If 2025 was the year food and beverage brands recalibrated, 2026 will be the year they reinvent. The latest TraceGains NPD Report reveals that the future of innovation rests on a powerful convergence—reformulation, sustainability, and AI—what TraceGains experts are calling the “Triple Threat” shaping food & beverage predictions for 2026.

As global trade turbulence, cost pressures, and shifting consumer expectations collide, F&B companies are being pushed to adapt faster than ever. The brands that succeed won’t just launch new products; they’ll rethink how those products are designed, sourced, and brought to market.

With a global ecosystem that connects thousands of brands, suppliers, and regulatory data sources, TraceGains leaders have a unique vantage point on where the industry is headed next—and how innovation will evolve in 2026.

Each year, the TraceGains NPD survey captures how F&B leaders are adapting to a rapidly changing market—and for the third consecutive year, results show that innovation investment is surging. In 2025, 83% of brands said they plan to increase their innovation budgets, underscoring a collective push toward smarter, leaner, and more resilient product development in an unpredictable global landscape.

“In 2026, the triple threat of reformulation, sustainability, and AI will define the next era of food and beverage innovation. TraceGains’ NPD research revealed that these three forces are shaping how brands adapt, invest, and compete, with each driving progress, speed to market, and smarter strategies across the industry. Reformulation will remain the frontline response to rising costs and shifting regulations. Sustainability will evolve from aspiration to action, driving greater transparency and collaboration across sourcing, packaging, and supply chains. And AI will become the ultimate accelerator connecting strategy, speed, and scale in ways that redefine what’s possible.” — Gary Iles, CMO, Esko & TraceGains

Innovation is no longer linear but layered, interconnected, and strengthened by smarter technology. The “triple threat” shifts the mindset from simply surviving disruption to using it as a catalyst for stronger, faster progress.

Cost volatility, ingredient shortages, and evolving regulations have pushed reformulation to the top of R&D agendas. According to the TraceGains 2025 NPD Report, 35% of companies are prioritizing reformulation and 34% are focused on new product development, showing that adaptability and innovation now go hand in hand.

“Adaptability is the clear theme for 2026. TraceGains NPD research indicates that brands are fine-tuning what already works, adjusting formulas to meet cost, regulatory, and consumer pressures without losing momentum. Reformulation has evolved beyond a reactive move and is now becoming one of the smartest strategies for brands to build resilience and stay competitive.” — Kari Barnes, Regulatory Standards Manager

Rapid reformulation is no longer limited to fixing problems; it’s become a way to strengthen what’s already working. With new additive bans emerging in the U.S. and restrictions like the UK’s HFSS regulations shaping product formulation, brands are rethinking everything from sugar content to ingredient sourcing. Whether they’re replacing allergens, cutting costs, or meeting new compliance demands, reformulation has evolved into a critical strategy for staying ahead of market shifts.

For years, the industry’s growth strategy centered on new—new products, new categories, new markets. But as global supply chains tighten and consumer demands shift toward value and wellness, reinvention is becoming the new frontier of innovation.

“Food and beverage innovation is entering an era of reinvention driven by new technology, trade dynamics, and shifting consumer values. TraceGains research found that nearly half of companies (47%) say global market pressures are pushing them to develop new products, while 22% plan to invest in advanced tools for formulation and innovation. And with 67% pointing to ‘better-for-you’ products as the biggest catalyst for change, brands are reimagining how they innovate from the inside out.” — Jill Hohnstein, Nutrition & Labeling Manager

This mindset prioritizes flexibility over volume. Reformulating existing recipes, localizing sourcing, and using digital systems to model ingredient swaps are becoming essential tactics. With regulatory updates accelerating globally, and consumer preferences evolving at the same pace, reinvention is the only sustainable path forward.

While reformulation may address immediate market pressures, sustainability is defining long-term strategy. No longer confined to corporate messaging or packaging claims, it’s now central to how brands design, source, and scale their products.

TraceGains’ industry survey showed nearly half (48%) of brands now cite supply chain traceability as a key sustainability driver for new product development. At the same time, 41% point to sustainable packaging and 38% highlight sustainable ingredients as core to their innovation strategies.

