By John Cahalane, CEO, Kerry North America
Key takeaways:
- Strategic cost management through reformulation: With ingredient costs rising dramatically (cocoa up 400%, citrus affected by disease), reformulation offers a critical path to maintain competitive pricing while navigating supply chain volatility and tariff challenges.
- Health-focused innovation drives market opportunity: Consumer demand for reduced sugar, sodium, and enhanced functional ingredients (especially with GLP-1 medication adoption) creates significant reformulation opportunities that can deliver both wellness benefits and taste satisfaction.
- Sustainability and waste reduction enhance brand value: Reformulating for extended shelf life and clean label ingredients addresses consumer frustrations with food waste (69% would buy waste-reducing products) while building trust through natural preservation and simplified ingredient lists.
In today’s rapidly evolving food and beverage industry, reformulation has emerged as a critical strategy for companies aiming to stay competitive while addressing multiple challenges. Reformulation involves science and innovation, applied to the processing or composition of food and beverage products to create better-for-you, sustainable, and cost-effective solutions that are convenient and delicious for consumers. As consumers demand more from their food and are increasingly mindful of costs, this approach is essential for companies also navigating the complexities of sourcing, supply chain challenges, and regulatory and trade issues.
Maximizing resources with smart solutions
According to the 2025 Manufacturing Outlook Survey by Food Processing, cost control has become a primary focus for food and beverage manufacturers. Global trade tensions and rising tariffs have significantly impacted ingredient costs, making it important for manufacturers to find cost-effective alternatives. By optimizing ingredients and adjusting recipes, brands can maintain competitive pricing without compromising taste. For instance, cocoa is a prominent and beloved flavour throughout the world, and too desired to leave to supply chain uncertainty. With increased consumer demand for transparent sourcing and cost-effective solutions, and climate change taking a toll on crops and the agriculture sector, the cocoa crisis has reached an all-time high strain, with prices up 400% in recent years.
Cocoa is not the only beloved flavour affected by supply chain volatility. According to the USDA, millions of citrus crops have been affected by greening disease, a bacterial infection impacting citrus plants. Sick citrus trees have thwarted supply and increased prices. Through innovation and science-backed solutions, companies can adjust recipes to maximize flavour and minimize cost or reliance on difficult-to-source ingredients like cocoa and citrus.
Companies must find a strategic approach to the tariff challenge, one that balances fluctuating ingredient costs, regulatory compliance, market shifts, and consumer demands. It’s critical to navigate these complex regulatory and geopolitical landscapes, while ensuring resulting reformulated products meet the highest standards of quality and safety – without any compromise on the finished products.
Personalized nutrition
Reformulation plays a crucial role in addressing the evolving health needs of consumers. Health-conscious choices, especially with the adoption of GLP-1 medications are positively trending. Consumers are seeking products lower in sugar, sodium, and fat, while also higher in protein and functional ingredients.
Kerry’s Sensibly Sweet 2023 research found that three in four consumers wanted to reduce sugar in their diets, yet great taste is non-negotiable. As healthier lifestyles are prioritized, shoppers seek products that will help them achieve their wellness goals while satisfying their taste buds. But can consumers have both? In today’s world and as we look to the future, the only option is “yes.” Renovating or reformulating an ingredient list to reduce sugar while maximizing taste is the solution for today’s health-conscious consumer.
Nearly two in five US consumers are aware of the amount of sodium/salt in their diet. According to the US Centers for Disease Control and Prevention (CDC), Americans on average consume upwards of 3,300 milligrams of sodium per day, over 1,000 mg more than the federally recommended amount. Why does this matter? Excessive sodium can lead to elevated blood pressure and increase the risk of heart disease, meaning the average American would have to reduce their sodium intake to achieve better health. However, sodium plays an important role in a food or beverage product, not just from a savory taste perspective, but also in terms of natural preservation. This scenario provides an ideal setting for reformulation: experimenting with healthier recipe development while ensuring the taste is as good as — or even better than — the original.
As consumer behavior shifts towards a more proactive approach to health management, they want to support their broader health needs; addressing digestion, immunity, cognitive, and women’s health has become a priority for many. With well-being front and center, it’s vital that brands offer products made with trusted, science-backed ingredients that align with these wellness demands.
Take gut health, for example. As consumers increasingly recognize the impact gut microbiome has on immunity, cognitive health, skin health, and more, demand for proactive approaches to wellness and healthy aging is rising. Additionally, for the increasing GLP-1 user population, gut and digestive health is becoming more prevalent, to combat unpleasant side effects. Renovating products and recipes to incorporate these solutions can help brands connect with health-conscious consumers looking for convenient products that support their overall wellbeing.
Considering sustainability
Reformulation offers several strategic benefits beyond cost control and regulatory compliance. It empowers manufacturers to reduce waste, streamline production, and enhance sustainability. By leveraging advances in food science and processing technologies, companies can create high-quality products that meet consumer expectations while improving taste, texture, and safety with fewer, more sustainable components. This innovation-driven approach supports a healthier, more efficient, and environmentally responsible food system.
Consumers are frustrated by products that spoil quickly, harming brand reputation and fuelling negative social media attention. Our research has found that 69% of consumers would purchase a product formulated to help them reduce food waste. By reformulating ingredients and optimizing processes with natural preservation systems, companies can extend shelf life, reduce food waste, and enhance freshness — boosting consumer satisfaction, brand loyalty, and sustainability.
Another key aspect is the move toward clean label formulations and local sourcing — simplifying ingredient lists and removing artificial additives. This not only builds consumer trust but also reduces reliance on high-carbon, resource-intensive ingredients. We’ve discovered an overwhelming 82% of consumers find natural preservatives acceptable. In addition, clean label strategies often lead to more efficient sourcing, and production, helping companies enhance resilience and reduce transportation-related emissions across the supply chain.
Reformulation is key
Reformulation is a strategic must for food and beverage companies aiming to thrive in a challenging and dynamic market. By focusing on cost reduction, health-driven innovation, and waste minimization, companies can navigate sourcing, supply chain, and trade issues while delivering high-quality, profitable products that resonate with today’s health-conscious consumers. Reformulation will be encouraged, if not required, in the future, revealing a window of opportunity for manufacturers to reformulate now.
John Cahalane is Kerry’s President and CEO, North America. John drives business and innovation in Kerry’s largest market, with almost 6,000 employees and 50 manufacturing sites. He’s held several leadership roles in finance, commercial, operations, and general management, including Kerry President and CEO of Latin America and Asia Pacific, Middle East, and Africa Markets.
