A Sneak Preview: The Official 2024 NPD Survey

The Growing Cost of Success

The other extremely notable driver for innovation, based on survey responses, was clearly cost. In the first quarter of 2024, the Consumer Price Index, a key gauge of inflation in the US, continued to top forecasts. With manufacturing unit labor costs climbing every quarter in 2023 alongside continued cost pressures on food ingredients, transportation, energy and more, it’s not surprising that cost increases are finding their way through to consumers. The survey clearly echoed the industry-wide focus on cost factors, with 58% of respondents citing rising production and labor costs as key concerns looking into 2024.

For R&D teams, continued cost pressures are a continuing driver for new product development initiatives, with nearly half of survey respondents identifying efforts to reduce ingredient or production costs as a top driver for product development, and as a significant challenge for new product development. These efforts can take many forms, from reformulation to leverage lower cost ingredients to changes necessary to adapt to more efficient production methods. R&D teams in 2024 can expect to play an increasingly important role in both top-line revenue and bottom-line profitability.