TraceGains has responded to new research from the Food & Drink Federation (FDF) and Argon & Co. It says the findings underline the need for connected data and digital processes as food manufacturers face rising costs, risks and complexity when developing or reformulating products.
The research found that 63% of manufacturers typically complete at least six healthier product innovation projects a year. Three of the manufacturers surveyed invest between £5 million and £10 million.
Reformulated products that fall short
Despite that commitment, 69% of manufacturers have had a reformulated product fail to reach launch, or be removed from shelves after launch. In addition, 63% experienced sales that were lower than expected.
For large businesses, a single reformulation project can cost up to £5 million. That figure includes costs for skilled staff, product trials, scale-up testing, marketing and production downtime. One case highlighted in the report noted that changing packaging and artwork after a healthier reformulation cost around £500,000.
“Reformulation is not just about changing a recipe,” said Bal Chand, Commercial GTM & Marketing Leader with TraceGains, which provides compliance, quality and innovation solutions for the food and beverage industry. “The challenge lies in having the information to understand cost, scaling and regulatory implications early on in the process.”
Regulation adds to the pressure. FDF research found that 69% of respondents ranked greater regulatory certainty as the most important condition for successful healthier product innovation. The report also found that 81% of respondents already reformulated products in response to health regulations, while 50% increased innovation activity.
The case for connected systems
TraceGains argues that problems arise when supplier information, ingredient specifications, regulatory and product data sit in separate systems or are managed through manual processes. In those cases, teams can struggle to understand the downstream impact of a change until very late in the development cycle.
“Connecting information systems creates a stronger foundation for decision-making,” said Bal Chand. He added: “Teams can now assess how one change could affect the wider production development process, with AI adding further value when applied to trusted connected industry data and putting that intelligence in workflows.”
Describing the company’s own software, he said: “Our AI Formulation platform brings supplier and ingredient intelligence, compliance data, formulation tools and collaborative workflows into a single environment for food scientists and product developers.” He continued: “This can help manufacturers evaluate options faster, understand the potential impact of change earlier and make more confident investment choices.”
A European benchmark
TraceGains is also running its European Food & Beverage Digitalization Benchmark 2026. The independent study examined how European manufacturers are approaching digitalization across ingredient sourcing, supplier collaborations, regulatory compliance, quality and new product development. The company has previously taken its message to the industry in person, as covered in our report on TraceGains’ European road trip of industry events.
“The FDF research shows what is at stake when innovation decisions are complex and difficult to reverse,” said Bal Chand. “Our European benchmark will help us to understand where manufacturers are in terms of the digital footing needed to manage that complexity.”
TraceGains, a Veralto company, says 1,500 global brands rely on it, including half of the top 100 food and beverage manufacturers. It says its network covers more than 100,000 supplier locations and almost 700,000 ingredients.
Details and image via TraceGains.