Could this be a year of "ho-hum" new product development? Maybe so, whether because R&D budgets have been cut or due to efforts to clean up and simplify current products.
Those are sweeping generalizations, admittedly, but they are among the inferences from our 47th annual (yes, we've been doing this quite a while) R&D Survey. The survey was fielded March through mid-April and drew 623 responses, up 39 percent from last year.
Its very first question (Figure 1) always asks how important several general targets are for your R&D efforts this year. "Really new product development" continues to rank first, but at its lowest score in at least four years – 33 percent said it was paramount, not terribly far above "cleaning up current products" (23 percent). On the other hand, "cost control" (14 percent) was roughly double the score of its previous three years. We did add one possible answer, which could have diluted all scores: "Preparing for the new Nutrition Facts panel" got a surprisingly tepid 4.6 percent response.
"Cost-cutting and removal of GMO ingredients," was top of the to-do list for one R&D department head.
Label cleanup came to the fore in last year's survey, and it remained a key trend in this year's project. In an open-ended question, "What is your company doing to make a cleaner label?" we got many interesting responses:
- "Removing FD&C colors, becoming organic compliant and non- GMO where requested."
- "Discontinue using DATEM, SSL, L-cysteine, mono- and diglycerides and limiting high fructose corn syrup, just for a beginning. We are using natural flavors and colors more prevalently."
- "We are only using ingredients that have a function, we are not using any 'fillers.' "
- "Shopping for ingredients that have fewer sub ingredients."
- "Reducing sugar, staying with pantry ingredients, highlighting benefits of ingredients."
- "Create more shades with just fruit and vegetable juices and offer organic certified colors."
- "Eliminating artificial colors and sweeteners, BHA/BHT, synthetic fats, caffeine, L-cysteine, replacing chemical names with common names."
- "All new products that are developed must be clean label. Old SKUs are being phased out or modified."
"Removing GMO ingredients" continued its No. 1 spot among ingredients you're working on this year (Figure 2), its 34 percent score up a bit from last year. "Removing added sugars" held steady, but the rest of our ingredients-to-remove list (sodium, trans fat, saturated fat, even "replacing refined grains with whole grains") dropped.
The ones you could add stayed about the same as in past years, but "adding fruits and vegetables" dropped by about a quarter.
In open-ended answers to that question, adding plant-based proteins got several votes, as did variations on removing ingredients perceived as artificial. "We're focusing more on using natural preservatives," wrote one woman. Two respondents mentioned removing acrylamide, and one said "removing all ingredients sourced from China." Another said "adding tigernut flour" – we had to look that one up.
The new Nutrition Facts panel was supposed to go into effect this year but has been delayed till 2020. Whether product developers are taking advantage of the extra time or they already had this under their belts, fewer R&D Depts. are concerned with the new label this year (Figure 4).
Another 2018 regulation that has been delayed is GMO labeling. When asked how your company is approaching that touchy subject (Figure 6), 39 percent said they're seeking non-GMO certification, 24 percent (up 2 points from last year) already are labeling "contains genetically engineered ingredients" and 27 percent are awaiting the USDA's recommended label. Only 11 percent (down 6 points from last year) are planning to use the Grocery Manufacturers Assn.'s QR code SmartLabel.
There were several random comments about clean labels. "Most if not all of our new product development is swinging to all-natural or clean label. Our clients are requesting that existing products get cleaned up," wrote a contract manufacturer.
"No more synthetics in food, should be all naturals, we need clean labeling," wrote another. And this shot of reality: "There are lots of moving targets about clean labels."
Another new regulatory wrinkle involves the FDA's accepted definition of fiber. The agency at the end of 2016 restricted the definition to naturally occurring fibers and those with a physiological benefit. Any "newly isolated or manufactured dietary fiber" would need to be evaluated by the FDA before it could be listed as dietary fiber on food packaging.
So we thought it would be a good question to ask (Figure 10). But only 14 percent said the changing definition has caused problems – but maybe that's because there's still quite a bit of uncertainty. A dozen respondents wrote-in elaboration that ranged from "I think we're good" to "too early to tell." One product developer did admit, "We're changing fibers per new labeling requirements."
As for your R&D Dept.'s budget (Figure 3), "about the same as last year" has been the standard answer for many years, and still is, although that segment dropped 6 points this year. 17 percent of respondents (6 percentage points fewer than last year) are seeing an increase while 16 percent (nearly double last year's total) are seeing a decrease.