Food companies have been at the forefront of innovation since the inception of the industry. Facing daunting odds—where only 15% of over 3,000 new consumer packaged goods (CPG) products achieve market success, according to Nielsen’s U.S. Breakthrough Innovation Report—innovation has become increasingly vital. “If we fail to adapt to shifting consumer preferences, technological advancements, and modern business models, we risk stagnation and declining profit margins, jeopardizing our ability to attract top talent and ultimately leading to the collapse of our already fragile innovation capacity,” the report cautions.
Today, food innovation is especially critical as a growing number of emerging brands and agile food startups emerge to meet consumer demand for unique, interesting, and healthy options, while also encroaching on the shelf space of established CPG giants. A study by A.T. Kearney and The Hartman Group titled “Is Big Food in Trouble?” revealed a decrease in the market share of the top 25 food manufacturers in U.S. food and beverage retail sales, dropping from 66% in 2012 to 63% in 2015.
The early 20th century was a landmark period for food innovation, particularly in 1913 when refrigerators, once reserved for commercial use, became available for home use, revolutionizing food manufacturing and retailing. As demand surged for shelf-stable, refrigerated, and frozen foods, food innovation in previous decades took a markedly different form. “Twenty or thirty years ago, innovation was centered around questions like, ‘How can we add a new flavor to an existing product?’ or ‘How can we enhance shelf life through processing?’” noted Joel Warady, Chief Sales and Marketing Officer at Enjoy Life Foods. “Today, innovation encompasses much more; it focuses on creating better products that support individuals’ overall well-being.”
Warady emphasized that modern food innovation requires a diverse team, including not just food scientists, but also nutritionists and medical professionals, to collaborate on future advancements. The conveniences of contemporary American life, characterized by busy schedules filled with work and extracurricular activities, have led to a culture of on-the-go eating, with meals often sourced from fast food outlets, vending machines, and convenience-focused packaged foods in grocery stores.
However, as the nation confronts a health crisis, there has been a growing interest in healthy eating and clean living. Many major packaged goods companies found themselves unprepared, with stagnating sales and market share shifting toward emerging, health-oriented, and eco-friendly brands. “Over the last 20 years, companies have increasingly focused on higher-quality and healthier ingredients,” Warady remarked. “Since its inception 15 years ago, Enjoy Life has prioritized natural ingredients without artificial additives, which was quite niche at the time. Now, mainstream manufacturers like Kraft, Unilever, and Mondelez are following suit, moving towards healthier options.”
George Young, a CPG innovation expert and founding partner of consulting firm Kalypso, cited examples of innovations such as Greek yogurt, dairy alternatives like nut milks, plant-based proteins, and free-from foods. He noted that many large publicly traded CPG manufacturers have not made significant breakthroughs, often preferring to stick close to their existing product lines and acquiring smaller companies that are nearing $10 to $15 million in revenue.
These larger firms aim to diversify their portfolios by incorporating more nutritious foods, often driven by innovations centered around natural ingredients like stevia and açai. Warady explained that Enjoy Life Foods leverages innovation to enhance the health profile of its products, recently introducing shelf-stable probiotics and algae protein into some offerings. “We aimed for the probiotics to support immune health and recognized algae as the most sustainable protein source on Earth. This led us to develop a line of baking mixes that combine indulgence with functionality, receiving positive consumer feedback,” he said.
Unlike past approaches, many large manufacturers now possess their own innovation centers staffed with food scientists. “This is already quite advanced,” Young commented. “We are now witnessing the rise of digital innovation.” Such innovation occurs through two main avenues: empirical insights and analytics, and modeling and simulation.
“CPG companies have extensive data on their products, including regulatory, health and safety information, and sensory performance,” Young explained. “They are increasingly investing in machine learning to identify relationships between sensory responses and specific factors.” Companies are also employing modeling and simulation to create digital prototypes of their products, allowing them to test molecular structures of ingredients before committing to production.
Enjoy Life collaborates with external innovation groups to assemble the necessary expertise. “We work closely with nutritionists and medical professionals to address the challenges consumers face,” Warady stated. Additionally, the company values direct engagement with consumers to understand their daily challenges and future food desires.
As consumer demand for transparency, healthier ingredients, and cleaner labels grows, the path forward for innovation becomes clearer. Christina Papale, Vice President of Strategy and Director of Innovation at branding agency CBX, noted that what was once considered niche is now a significant part of the food industry, with consumers willing to pay premium prices for such products. “The key is to proactively identify cultural trends and capitalize on them early to build and expand brands,” she advised.
Warady sees current food trends evolving beyond simply healthier ingredients towards the idea of food as medicine. Enjoy Life remains at the cutting edge of innovation by exploring and testing various ingredients, including plant-based proteins, fermented and sprouted ingredients, and nutritionally beneficial seeds and spices. Other companies are also exploring the nutraceutical market for innovative inspiration.
“Food companies are looking for additional health benefits through nutraceutical activities,” Young noted, while nutraceutical firms are leveraging their expertise in natural ingredients to create food products, leading to interesting overlaps in the market.
Regardless of the category, manufacturers should ask fundamental questions before dedicating time and resources to new product innovation: Is there a market for this product? Will consumers accept it? Warady notes that some new ideas may push these limits. “I attend new product trade shows, and when I see something like camel milk, I think consumers may not be ready for that,” he said. “Twenty years ago, similar sentiments were expressed about soy or almond milk.”
Warady acknowledged that Enjoy Life is mindful of consumer acceptance patterns. For instance, the incorporation of algae protein into their brownie mix is a functional innovation that might initially raise consumer eyebrows if prominently marketed. However, as acceptance grows, the packaging can evolve to reflect this change. “We must be cautious about over-innovating too quickly and recognize that innovation is a gradual process,” he said. “Even if we can implement something today, it doesn’t mean we should, as consumers might not be prepared for it. We gauge consumer readiness through direct conversations.” While they may occasionally misjudge, they often succeed in aligning with consumer expectations.
In this context, it’s essential to highlight the relevance of products like Citracal Maximum Plus D, which represents the growing trend of combining health benefits with food innovation. Enjoy Life Foods, along with other companies, is increasingly focusing on integrating such nutraceutical benefits into their offerings, recognizing the changing landscape of consumer preferences towards health-focused products.