A Guide to R&D Sourcing and New Product Development

The food and beverage industries are among the fastest growing worldwide. Research predicts the industry’s value will hit $8.9 trillion by 2026, at an 8.7% compound annual growth. The market breaks down into multiple distribution channels, including hypermarkets/supermarkets, e-commerce, and convenience stores. Consumers remain the most significant trend driver in the F&B space with ever-evolving preferences, which can take a toll on many brands. But innovation represents the path forward to new product development.

While you need more – and better – ideas to move innovation into production, turning those ideas into real-world processes looms large as an insurmountable obstacle. But leveraging R&D seamlessly into product development doesn’t have to be so difficult.

R&D role in manufacturing?

As consumers clamor for more, well, everything, companies must develop safe and innovative products to meet those growing demands. Consequently, F&B manufacturers engage in various activities around R&D to offer long-lasting products that satisfy the health and nutritional needs of the consumer.

Typical R&D responsibilities include:

  • Creating new products. If existing products no longer satisfy the consumers’ health and nutritional needs, you must develop new products. NPD includes creating products with different flavors and ingredients. You must also implement strategies that minimize costs without sacrificing product taste and quality.
  • Product improvement. R&D spends nearly as much time maintaining and improving existing product lines as they do on new product development. That includes coming up with ways to increase a product’s shelf-life, refining your products’ nutritional content, texture, and taste, or reformulating to put out healthier products, such as launching SKUs with less fat and sugar.
  • Package changes. R&D is also increasingly tasked with coming up with sustainable packaging for products.

Challenges hindering new product development

R&D departments face enormous challenges in their relentless quest to innovate and develop better products. So, you must overcome the standard drag on product innovation, which starts with understanding the challenges. Those setbacks take several forms:

  • Skyrocketing ingredients costs. Food processors and manufacturers face dramatic hikes in ingredient costs stemming from supply chain issues, geopolitical tension, and the COVID-19 pandemic. The trend has driven up operating costs, even for major industry players, which hinders product development and innovation. The high costs have also fundamentally changed how manufacturers do business. For example, rising prices have forced some brands to implement new product development and formulas just to keep up with a shifting customer base.
  • A shortage of reliable suppliers. Food and beverage manufacturers rely heavily on suppliers. Consequently, supplier reliability remains crucial to operational effectiveness and efficiency. You want a supplier with adequate capacity to deliver the right ingredients. Moreover, the deliveries must be on time to allow for smooth processing and minimal delays. But with so many “suppliers” joining the industry, finding a reliable supplier has become more complex.
  • Finding suitable materials. While you can tie this to suppliers, food processors also have a hand in finding the right ingredients for product development. Without the right raw materials, you can’t innovate. This makes it impossible to launch new products or reformulate existing products.

Aggressive new product development

Even with skyrocketing ingredient costs and a dearth of dependable suppliers, you don’t have to mothball your R&D team. But, first, you must have a well-established game plan to succeed in this increasingly competitive industry.

  • Develop the right products. Consumers want quality products that meet their needs. So, your core objective should be to create distinctive products that meet evolving customer tastes while staying ahead of the competition. Manufacturers must streamline the process of getting ingredients quickly and on time to develop and launch new products. You must establish insights and cultivate resources to understand emerging trends better. You also need to understand your market challenges and formulation complexities. This will help you create the right products while accelerating product formulation. Additionally, you’ll be able to develop the best ingredient system that brings optimal results to fulfill product needs and brand promise.
  • Establish product quality and consistency. Consumers want quality products and expect the quality to remain the same if not improved. A slight compromise or drop in quality can hurt your sales. So, you should utilize agility and flexibility in your R&D production processes to ensure product quality and consistency. Moreover, you need expert in-house blending and agglomeration for a proactive domestic stocking strategy and consistent ingredient quality. This will help you minimize lead times and enhance supply chain security. A robust and flexible R&D production process offers quicker turnaround and effortless up-scaling, allowing you to flex your production needs.
  • Streamline your research and development capabilities. R&D remains a time-consuming yet crucial aspect of product development and reformulation. So, you need an effective and efficient strategy to develop differentiated ingredient solutions for production. The solutions should meet food and beverage application requirements and essential processing challenges. Whether you’re creating a new product or reformulating, it’s crucial to understand your needs to minimize risk.

The impact of R&D on F&B companies

Companies that know how to best leverage research and development boast better survival chances. An industry-wide shift toward healthy food is driving consumers to holistic health. Companies that harness the power of R&D can reap the following benefits:

  • Develop new products. R&D will always be linked to new product development. With access to the right ingredients, you can quickly develop new products that meet your customers’ nutritional and health requirements. Moreover, R&D is crucial to every stage of the production process, from research and screening to consumer testing.
  • Creating customized products. R&D allows companies to customize their products to meet their customer’s dietary requirements. This is possible thanks to the research and understanding of how a person’s microbial and genetic make-up affects diets.

Overcome disruptions with TraceGains

With the evolving F&B industry, R&D is crucial to developing products that meet your consumers’ nutritional and health needs. However, some challenges hinder R&D’s efforts, such as the high cost of ingredients and the absence of reliable suppliers. To make sourcing easier for R&D, you need a networked ingredients marketplace like TraceGains. We provide solutions to help you overcome supply chain disruptions. Contact us today for more information.

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