Four out of five F&B brands plan to boost innovation spend in 2025

TraceGains, the leading provider of compliance, quality, and innovation solutions for the food and beverage (F&B) industry, today released the results of its 2025 survey, R&D and Product Innovation in the Food and Beverage Industry. The findings reveal a paradox at the heart of F&B: while innovation investment is rising rapidly - 83% of brands plan to boost new product development (NPD) spend this year - only 2% say their product development processes are fully digitized.

The updated 2025 report builds on 2024 showing 76% of brands planned to increase innovation investment. That number increased to 83% this year, with over half of respondents planning to raise budgets by more than 10%.

Manual processes undermine modernization
Despite growing investment in AI and digital tools, most F&B brands remain heavily reliant on outdated manual processes, slowing innovation and increasing risk.
●    82% of brands still use manual tools like spreadsheets, paper documents, or email to manage NPD.
●    More than half (53%) don’t use a Product Lifecycle Management (PLM) system at all, slowing speed to market, increasing compliance risk, and hindering cross-functional collaboration.
●    Just 2% of brands have fully digitized and automated their NPD workflows, underscoring the scale of the digital maturity gap in F&B.

AI gains ground, but hesitation remains
AI usage in product innovation is gaining ground, but most brands are still in the early stages of experimentation.
●    17% of brands are “all in” on using AI to power NPD, up from 10% in 2024. 
●    Another 45% are experimenting, and only one third (32%) remain sceptical, dropping from 44% in 2024.
●    Mid-sized companies (1,000-5,000 employees) are leading adoption, while smaller and larger firms show more hesitation. 
●    25% of respondents cited analysing market trends and consumer insights as their top AI use case.

Innovation investment clashes with cost and supply pressures
While innovation remains a strategic priority, cost pressures and supply chain instability are forcing many brands to slow or scale back.
●    Nearly 70% of brands cite macroeconomic conditions as their top innovation barrier - up 15 points from 2024. 
●    More than half (53%) say production costs, including labour, are a major concern, and 50% are still struggling to secure key ingredients and materials. 
●    Among brands reducing their innovation pipeline, 41% attribute it to financial uncertainty and margin pressure.

The future is healthier and more sustainable
Despite headwinds, brands remain focused on better-for-you and sustainable innovation. This year’s top product development priority? Healthier food - named by 67% of respondents, up from 60% in 2024. Sustainable packaging (41%) and personalized nutrition (289%) are also key areas of interest. Enthusiasm for plant-based products is waning, with only 19% of brands identifying it as a top innovation focus, down sharply from 33% in 2024.

Brands are also putting sustainability into action:
●    48% are working to improve supply chain traceability
●    38% are sourcing more sustainable ingredients
●    41% say environmental goals are influencing packaging decisions

To download the full report and explore how F&B brands can digitize and scale their NPD efforts, visit www.tracegains.com

Bron: TraceGains - partner FoodPro Network