Baking & Snack - July 2022 - 20

INNOVATIONS & INGREDIENTS
" THESE DATA REPRESENT BAKERIES
SAYING IT WOULD BE HELPFUL IF
INGREDIENT SUPPLIERS PROVIDED
THESE SUPPORTS FOR US. "
Marjorie Hellmer, Cypress Research
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related priorities pulling attention
away from invention and innovation.
With so many bakers looking to invest
in equipment and operational efficiencies
to keep up with demand, this is
unsurprising.
" We also see four in 10 bakers reporting
that they are struggling to access
ingredients to support product
development, but this supply chain
issue isn't the leading reason, " Ms.
Hellmer
explained.
" The
obstacles
holding back true invention are the
focus on cost savings and the focus on
existing brands. "
This is impacting bakers risk tolerance
as well as they begin to regain
their appetite for product development.
" When we talk about risk tolerance,
bakeries generally appear poised to accept
moderate risk well into 2023, " Ms.
Hellmer noted. " This is a more conservative
approach than bakers were
applying pre-pandemic. We're in a
time of moderation and playing things
close to the vest. "
For example, for invention, the
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riskiest form of product development,
prior to the pandemic 20% of
survey respondents reported a high
company risk tolerance and 59% reported
a moderate risk tolerance. At
the height of the pandemic, high risk
tolerance fell to 16% and moderate
risk tolerance fell even more dramatically
to 30%. And 55% of survey
respondents reported a low company
risk tolerance for invention. For the
next 12 to 18 months, high risk tolerance
is holding steady at 16%, while
companies willing to resume a moderate
level of risk for true inventionrelated
initiatives has grown to 62%.
Innovation saw similar declines and
gains, but formulation, the least risky
version of product development, has
seen a 12-point increase in respondents
reporting a high company risk
tolerance from the height of the pandemic
to the next 12 to 18 months.
In fact, 29% reported a high risk tolerance
for formulation initiatives for
the future, which surpasses even prepandemic
levels of 22%. And 18% reported
a low risk tolerance for the future
of formulation, compared to 23%
before 2018.
" Despite bakers playing product development
more conservatively overall,
many companies seem to be far
less risk averse when we look at product
reformulation. They are willing to
take a lot more risk, even more than
pre-pandemic levels, " Ms. Hellmer
pointed out. " Even more so than in innovation
and invention. "
Overall, the baking industry's appetite
for new product development
is recovering as it emerges from the
pandemic but with more caution.
Even in the budget numbers, 31%
of respondents reported their company
increased the R&D department's
budget in 2022 compared to
last year, while 42% said it remained
the same. Only 15% of companies reduced
their R&D year-on-year budgets,
while 12% didn't know. All of
this points to a shy pivot back toward
new products.
Making waves
As bakers begin developing new
products again, their sources of inspiration
have remained largely the
same, even as they have grown in
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Baking & Snack - July 2022

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