With several factors impacting the ingredient supply chain, nearly half of product developers are having trouble sourcing ingredients. But at least product development work is getting back to pre-pandemic normal, with only about 30% of R&D people reporting Covid has caused lingering changes in the way they work or the products they develop.
Those are among some of the more notable results from our 51st annual R&D Survey. 152 product developers responded to our survey in April and May, sharing answers to 15 aspects of their jobs and their R&D departments.
There were several spots for verbatim comments, like: "We were short going into Covid era and the ability to find competent help has resulted in 33-50% increase in hours (which sucks if you are salaried) but the work has to get done," wrote one overworked product developer. "Also, with a lot of people sitting behind a screen, documentation requests have increased significantly."
And: "We expect plant-based to slow down and consumers gradually going back to pre-pandemic behaviors. Sourcing will definitely change for the long term, which places more pressure on our operations."
"We are trimming down our SKUs," noted a respondent at one of the larger companies.
About two-thirds of the questions are perennials: Queries like what ingredients are you adding or removing, who's involved in product development, and what happened to your R&D budget this year? Every year we add a handful of new and timely ones: For three years now there have been some about the pandemic, and this year we added that one about ingredient shortages.
"The ingredient supply has gotten very tight across the board and is expected to get tighter," wrote one Ohio R&D manager.
Some of the ingredients mentioned in short supply were MSG, preservatives, artificial sweeteners, starches & gums, maltodextrin, soluble fiber and preservatives. Many mentioned fats & oils; one respondent elaborated, "Delayed import shipments of edible oil, cost of edible oils is prohibitive!" Another noted his company is "moving to other oils rather than sunflower oil," which is in especially short supply since the war in Ukraine.
"We're finding second and third sources for most ingredients we work with," said another.
The first question has been the same for several years now: What's the general tone for your product development efforts this year? The cheerful "really new" product development choice still was the top answer, although at 33% that was the lowest it was since 2018. There were 3-5 point gains in all three current-product answers: existing product improvement, cleaning up current products and line extensions. Despite inflation (maybe this survey was a little early), cost control was last and dropped 2 points from last year.
What does R&D look like at food and beverage companies in 2022 and how has the pandemic continued to impact new product development? We answer these issues and more in our 2022 R&D Trends Survey report.
Of course, not everybody is looking at home-run new products. "A number of our core products have become very popular, and we've had to focus all of our time and money on them instead of new products," wrote one respondent.
Removing sugars was still the top ingredient concern, up 4 points from last year – although, in a related question, 63% said that was not on their to-do list. When sugar was removed, top solutions were non-nutritive sweeteners (18% of respondents) and caloric sweeteners that don't have to be declared as "added sugars" (10%).
While past surveys found the pandemic caused changes in both the product development process and the types of products being developed, it was somewhat surprising to find such a large majority of respondents putting that behind them. 70% said any pandemic-inspired changes in their internal process will not be carried forward, and 69% said consumption patterns are not changing the products they develop.
Nevertheless, several wrote in comments saying accommodations were made to allow some people to continue working from home and that a lot of cross-functional team meetings remain virtual, even when most people are somewhere on site. Others noted that their business remains weighted toward retail products despite pre-pandemic penetration on the foodservice side.
One product developer at a small Canadian company wrote of a positive change caused by the pandemic: "We developed a process where before there was none." Another said her company "adopted more stage gate, but that would have happened anyway."
Budgets and team
Inquiries about the team and funding are among our perennial questions. More than half of respondents say their R&D budget this year is about the same as last year, but those saying it's been cut (12%) was at the lowest point since 2019 – apparently a good sign.
In a number of questions, it's apparent R&D still calls most of the shots in product development (not surprisingly) but 68% (that's the highest since 2018) report having a cross-functional product development team. The second highest representation on that team is from manufacturing/plant operations (58%) with marketing right behind (56%) and management not far behind them (50%).
Outside suppliers are on 31% of teams. "Our R&D is conducted in house at times with assistance from our suppliers," wrote a guy at a bakery.
But in a different question on who influences product development goals, marketing & sales at 69% comes in second to R&D. Manufacturing and management each are at 50%.
Teams meet pretty often, 32% convening weekly and another 22% a couple times per month. 12% of those meetings are virtual.
The turnaround time seems to be shortening. When asked how long it takes to get a product from concept to shelf, the biggest increase was in the six-month answer (40%, up from 28% last year and the highest number since at least 2019). 33% say it takes nearly a year. The two given longer turnaround times both suffered significant drops.
Finally, some random comments worth reading:
- "Honestly, working to keep the ingredient deck as simple as possible while including protein is a real challenge."
- "Need to embrace artificial intelligence and utilize to accelerate project execution with more accuracy."
- "We're sourcing upcycled ingredients and regenerative agriculture practices."
- Thank you to the 152 of you who took the time to answer this survey. And for those respondents who won our $100 incentives, the checks are in the mail!