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Connected data helps food manufacturers to lower financial risks
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Friday, 13 November, 2026, 17 : 00 PM [IST]
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Colorado, USA
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TraceGains has responded to new research from the Food & Drink Federation (FDF) and Argon & Co, saying it highlights a growing challenge for food manufacturers: healthier reformulation may begin with a recipe change, but its impact can extend across sourcing, compliance, packaging, production and commercial performance.
The findings underline the need for connected data and digital processes as manufacturers face rising costs, risks and complexity when developing or reformulating products. The research found that 63 per cent of manufacturers typically complete at least six healthier product innovation projects a year, with three of the manufacturers surveyed investing between £5 million and £10 million. Despite this commitment, 69 per cent of manufacturers have had a reformulated product fail to reach launch, or be removed from shelves after launch, while 63 per cent experienced sales that were lower than expected.
For large businesses, a single reformulation project can cost up to £5 million, including 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.
Bal Chand, European marketing leader at TraceGains, said, “Healthier reformulation is often only treated as a formulation challenge, but the consequences of a change reach far beyond the recipe. A decision made in product development can affect ingredient sourcing, regulatory compliance, nutrition, packaging, production and ultimately whether the product succeeds commercially. Manufacturers need visibility across those dependencies before significant time and investment are committed.”
The operational complexity of healthier innovation is reinforced by the regulatory environment. FDF research found that 69 per cent of respondents ranked greater regulatory certainty as the most important condition for successful healthier product innovation. The report also found that 81 per cent of respondents already reformulated products in response to health regulations, while 50 per cent increased innovation activity.
When supplier information, ingredient specifications, regulatory and product data sit in separate systems or are managed through manual processes, teams can struggle to understand the downstream impact of a change until very late in the development cycle.
“A connected data foundation gives teams the visibility to assess how a change could affect compliance, sourcing, formulation, packaging and commercialisation,” added Chand. “Once that foundation is in place, purpose-built AI can drive even greater efficiency by helping teams evaluate options faster, understand the potential impact of change earlier and make more confident decisions. But importantly, the value of AI depends on the quality and context of the data behind it.”
TraceGains AI Formulation brings supplier and ingredient intelligence, compliance data and formulation tools into the workflows used by food scientists and product development teams.
“This can help manufacturers evaluate options faster, understand the potential impact of change earlier and make more confident investment choices,” Chand said.
TraceGains is also inviting European food and beverage manufacturers to help establish how prepared the wider industry is to manage increasing complexity through its European Food & Beverage Digitalisation Benchmark 2026. The independent survey examines digitalisation across ingredient sourcing, supplier collaboration, regulatory compliance, quality and new product development. Manufacturers are encouraged to contribute their perspective and help build a clearer industry-wide picture of digital readiness across Europe.
“The FDF research shows what is at stake when innovation decisions are complex, costly and difficult to reverse,” said Chand. “Our European benchmark looks at whether manufacturers have the connected foundations needed to manage that complexity today.”
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