Food companies have been at the forefront of innovation since the inception of the industry. Facing daunting challenges, with only 15% of over 3,000 new consumer packaged goods (CPG) products achieving market success, as highlighted in Nielsen’s U.S. Breakthrough Innovation Report, the importance of innovation has surged. The report warns, “If we fail to adapt to shifting consumer preferences, technological advancements, and 21st-century business models, we risk stagnating growth, declining profit margins, losing the competition for top talent, and ultimately, witnessing the collapse of our already fragile innovation capabilities.”
Today, food innovation is vital as a plethora of emerging brands and agile food startups strive to meet consumer demands for unique, interesting, and healthy products, while also competing for shelf space against established CPG giants. According to A.T. Kearney and The Hartman Group’s study titled “Is Big Food in Trouble?”, the market share of the top 25 food manufacturers in the U.S. fell from 66% in 2012 to 63% in 2015.
The early 20th century marked a significant turning point for food innovation. In 1913, refrigerators, previously exclusive to commercial use, became available for home use, revolutionizing food production and retail. With the rising demand for shelf-stable products, as well as refrigerated and frozen foods, food innovation in recent decades has evolved dramatically. Joel Warady, chief sales and marketing officer at Enjoy Life Foods, noted, “20 or 30 years ago, innovation revolved around adding new flavors or extending shelf life. Today, it’s about creating better products that enhance individual well-being.”
Warady emphasized the diverse expertise required for modern innovation, stating, “It’s not just food scientists, but also nutritionists and medical professionals who must collaborate as we explore food innovation over the next few decades.” The fast-paced lifestyle of contemporary America has normalized eating on the go, with meals often sourced from fast food outlets, vending machines, and convenience-focused packaged goods in grocery stores.
As the nation grapples with a health crisis, interest in healthy eating and clean living has surged. Many traditional packaged goods companies were blindsided, experiencing stagnant sales and losing market share to emerging health-oriented and eco-friendly brands. Warady remarked, “In the past two decades, companies have increasingly concentrated on using better quality and healthier ingredients. When Enjoy Life was founded 15 years ago, our commitment to natural ingredients without artificial colors was quite niche.”
What has emerged is that mainstream manufacturers—such as Kraft, Unilever, and Mondelez—are now adopting similar health-conscious approaches, previously pioneered by smaller brands. George Young, a CPG innovation expert, pointed out that while smaller companies are leading in healthy and natural ingredients, larger firms are beginning to follow suit, often acquiring companies that show promise.
Enjoy Life Foods has leveraged innovation to enhance its products’ health profiles by incorporating shelf-stable probiotics and algae protein into its offerings. Warady explained, “We aimed to enhance immune health with probiotics and utilize algae protein, which is the most sustainable protein on the planet. This allows us to create indulgent desserts that also offer functional benefits.”
Unlike previous decades, many large manufacturers now have dedicated innovation centers with teams of food scientists, indicating a shift towards a more advanced approach to innovation. Young noted that companies are increasingly investing in digital innovation, utilizing data and analytics to develop new products more efficiently.
Digital innovation encompasses two main areas: empirical insights and modeling/simulation. Young explained, “CPG companies possess vast amounts of data on their products and are now employing machine learning to uncover relationships between sensory responses and various factors.” This allows them to create digital models of their products, testing ingredient combinations before committing to production.
Enjoy Life collaborates with external innovation groups to harness diverse expertise. Warady stated, “We engage closely with nutritionists and medical experts to address consumer challenges, alongside our innovation teams.” The company also values direct consumer engagement, seeking to identify current needs and future desires in their food choices.
As consumer demand for transparency and healthier ingredients grows, the path forward for innovation is evident. Christina Papale of branding agency CBX noted that what was once considered a niche has now become a significant part of the food industry, with consumers willing to pay a premium for these products.
Warady highlighted that trends in food are evolving beyond healthier ingredients to embrace the concept of food as medicine. Enjoy Life continually explores various ingredient types, including plant-based proteins, fermented ingredients, and spices known for their health benefits.
As the nutraceutical market expands, food companies are increasingly looking for ways to incorporate these elements into their products. Young pointed out the emerging competition between food and nutraceutical companies as they seek to leverage their respective strengths.
Manufacturers should ask fundamental questions before pursuing new product innovation: Is there a market for the product? Will consumers accept it? Warady reflected on the challenges of consumer acceptance, stating, “When I see products like camel milk, I think consumers may not be ready for that. It’s reminiscent of the initial skepticism towards soy or almond milk.”
Enjoy Life is mindful of consumer acceptance rates, carefully introducing innovative ingredients like algae protein in its brownie mix. Warady explained, “We need to avoid over-innovating too quickly and recognize that innovation should be a gradual process. Even if we can implement something today, it doesn’t mean we should, as consumers may not be ready. We gauge readiness through direct conversations with them. While we may miss the mark occasionally, we often get it right.”
As food companies navigate this landscape, the integration of innovations like now calcium citrate tablets into their product lines could further enhance their health offerings, highlighting the ongoing evolution of consumer preferences and the relentless pursuit of healthier, more functional food options.