Should Food Manufacturers Outsource Their Research and Development?
The bread and butter of a food manufacturer comes from processing and selling their product to retail grocery stores, but changing tastes have forced many to consider how much they allocate to changing their recipes – when should food manufacturers outsource their research and development out of house?
The answer to that question largely boils down to budgetary concerns. As large food manufacturers slash their research and development budgets to focus their money on their main offerings, smaller food manufacturers have followed suit.
Determining whether to outsource your research and development starts with determining the goals of your company. Is your product competitive in the supermarket? How much of your budget can you afford to allocate to different tasks? We outline the benefits and industry trends below.
Benefits and Drawbacks of Outsourcing Your Food Manufacturing Research and Development
Outsourcing your R&D has two primary benefits to smaller food manufacturers: dramatically reduced risk, and greater innovative potential. When developing products in-house, the risk for failure is always a looming threat. Conversely, outsourcing this function means investing a comparatively smaller amount of capital for greater potential results.
Drawbacks emerge out of the fact that these industry secrets aren’t kept behind the lock and key of in-house manufacturers. Outsourcing research and development means that you aren’t in full control of your manufacturing process.
Generally speaking, however, the larger trend of outsourcing R&D points to the fact that the benefits appear to outweigh the costs. This can be seen by the largest players in the industry.
Are Food Manufacturers Investing in Research and Development?
It is difficult to quantify exactly how many food manufacturers are outsourcing their research and development, but many industry leaders suggest that it has become a growing trend at the highest levels. Big food manufacturing companies have cut back drastically on their research and development. While this has allowed them to allocate their budgets elsewhere, it has stunted their ability to generate revenue off of new consumer trends
Some of the largest food manufacturers have taken a new approach to their R&D efforts – buying smaller companies with innovative ideas and absorbing them into their own business. While this allows for them to expand their offerings, buy-outs tend to focus on the productions rather than innovation.
For small and mid-sized food manufacturers, purchasing R&D companies is an untenable solution for a changing audience. Thankfully, options exist even on a smaller budget.
How Can My Manufacturing Line Benefit from Outsourced R&D?
Consider the budget of a food manufacturer: between labor and hiring costs, production costs, and simply meeting the bottom line, these businesses already have a strained budget. Adding the cost of an in-house R&D team adds expense that is better suited for day-to-day strategic operations.
To diversify their offerings, some food manufacturers will expand their offerings into different types of food products, such as baked or frozen foods. This decision isn’t as simple as it may appear: new types of goods necessitate having the machines available on a factory floor to produce and sell these goods. This might require finding a partner to build and design custom automation designed specifically for your new product.
Thankfully, automation tends to have multiple applications that can be rearranged to suit your assembly line. An automation partner like Custom Cut Metals can help your business get custom tools suited for your unique production line setup.
Custom Cut Metals: A Leader in Innovative Automation
While the day-to-day operations of a food manufacturer may depend on the repetition of assembling food into delicious products, innovation is the key differentiator that plays to the tastes of your audience. Finding what entices your customers can spell the difference between success and failure in a competitive industry like food manufacturing.
Custom Cut Metals is a leader in providing innovation at an affordable budget. Whether that be designing our own line of innovative products such as nanobubble produce cleaning or affordable cutting tools for fresh cut produce.
Outsourcing your research and development for food manufacturing can be a key differentiator between you and your competition. Let us handle designing the tools to get your job done. Contact us today for more information about our products and services.