New Study Finds Food and Beverage Brands Investing More in Outsourcing and New Product Development

by | April 19, 2023

April 19, 2023 – Westminster, CO TraceGains, the world’s only networked ingredients marketplace, today released its “2023 Food and Beverage CPG Innovation Report,” a survey of nearly 300 food and beverage professionals that explores the state of new product development and the shift to outsourcing as a way to contain costs and keep up with evolving consumer preferences. 

According to the results, nearly all (86%) professionals responsible for food production and supply chain management feel overworked. Plagued by staffing shortages and operational inefficiencies, more brands are accelerating their use of contract manufacturers (co-mans). They’re also investing more in new product development (NPD), embracing digital tools to automate manual processes, and expanding their global footprint to diversify their supplier bases.

At TraceGains, we’re always taking the industry’s pulse for new insight and our latest survey shows that in 2023 brands are taking proactive measures to remain competitive – whether that’s on the production side or R&D with new recipes,” Senior VP of Marketing & Business Development Gary Iles said. “Rather than allow market conditions to overrun their business, more brands are taking matters into their own hands. The future looks bright for brands that remain focused on putting consumers first by bringing new products to market faster and more cost-effectively.”

NPD on the rise

While private and national CPG brands rolled out fewer products in 2020 and 2021, companies are jumpstarting R&D efforts after years of supply chain disruptions. As many brands seek to regain a market advantage and meet evolving consumer preferences post-pandemic, TraceGains data confirm the expected rise in NPD. 

  • Nearly two-thirds (64%) of respondents plan on investing more in NPD over the next 12 months.
  • More than two-thirds (67%) plan to modify multiple recipes (six or more). 
  • One-third (33%) anticipate the need to modify anywhere from six to 20 recipes, representing a 6% jump from the TraceGains June 2022 survey.

Co-mans: faster time to market, cost savings

After years of experimenting with co-manufacturers, brands have embraced this model of food production following historic global supply chain failures. 

  • More than half (55%) now outsource more of their manufacturing compared to three years ago.
  • Three-fourths are using at least some co-man resource, while almost half (47%) work with up to 10 co-mans.
  • Benefits of co-mans include: getting products onto shelves faster (36%), saving costs on facilities and equipment (27%), and circumventing labor shortages (13%).
  • Co-mans are a popular option for multiple functions: producing finished goods (75%), manufacturing component materials (36%), and sourcing and managing materials (20%).

Overworked professionals point to tech-enabled solutions

While important competitive strategies, increasing NPD and working with co-mans introduce a host of new challenges. Technology is key to helping F&B brands unlock greater efficiency.

  • Dealing with never-ending paperwork (50%), complicated compliance regulations (49%), and sourcing complications (42%) are the top three stressors.
  • Nearly three-fourths (71%) of survey respondents say access to work automation tools like real-time risk flagging and information sharing are among the top two things that would help them improve their job performance. 
  • After work automation, other desired improvements include transforming the digital infrastructure (24%) and increasing headcount (22%).

To learn more about how CPG companies can prioritize growth even amid the current macroeconomic environment, visit

Survey methodology

In March 2023, TraceGains surveyed 287 food and beverage leaders at large companies in North America, EMEA, LATAM, Australia, and SE Asia, with 65% of brands reporting revenues upwards of $50 million. 

About TraceGains

TraceGains is revolutionizing supply chain agility for global consumer goods companies through an innovative Networked Ingredients Marketplace. The ability for businesses to seamlessly connect with partners through a networked marketplace is essential for collaborating to solve today’s unprecedented supply chain challenges. Information about ingredients and supply chain partners flows instantly using intelligence and automation. Our patented PostOnce™ technology allows authorized stakeholders to share and receive vital information, precisely when, where, and how they need to operate efficiently and remain competitive. Through the power of a global network, supply chain agility is achievable.

Media Contact 

Jennifer Lyle, FINN Partners

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