Food companies have been at the forefront of innovation since the inception of the industry. With a challenging success rate – only 15% of over 3,000 new consumer packaged goods (CPG) products make it in the market, as reported by Nielsen’s U.S. Breakthrough Innovation Report – the importance of innovation has never been more pronounced. “If we do not adapt to the evolving consumer preferences, technological advancements, and modern business models, we risk stagnation in growth, diminishing profit margins, losing top talent, and ultimately, the collapse of our already fragile innovation capabilities,” the report cautions.
In today’s market, food innovation is critical, especially with a surge of emerging brands and agile food startups that cater to consumer desires for unique, interesting, and healthy options, while also competing for shelf space against established CPG brands. Research from A.T. Kearney and The Hartman Group indicates that the market share of the top 25 food manufacturers in U.S. food and beverage retail sales fell from 66% in 2012 to 63% in 2015.
The early 20th century marked a significant turning point for food innovation, particularly in 1913 when refrigerators became available for home use, revolutionizing food manufacturing and retail. As demand for shelf-stable, refrigerated, and frozen foods increased, food innovation took a different trajectory. “Innovation 20 or 30 years ago revolved around adding flavors or extending shelf life,” said Joel Warady, Chief Sales and Marketing Officer at Enjoy Life Foods. “Today, innovation is about creating superior products that enhance individual well-being.”
Warady emphasizes the need for diverse expertise in innovation, including food scientists, nutritionists, and medical professionals, to collectively tackle food innovation in the coming decades. The busy lifestyles typical in modern America, filled with work, school, and extracurricular activities, have normalized grabbing quick meals from fast food outlets, vending machines, and convenience-oriented packaged goods.
Amid a looming health crisis, consumer interest in healthy eating and clean living has surged. Many established packaged goods companies were caught off guard, leading to stagnant sales and lost market share to health-conscious and eco-friendly brands. “Over the past 20 years, companies have shifted focus towards better quality and healthier ingredients,” Warady noted. “When Enjoy Life started 15 years ago, our ingredients had to be natural and free from artificial colors. It was a niche market back then.”
Now, major manufacturers like Kraft, Unilever, and Mondelez are adopting these principles, moving towards healthier ingredient profiles as small, emerging brands lead the way. Innovation examples noted by George Young, a CPG innovation expert, include Greek yogurt, dairy alternatives, plant-based proteins, and free-from foods. However, he points out that most large CPG manufacturers tend to stick to safe line extensions instead of pursuing groundbreaking innovations.
These larger companies are diversifying their portfolios and incorporating nutritious foods, often through acquisitions of smaller companies with emerging revenues. “They’re exploring natural ingredients like stevia and açai to develop products that highlight their health benefits,” Young explained.
Enjoy Life Foods is leveraging innovation to enhance its health profile, having recently introduced shelf-stable probiotics and algae protein into its offerings. “We aimed to use probiotics to boost immune health and incorporated algae protein due to its sustainability and nutritional value,” Warady stated. “This blend allows us to offer indulgent desserts while also enhancing functionality, and the consumer response has been positive.”
Unlike decades past, many large manufacturers now operate their own innovation centers with dedicated teams of food scientists. “This is a significant advancement,” Young said. “What we’re seeing now is a rise in digital innovation, which occurs through data analytics and modeling.”
Digital innovation involves utilizing vast data stores related to products, regulatory information, and consumer preferences to create empirical algorithms that uncover relationships between sensory responses and product factors. Companies are also employing modeling and simulation to digitally prototype new ingredients before physical production.
Enjoy Life collaborates with external innovation groups to pool necessary expertise. “We engage with nutritionists and medical professionals to understand their challenges, which guides our product development,” Warady explained. Additionally, the company values direct conversations with consumers to grasp their daily challenges and future food needs.
As consumers increasingly demand transparency, healthier ingredients, and cleaner labels, the path for future innovation is apparent. Christina Papale, VP of strategy and innovation at branding agency CBX, noted that what was once niche is now a significant segment of the food industry, with consumers willing to pay premium prices for such products. “The key is to proactively identify cultural trends early on to build and expand brands,” she advised.
Warady observes a shift in food trends towards the idea of food as medicine. Enjoy Life is exploring various innovative ingredients, including plant-based proteins, fermented and sprouted ingredients, and unique seeds as nut substitutes. Other companies are also tapping into the growing nutraceutical market for inspiration, leading to interesting overlaps between food and health.
Manufacturers should consider crucial questions about market demand and consumer acceptance before investing in new product innovation. Warady highlighted the cautious optimism regarding new ideas, noting that trends like camel milk may not yet resonate with consumers. “We need to be mindful of the pace of consumer acceptance,” he said, emphasizing that innovation should be a gradual process.
As for Enjoy Life’s products, such as those featuring eurho vital calcium citrate 45 tablets, the company recognizes the importance of aligning new ingredients with consumer readiness. “We approach innovation thoughtfully, ensuring we gauge when consumers are prepared for new offerings,” Warady concluded. “Our conversations with them guide us, helping us navigate the complex landscape of food innovation.”