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Co-manufacturing, R&D Investment Ramps Up in Wake of Supply Chain Challenges

April 19, 2023
Survey of nearly 300 food and beverage professionals shows companies outsourcing more production and working to spend on new product development.

A survey of nearly 300 food and beverage professionals released by TraceGains reported that more brands have ramped up the use of contract manufacturing and invested more in new product development in the wake of pandemic-induced supply chain issues.

According to the “2023 Food and Beverage CPG Innovation Report” from the ingredients-marketplace provider, the co-manufacturing model has gained popularity, with 55% of companies surveyed stating they outsource more of their production than compared to three years ago. Almost half of respondents (47%) said they work with up to 10 co-manufacturers, and 75% use at least one co-manufacturer.

Meanwhile, companies are feeling more comfortable ramping up R&D efforts after years of supply-chain challenges, with 64% of survey respondents planning to invest more in that space in the next year.

The survey includes responses from 287 food and beverage leaders at CPG companies in North America, Europe, the Middle East and Africa, Latin America, Australia and southeast Asia, collected in March 2023. TraceGains reports that 65% of brands represented in the survey reported revenues upward of US$50 million.

About the Author

Andy Hanacek | Senior Editor

Andy Hanacek has covered meat, poultry, bakery and snack foods as a B2B editor for nearly 20 years, and has toured hundreds of processing plants and food companies, sharing stories of innovation and technological advancement throughout the food supply chain. In 2018, he won a Folio:Eddie Award for his unique "From the Editor's Desk" video blogs, and he has brought home additional awards from Folio and ASBPE over the years. In addition, Hanacek led the Meat Industry Hall of Fame for several years and was vice president of communications for We R Food Safety, a food safety software and consulting company.

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