Innovation in the food industry remains on a “long-term downward trend” with little sign of improvement on the horizon, a new study has shown.
Figures compiled by the British Brands Group (BBG) and Europanel show a drop in the overall number of product launches from more than 6,000 in 2022 to just under 5,300 in 2023. The long-term decline is laid bare by the figure for 2018, when more than 8,200 products were launched.
Products classified as showing ‘distinctive innovation’ are also in a long-term downward trend, according to the study, despite rising in 2023 to 61, compared with 41 in 2022.
In contrast, the research showed there were 130 distinctive innovations in 2019, representing 2.1% of all new launches. In the latest figures, distinctive innovation represented just 1.2% of all launches.
“The economic uncertainty has not really eased [since the pandemic],” the report finds. “A restraint in launching bold new products may still be present.”
BBG director John Noble said: “I believe these figures are a reflection of the overall climate including the squeeze on margins and the range of cost pressures coming on companies which is causing them to cut back on innovation.
“Sadly I’m not seeing much room for positivity.”
Noble said this year’s increase in employer National Insurance and incoming extended producer responsibility costs made it “very difficult to see where the resources for innovation [will] come from”.
Top innovators
The research shows breakthrough innovations have mostly been led by brands, both in distinctive and everyday product launches.
In 2023, 59% of all innovations and 100% of distinctive innovations came from brands. Of innovating brand owners, P&G leads the league table, followed by Unilever, Mars and Mondelez. Farmfoods also made the league table of top innovators.
The data covered a basket of 89 categories including food, beverages, household care, personal care and petfood products, sourced from Europanel’s BG20 initiative, a global research initiative to uncover the success of brands in the fmcg market.
Tesco was the supermarket that listed the most distinctive innovations, with struggling Asda launching the most everyday innovations.
Noble added: “Fluctuations in the numbers of innovations reflect the financial pressures facing the industry, with a time lag. There are strong incentives for brand owners to innovate so it is concerning to see innovation numbers in decline.”
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