TraceGains survey reveals tech adoption disconnect between brands going “all in” on AI and new product development despite weak infrastructure and manual processes
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 TraceGains 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Despite growing investment in AI and digital tools, most F&B brands remain heavily reliant on outdated manual processes, slowing innovation and increasing risk.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 in the TraceGains survey, 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 TraceGains report and explore how F&B brands can digitize and scale their NPD efforts, visit www.tracegains.com.
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