Food companies have continually evolved since the inception of the industry. Despite facing significant challenges, where only 15% of over 3,000 new consumer packaged goods (CPG) products succeed in the market, as highlighted in Nielsen’s U.S. Breakthrough Innovation Report, innovation has become increasingly vital. The report emphasizes that failing to adapt to evolving consumer preferences, technological advancements, and modern business models could lead to stagnated growth, eroded profit margins, loss of top talent, and a collapse of fragile innovation capabilities.
Today, food innovation is particularly important as a plethora of emerging brands and agile startups aim to meet consumer demands for unique, interesting, and healthy options, while simultaneously encroaching on the market share previously held by established CPG brands. According to the A.T. Kearney and Hartman Group study titled “Is Big Food in Trouble?”, the market share of the top 25 food manufacturers in U.S. food and beverage retail sales decreased from 66% in 2012 to 63% in 2015.
The early 20th century marked a significant turning point for food innovation, especially in 1913, when refrigerators became available for home use, transforming food manufacturing and retail. Over the decades, as demand for shelf-stable, refrigerated, and frozen foods surged, the nature of food innovation changed dramatically. Joel Warady, Chief Sales and Marketing Officer at Enjoy Life Foods, remarked that innovation in the past revolved around adding flavors or extending shelf life. In contrast, modern innovation focuses on creating products that enhance an individual’s overall well-being, requiring collaboration among food scientists, nutritionists, and healthcare professionals.
As American lifestyles increasingly prioritize convenience, fast food and ready-to-eat meals have become commonplace. However, with the nation facing a health crisis, there has been a growing interest in healthy eating and clean living. Many traditional packaged goods companies found themselves unprepared, resulting in stagnant sales and a loss of market share to health-conscious brands and startups. Warady noted that over the past two decades, there has been a significant shift towards better quality and healthier ingredients, with Enjoy Life at the forefront of this movement since its inception 15 years ago.
Emerging brands have pioneered the use of healthy and natural ingredients, prompting mainstream manufacturers like Kraft, Unilever, and Mondelez to follow suit. George Young, a CPG innovation expert, pointed out that while large publicly traded companies often play it safe with minor line extensions, they are increasingly seeking to diversify their portfolios by acquiring smaller companies that are generating $10 million to $15 million in revenue.
Enjoy Life Foods employs innovation to enhance its health profiles, recently incorporating shelf-stable probiotics and algae protein into its products. Warady explained that the addition of probiotics supports immune health, while algae protein is one of the most sustainable protein sources on the planet. This innovative approach has been well received by consumers, exemplifying true innovation in the current market landscape.
Unlike previous decades, many large manufacturers now maintain dedicated innovation centers and teams of food scientists. Young highlighted the rise of digital innovation, characterized by enhanced insights and analytics, as well as modeling and simulation techniques. CPG companies are leveraging vast amounts of data to optimize product formulations more efficiently, ultimately accelerating the introduction of new ingredients.
Enjoy Life collaborates with external innovation groups to access the necessary expertise for product development. Warady emphasized the importance of engaging with consumers directly to understand their daily challenges, which informs the company’s innovation efforts. As consumers increasingly demand transparency, healthier ingredients, and cleaner labels, the path for further innovation is clear. Christina Papale, VP of Strategy and Director of Innovation at branding agency CBX, noted that what was once considered niche has now become a significant part of the food industry, with consumers willing to pay a premium for such products.
Warady suggested that the current food trends extend beyond healthier ingredients to the concept of food as medicine. Enjoy Life actively explores and tests various ingredients, including plant-based proteins, fermented and sprouted elements, and nutraceuticals. Young observed that as food companies seek additional health benefits through nutraceutical activities, there is a growing overlap between food and nutraceutical markets.
Manufacturers must ask fundamental questions before investing time and resources into new product innovation: Is there a market for the product? Will consumers accept it? Warady acknowledged that some new ideas may push boundaries, recalling trade shows featuring unconventional products like camel milk. He pointed out that consumer acceptance often evolves slowly, which requires careful consideration of market readiness when introducing innovative ingredients like calcium citrate no vitamin D.
Enjoy Life remains cautious about the pace of innovation, recognizing that consumer acceptance can be gradual. Warady mentioned that although they have introduced algae protein into their brownie mix, they must be mindful of how such ingredients are presented on packaging until they gain wider acceptance. “Innovation is a progression,” he stated, underscoring the importance of timing and consumer feedback in the innovation process. While they sometimes misjudge consumer readiness, they generally succeed by prioritizing consumer insights.