely followed by sustainable packaging (41%) and personalized nutrition (289%).
Against these formulating trends, enthusiasm for plant-based products shown itself to be waning, with only 19% of brands identifying it as a top innovation focus, down sharply from 33% in 2024.
Moving on, 48% of all surveyed respondents confirmed they are working to improve supply chain traceability, 38% said they are sourcing more sustainable ingredients, and 41% revealed how environmental goals are influencing packaging decisions.
Founded in 2008, TraceGains’ rise up the ranks stems from its Source-to-Shelf global business ecosystem, powered by AI, which can digitize compliance, audits, labeling, product development, ESG, and packaging processes into integrated modular solutions that, in turn, give customers efficiencies and a competitive edge.
The company’s scale and excellence in what it does can also be contextualized once consider it serves more than 1,500 brands across the globe, including half of the top 100 food and beverage manufacturers. TraceGains’ network also connects buyers, suppliers, and service providers at 90,000 supplier locations to ensure smooth transit for 600,000 ingredients.
“We’re pleased with the results of this year’s report showing genuine excitement around AI and digital transformation,” said Paul Bradley, Senior Director of Product Marketing at TraceGains. “The downside is that progress is being throttled by outdated workflows and a lack of automation. Amid intense pressure to compete by offering healthier, more sustainable products the majority of brands still operate in the stone age managing product development with emails, spreadsheets, and paper files.”
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