Throughout 2020 innovative product development often took a back seat to the more important need of keeping up with increased consumer demand for pre-existing products.
From January through September, new food and beverage product introductions—including pet foods and sports nutrition—in the U.S. were down 16% compared to the same period in 2019,” reports Tom Vierhile, vice president of strategic insights-North America for Innova Market Insights.
“When the pandemic first struck, there was a lot of discussion around innovation plans being put on hold partly because you had the restaurant and foodservice side of our industry decimated overnight through business closings,” says Justin Shimek, CEO & chief technology officer of contract product developer Mattson.
“CPG manufacturers had their own set of challenges. Many were barely able to keep up with demand due to consumers filling their pantries," he continues. "And retail buyers, who were focused on keeping their shelves stocked, pushed back their meetings with manufacturers.”
“The pandemic caught everyone off guard and companies made the decision to focus on their top sellers and line up adequate supplies of ingredients to meet demand,” says Vierhile. Supply shortages also played in a role.
“A client told me it had everything ready to go for a new launch, but it couldn’t get a bottle cap,” says Vierhile.
“Not being able to get this or that threw a monkey wrench into the whole thing. And if you could get it, it could take double or triple the amount of time even with a rush order.”
Packaging became an issue for the beverage industry, says Vierhile. With fewer gatherings or get-togethers, consumers were not buying as many multi-serve drink containers. But the demand for single-serve packages went up, which caused sourcing issues for individual bottles, cans and closures.
With manufacturing at full capacity, some co-packers and production plants did not have spare time to produce new products for concept testing or consumer trials. And getting consumers together for concept testing and sensory evaluation also was a challenge.
“We were doing sensory organoleptic testing at a university lab and then the school closed and students went home, so we had to adjust our product development processes,” says Emily Buckley, vice president of Freshly's meals portfolio. “But it also forced us to be more agile and bypass some of the traditional testing steps.”
“We have a long history of in-home use tests, which became more important during the pandemic,” says Shimek. “And we moved our qualitative research like focus groups online. We can still get a lot of consumers insights and learnings.”
According to a Mattson report COVID-19 Impact on F&B Industry Innovation, New Product Development & Launches (based on a study in April 2020), 53% of product launches in development have been delayed, 10% were not impacted, 7% have been canceled and 6% were accelerated. More than 8 in 10 respondents said presenting new products has been more challenging.
Food Processing's own R&D Survey, taken mid-April to mid-May, found 52% of the 291 respondents thought the pandemic would set back product launches by "a couple of months"; 28% by "a couple of weeks."
Half of Mattson's respondents believe the long-term impacts of COVID-19 will be positive for the industry. Respondents cite improved cooking skills and family meals for consumers and more resilient supply chains for industry.
About 71% of consumers have tried fewer new food trends since the pandemic began, according to Kearney’s 2020 Food Trends Survey (published in September). The top three reasons consumers are experimenting less with their food purchases include finances, less shopping and availability.
When the pandemic is over and shoppers return to their normal lifestyles, nearly half of those surveyed believe retailers will immediately welcome new products, reports Mattson. In contrast, 36% believe retailers will shun new products for the first three months after the crisis and 11% say retailers will not accept new products for the first six months after the pandemic.
Nearly 40% of those surveyed believe consumers will immediately look for new food & beverage products once the pandemic is over and they return to their previous lifestyles. It is interesting to note that Mattson’s own polling of consumers shows 58% of them will want new products immediately.
“Consumers continue to crave new things even in these challenging times,” says Shimek. “While consumers cannot go to fun and trendy restaurants, they can still experience something new with new products and line extensions. CPG manufacturers are doubling down and ramping up innovation.”
Vierhile believes there will be a rebound of new product launches in 2021 due to new products coming onboard that were originally scheduled for 2020.
Despite the pandemic, product innovation didn't completely disappear.
To get a sampling of how some teams managed to keep things going, you can read—and hear—more about innovating during a pandemic on our Food For Thought Podcast.