F&B investing more in NPD and outsourcing

By Bethan Grylls

- Last updated on GMT

Food and drink brands are getting creative. Credit: Getty / Urupong
Food and drink brands are getting creative. Credit: Getty / Urupong

Related tags New product development Npd Innovation Automation labour shortages

Despite headwinds, food and beverage brands are spending more in new production development and contract manufacturing, and keen to embrace automation to relieve stress following historic global supply chain challenges.

TraceGains finds that among the 300 professionals it surveyed, over half of food and beverage brands are now outsourcing more of their manufacturing compared with three years ago.

The ‘2023 Food and Beverage CPG Innovation Report’​ found that staff shortages and operational inefficiencies were the key reasons for an accelerated use of contract manufacturers.

Three-fourths are using this kind of resource to some degree, whilst 47% are working with up to 10 contract manufacturers.

The difficulties of the last few years have encouraged companies to invest more into NPD, embrace automation and expand their global footprint in a bid to diversify their supplier base.

Although private and national CPG brands rolled out fewer products between 2020 and 2021, companies are now jumpstarting R&D efforts, with TraceGains confirming an expected rise in NPD.

According to its findings, 64% of respondents are planning to invest more in NPD over the next year, with the majority looking to modify multiple recipes.  

"We're always taking the industry's pulse for new insights 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,"​ TraceGains’ Senior VP of Marketing & Business Development Gary Iles said.

However, almost 86% of food and beverage professionals responsible for food production and supply chain management also reported feeling overworked.

When it comes to what is causing the most pressure, endless paperwork, complicated regulations and sourcing challenges were highlighted as the top stressors.

But almost 71% say that access to work automation tools, such as real-time risk flagging and information sharing, are among the top two things helping to improve job performance.

"Rather than allow market conditions to overrun their business, more food and beverage brands are taking matters into their own hands. The future looks bright for CPGs that remain focused on putting consumers first by bringing new products to market faster and more cost effectively,” ​concluded IIes.

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