2016 R&D Survey: 'Really New' Product Development Still No. 1

Food Processing's 45th Annual R&D Survey also finds a plurality in favor of GMO labeling.

By Dave Fusaro, Editor in Chief

How does your company feel about mandatory labeling of products with genetically engineered ingredients (GMOs)? We expected such a touchy issue to elicit a careful or noncommittal response; instead more than 41 percent of respondents are in favor of labeling, nearly half of them (17 percent overall) voting for the added emphasis “and we need a national policy RIGHT NOW.”

Eleven percent are opposed to labeling, and 48 percent “will go along with it if it becomes law.”

In another question, however, the plurality (36 percent) remain either strongly or mildly supportive of GMOs, up 2 percentage points from last year. And that figure is significantly greater than the 27 percent that are mildly or strongly opposed.

Those are answers to just two of the 20 questions we posed in our 45th Annual R&D Survey. Some other semi-revelatory results:

  • This may be a year of “cleaning up” current products, to no one’s surprise.
  • R&D Dept. budgets have been increased for 5 percent of our respondents.
  • Companies holding or seeking non-GMO certification are up 12 points to 35 percent.
  • Removing added sugars placed first for the first time among ingredients food scientists will be working on this year, displacing perennial favorite “removing sodium.”
  • The pace of new product introductions is quickening slightly. More than half of respondents say their companies move a concept through the process in six months or less; only 12 percent say it takes more than a year.

The survey was taken during April and early May. We had 436 responses, up a whopping 53 percent from last year’s 285 survey-takers. To see all of the figures and charts from the survey, download the 2016 R&D Survey Report.

What are you working on?

We’ve started out with the same two, similar questions for several years now: “Which of the following will be most important for your R&D efforts this year?” and “Which of the following issues are having the most impact on your R&D strategy?” They have slightly different slants and definitely different sets of answers to choose from.

For the former “really new” product development continued its multi-year run in first place – but its 38 percent score was a 4-point drop from last year. “Cleaning up current products” was the only answer that showed growth, up 4 percentage points from last year.

“Regulatory restrictions make it difficult to develop really new products,” one respondent told us.

In the second question, “Which of the following issue are having the most impact on your R&D strategy?” perennial first-place finisher food safety dropped 4 points, while preventive health and organic/natural showed big gains. Removing PHOs seems to be a fait accompli.

Further into the survey, we had an open-ended question: “What is your company doing to make a cleaner label?” Some of the responses:

  • Focus on health & authenticity – simpler, cleaner labels for new product development.
  • Identifying ingredients that are banned for our company; e.g., caramel color, ADA [azodicarbonamide].
  • Taking out artificial flavors, colors and chemical-sounding ingredients.
  • Using stevia and natural colors.
  • Eliminating fillers, binders, coloring and unnecessary chemical additives.
  • Looking for alternative ways to be shelf-stable without all the preservatives.

One respondent noted his company already has clean labels but is “considering adding the source of ingredients” to labels.

GMOs and other clean-ups

We included a trio of questions about genetically engineered ingredients. Last year we first asked “Where does your company stand…?”, and 34 percent were either strongly supportive or mildly supportive of them; leaving 22.6 percent against GMOs. This year, both those numbers rose slightly, but the pro-GMO forces still held sway.

What was remarkable, we think, were answers to a new question: “How does your company feel about mandatory GMO labeling?” That’s the one that found 41 percent in favor and only 11 percent staunchly opposed.

As far as being prepared for the July 1 labeling law in Vermont, nearly half our respondents don’t sell products in that state. Of the remainder, 26 percent are ready for the labeling mandate and 29 percent are not quite there yet.

Despite the recentness of the 2015 Dietary Guidelines (which were just issued in December 2015), more than a third of respondents say they’ll have little or no impact on their product development work. Only 12 percent think they’re huge.

The removal of partially hydrogenated oils is less of an issue than it was last year. 36 percent already checked that off the to-do list and another 13 percent “have it under control.”

As in the past, this year’s survey confirms that product development is a cross-functional team effort. While the R&D Dept. rightfully has the most say, marketing & sales held onto second place in several questions relating to the teams’ makeup and who has an impact on product development.

84 percent of you have R&D represented on the team; marketing is next, on 65 percent of the teams. Manufacturing continues to exert an influence, but corporate management continued a multi-year slide, down 7 points this year to 40 percent.

As for how your companies identify new product ideas, 69 percent use internal research and 40 percent use focus groups; 46 percent practice open innovation. Research provided by suppliers is valued by 35 percent but only 17 percent use an outside product development company.

The open-ended questions, in which we ask for comments, are always revelatory. “Consumers are really pissed with the food industry,” wrote one respondent following the GMO questions.

“There is a war on by consumers, and as the economy gets meaner, consumers [are] seeing packaging shrink, prices escalate and formulas tweaked to cheaper,” wrote another. “[But] no one is fooled.”

“All our products are being scrutinized for bad fats, salt, sugar and unpronounceable ingredients.”

Thank you to all who participated – it’s your responses that make this revelatory. For two of you, checks are in the mail.

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