“Sustainability and regulatory pressures will continue to intensify through 2026, driving the need for deeper visibility and collaboration across the food and beverage supply chain. Companies will be challenged to understand where and how ingredients are produced, digitize their supply chain data, and work more closely with suppliers to meet expanding due diligence and reporting requirements. Even as regulations evolve and deadlines shift, the direction of travel is clear: the future demands primary data and traceable supply chains.” — Emma Karp, Sr. Product Manager

The shift from aspiration to execution is already underway. Brands are digitizing their supplier networks, mapping ingredient origins, and evaluating the environmental impact of every step in the product lifecycle. As new reporting requirements and traceability laws take effect, sustainability is evolving into a performance metric, not a promise.

Transparency will take root first in high-risk categories such as coffee, cocoa, palm, and fresh produce, where consumer scrutiny and regulatory oversight are most intense. But the ripple effect will spread quickly, laying the foundation for a more transparent, efficient, and accountable industry.

Carbon reduction and packaging recyclability remain top of mind for most brands, but new dimensions of environmental responsibility such as land use, water use, and biodiversity are rapidly joining the agenda.

If reformulation is the tactical response and sustainability is the strategic imperative, AI is the great accelerator linking them both. TraceGains’ survey revealed that 17% of F&B brands are now ‘all in’ on AI, up from 10% last year, and nearly half are actively experimenting.

“Artificial intelligence is set to be the great accelerator in 2026. With 82% indicating that their product development processes are “somewhat” to “very” reliant on manual methods and a significant number (22%) anticipating investments in new tools for formulation and innovation, it is an exciting time to work in that space. And with the rise of Intelligent Document Processing (IDP), brands are finally bridging the gap between data overload and actionable insight. This is proof that practical applications are finally catching up to the promise.” — Richard Glatz, Sr. Ontologist, Knowledge Systems

AI’s early adopters are already seeing the potential. The most common use case (25%) is analyzing market trends and consumer insights, followed by streamlining compliance (10%) and accelerating formulation (9%). Together, these tools are helping R&D teams identify risks, model scenarios, and bring products to market faster — all while reducing manual errors and documentation delays.

IDP, in particular, is transforming one of the most burdensome aspects of product innovation: document management. By extracting and structuring supplier and specification data automatically, AI allows teams to focus on innovation rather than administration.

How F&B leaders can prepare for the Triple Threat

As the F&B landscape evolves under the triple threat of reformulation, sustainability, and AI, leaders must rethink how they innovate and where they invest. The brands that thrive in 2026 will be the ones that balance short-term challenges with long-term opportunities, building strategies that are both resilient and future-focused.

1. Invest in reformulation to stay competitive and compliant.
With cost volatility and shifting regulatory pressures reshaping product portfolios, reformulation has become a wise tactical response for staying competitive. It’s the fastest route to adaptability, enabling brands to respond quickly to ingredient changes, consumer trends, and compliance updates without slowing down innovation.

2. Prioritize sustainability as a core business strategy, not an afterthought.
Sustainability is fast becoming a performance metric, not a marketing message. From ingredient sourcing to packaging, traceability and transparency are now the backbone of responsible growth. Leaders must embed sustainability into every decision, because what gets measured, gets managed.

3. Experiment with AI now to build capabilities for the future.
Artificial intelligence is the great accelerator of innovation. The companies that begin experimenting today will be the ones ready to scale tomorrow, using AI to analyze trends, accelerate formulation, and automate compliance. Intelligent Document Processing (IDP) and connected data systems are already bridging the gap between insight and execution.

4. Build an agile NPD strategy that connects formula to finished good.
The next phase of F&B innovation calls for systems that connect reformulation agility, sustainable sourcing, smarter packaging management, and AI-driven efficiency so teams can move faster and make better decisions across the entire lifecycle.

With TraceGains, F&B leaders can bring reformulation, sustainability, and innovation together in one connected platform—uniting people, data, and suppliers to accelerate progress and stay ahead in a rapidly changing market.

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