2017 R&D Survey: A Year of Cleaning Up Existing Products

Food Processing's 46th Annual R&D Survey finds teams working on removing GMOs and added sugars.

By Dave Fusaro, Editor in Chief

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To no one's surprise, 2017 is shaping up to be a year of cleaning up -- or cleaning out -- for R&D teams. With GMO labeling and a new Nutrition Facts panel coming up next year, product development (or perhaps "redevelopment") teams are reducing added sugar, eliminating genetically engineered ingredients (GMOs), removing sodium and replacing synthetic colors.

Those are the top four answers to one of the questions on our 46th annual R&D Survey. Despite those product adjustments, 42 percent of respondents say they are working on "really new" product development (do we see a contradiction here?) instead of "cleaning up” current products (22%).

At least it appears there's money for all this rework. 23 percent said their department's budget has been increased, and 46 percent say it's about the same.

Not so for at least one product developer. "Due to the high cost of ingredients caused by recession and inflation, the budget had to come down. However, the demand of consumers for clean label and to eat healthy has spurred us to improve on the product quality and to find a niche in the market, while still building trust and loyalty for the consumers." Sounds like a plan.

Despite all the rework, 48 percent say it's not because of the new Nutrition Facts panel (52 percent say it is). However, when asked, "How strongly will the following impact your R&D strategy this year?" preparing for the new panel came in second, close behind preventive health.

"One of the issues we are facing is on deciding serving size for our products because of new regulation," wrote a maker of ethnic entrees.

When asked, "How will your company respond to mandatory GMO labeling in 2018?", the biggest group (35 percent) said they're seeking non-GMO certification. 27 percent said they'll rely on the anticipated USDA label (with fingers crossed); 22 percent will just state they use GMOs on labels and 17 percent will use the Grocery Manufacturers Assn.'s SmartLabel, putting the GMO information online.

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.

In Figure 10, 87 percent of you have R&D represented on the team; Marketing is next, on 61 percent of the teams; Manufacturing holds down third, on 53 percent of teams.
As for how your companies identify new product ideas, 74 percent use general market research, and 66 percent are able to fund internal research. Research provided by suppliers has been on a multi-year increase, with 45 percent valuing it this year. 41 percent practice open innovation.

The survey was taken during April and early May. We had 447 responses, up 11 from last year.

What are you working on?

We’ve started out with the same question for several years now: “Which of the following will be most important for your R&D efforts this year?” “Really new” product development continued its multi-year run in first place, and its score this year was up 4 points from last year (and more in line with previous scores). In addition to "cleaning up" current products, also on the list was existing product improvement (excluding "cleaning up") at 17 percent, product line extensions (11 percent) and cost control (5.9 percent) – all within a percent or two of last year's responses.

We asked, "What ingredients will you be working most on this year?" and gave respondents 10 choices, plus a write-in "other." Among the predetermined answers, "removing added sugars" was at the top of the list, and removing GMOs and sodium were not far behind. The answers weren't all negative; "adding fruits and vegetables" placed fourth.

23 percent took advantage of that open-ended "other" option. Write-ins getting more than five mentions each were (in order) adding protein, removing allergens and removing or replacing preservatives.

Other "others" included replacing high-fructose corn syrup; caramel color replacements; adding probiotics; going phosphate free; "changing fibers per new FDA regulations"; non-meat proteins; only natural flavors; no antibiotics ever; "using only USA sourced and manufactured ingredients"; reducing water usage throughout the supply chain; removing more processed ingredients; and getting gluten-free certification.

Further into the survey, we had an open-ended question: “What is your company doing to make a cleaner label?” A couple of proud product developers answered: "Nothing, we are already clean as a whistle." "Our ingredient statement reads like a recipe." "Only using ingredients 'from Grandma's pantry.'"

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