Three food and beverage innovation trends for 2023
From rising costs to sustainability, traceability and the continued evolution of regulatory landscapes, what’s shaping food and beverage innovation for the year ahead?
1. Confluence of sustainability and cost saving
We expect two headline issues, the cost-of-living crisis and sustainability, to converge in 2023 R&D strategies. Underpinning these would be the aftereffects of the global pandemic, Russia – Ukraine conflict, economic challenges and the faster-than-ever pace of technology development. The overlap between these factors is yet to be fully explored by food and beverage companies, yet it holds much potential. Innovations that reduce energy consumption or waste in the supply chain may deliver environmental benefits that may translate into consumer cost savings.
Sustainability is imperative, and one thing is clear, businesses can’t wait for governments to align on global objectives before acting on sustainability. While the sector had a higher profile at COP27 than at previous events (with two dedicated pavilions: one for food systems, one for food and agriculture), there was reported to be widespread dissatisfaction at what was achieved.
Meanwhile, as food inflation bites globally, consumers will look to the industry to keep prices affordable. Any measures which can improve efficiency and manage costs will be welcomed by all stakeholders.
Innovation efforts need to focus on products, processing and production systems, and the wider farm-to-fork ecosystem, to address these interconnected issues. Reformulation will be high on the agenda in the coming year to deliver short- to mid-term benefits. Investigating alternative ingredients or recipe adaptations could yield rapid returns on both sustainability and cost efficiency.
Alongside this, sector leaders will focus on bigger changes that may take longer to come to fruition. This could encompass everything from business models that promote the reduction and reuse of packaging to the development of foods which require less energy input during production and home preparation.
2. Supply chain innovation in Food and Beverage
Increased demand for shorter, more resilient food and beverage supply chains is set to drive significant change. Sustainability and food security goals coupled with consumer expectations have led to greater emphasis being placed on supply chain visibility and traceability too. This goes further than ingredients and finished products. It also encompasses agricultural inputs such as fertiliser as well as gases and other raw materials used in processing and production.
With pressure mounting for the introduction of holistic eco-labelling systems, many food and beverage organisations are looking for ways to get ahead of the curve. Data science will be a critical enabler, unlocking new capabilities and deeper supply chain insights. For instance, the ability to facilitate more accurate and extensive tracking of raw materials through the supply chain will be beneficial on multiple levels. As well as informing decision-making, it will provide the evidence to underpin demonstrable claims about products’ sustainability credentials.
More sophisticated management of food safety and quality in the supply chain also becomes easier with advanced data-led solutions. This can include the prediction, identification and, therefore, reduction of risks such as upstream contamination or exposure to conditions which may accelerate microbial spoilage.
AI capabilities will support supply chain innovation too, enabling more intelligent sourcing of ingredients. This technology can be used to help identify the most nutritious, sustainable, and cost-effective ingredient sources. So new product development, or the reformulation of existing products, can be accelerated to deliver better health, sustainability, and cost-saving outcomes sooner.
3. Regulation enabling the future food system
While regulation is sometimes perceived as a barrier to innovation, recent activity indicates that it can act as an enabler for some emerging food products and production methods.
This time last year, Eat Just obtained landmark approval for a cell-cultured chicken product in Singapore. We predicted that ongoing evolution of the alternative protein market would be a key trend for 2022. Shortly after this, the UK’s Food Standards Agency said its research showed that a third of UK consumers are willing to try lab-grown meat. As it launched a report into alternative sources of protein for human consumption, the agency underlined its commitment to “supporting food innovation, especially where there are potential benefits for dietary health, for protecting the environment or for boosting the UK economy.” More recently, as it announced the successful completion of its pre-market consultation for cultured meat producer Upside Foods, the US Food and Drug Administration said, “the world is experiencing a food revolution and [we are] committed to supporting innovation.” The focus is clearly shifting, and we believe will continue to shift towards scale-up and process optimisation to deliver these alternatives at cost.
Together, these developments suggest that alternative protein innovations can enjoy a favourable reception from regulators. This boosts stakeholder and investor confidence that progressive activity, in this vein, strikes an effective balance between risk and potential reward.
Further regulatory developments that could pave the way for more focused innovation include work towards more objective and consistent clarification of terms such as ‘natural’ and ‘healthy’.
A web of innovation opportunities in Food and Beverage
There is a great deal of interplay between the above innovation trends, and sustainability is a common thread. Consumer health is also closely aligned, as the European Commission’s Farm to Fork Strategy emphasises with its description of “inextricable links between healthy people, healthy societies and a healthy planet”. The current cost-of-living crisis provides further impetus to discover new, resource-efficient ways to meet people’s nutritional needs.
Find out more about how we support all aspects of food and beverage innovation here.