FDF research highlights growing cost and complexity of healthier product innovation, putting greater pressure on manufacturers to understand impact of change before committing time and investment
TraceGains has responded to the latest research from the Food & Drink Federation (FDF) and Argon & Co, saying it underlines the need for connected data and digital processes as manufacturers face rising costs, risks, and complexity when developing or reformulating products.
The research found that 63% of manufacturers typically complete at least six healthier product innovation projects a year, with three of the manufacturers surveyed investing between £5 million and £10 million. Despite this commitment, 69% of manufacturers have had a reformulated product fail to reach launch, or be removed from shelves after launch, while 63% experienced sales that were lower than expected.
For large businesses, a single reformulation project can cost up to £5 million, including costs for skilled staff, product trials, scale-up testing, marketing and production downtime. One case highlighted in the report noted that changing packaging and artwork after a healthier reformulation cost around £500,000.
“Reformulation is not just about changing a recipe,” said Bal Chand, Commercial GTM & Marketing Leader with TraceGains, the leading provider of compliance, quality, and innovation solutions for the food and beverage (F&B) industry. “The challenge lies in having the information to understand cost, scaling and regulatory implications early on in the process.”
The operational complexity of healthier innovation is reinforced by the regulatory environment. FDF research found that 69% of respondents ranked greater regulatory certainty as the most important condition for successful healthier product innovation. The report also found that 81% of respondents already reformulated products in response to health regulations, while 50% increased innovation activity.
Connected systems facilitate stronger decision-making
When supplier information, ingredient specifications, regulatory and product data sit in separate systems or are managed through manual processes, teams can struggle to understand the downstream impact of a change until very late in the development cycle.
“Connecting information systems creates a stronger foundation for decision-making,” added Bal. “Teams can now assess how one change could affect the wider production development process, with AI adding further value when applied to trusted connected industry data and putting that intelligence in workflows,” Bal noted. “Our AI Formulation platform brings supplier and ingredient intelligence, compliance data, formulation tools and collaborative workflows into a single environment for food scientists and product developers.
“This can help manufacturers evaluate options faster, understand the potential impact of change earlier and make more confident investment choices,” he said.
TraceGains is also establishing how prepared the wider industry is to manage increasing complexity with its European Food & Beverage Digitalization Benchmark 2026. This independent study examined how European manufacturers are approaching digitalization across ingredient sourcing, supplier collaborations, regulatory compliance, quality and new product development.
“The FDF research shows what is at stake when innovation decisions are complex and difficult to reverse,” he said. “Our European benchmark will help us to understand where manufacturers are in terms of the digital footing needed to manage that complexity.”
To take part in the European Food & Beverage Digitalization Benchmark 2026, just click here.
Innovations in Food (& Beverage) Processing & Packaging is a bi-monthly magazine distributed globally in Digital format. www.innovationsfood.com. X: @Innovfoodtech. Instagram: @innovationsinfoodtechnology. Linkedin: www.linkedin.com/in/terry-prior52
