Operational realities of healthier product innovation
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UK food and drink manufacturers have invested in making their products healthier over decades, often ahead of regulation rather than in response to it. However, rising costs, regulatory uncertainty, trade barriers and commercial pressures are making it increasingly difficult to justify further investment in healthier innovation.
This report, produced by Argon & Co, in collaboration with FDF, sets out what healthier product innovation means for manufacturers, the time, cost and complexity involved and how government can support further progress.
With over two thirds (69%) of respondents ranking greater regulatory certainty as a top priority, FDF and its members are calling on government to provide a stable regulatory environment for at least five to ten years, to enable businesses to invest in healthier products. A key first step would be to pause their plans to change the model underpinning advertising regulations (NPM).
What the research reveals
Based on research with UK food and drink manufacturers, including a survey and in-depth interviews with businesses ranging from global multinationals to SMEs, the report identifies five key themes shaping healthier product innovation:
- Industry commitment to health-driven innovation is proven: manufacturers across all sizes have invested for decades in developing healthier recipes and formats. 81% of respondents had already reformulated products in response to health regulation.
- The true costs of healthier product innovation: product trials, scale-up testing and staff time are the largest drivers of both nutrition-led reformulation and healthier NPD spend.
- Regulatory complexity is making the UK less attractive for investment: “greater regulatory certainty” was ranked the top priority for successful healthier product innovation by 69% of respondents, and was raised, unprompted, in every interview conducted.
- The burden is heavier for SMEs: healthier product innovation consumes a much larger share of scarce resources, technical capacity and management time for smaller manufacturers, all while trying to maintain day-to-day operations.
- High effort, high risk of no reward: consumer acceptance ultimately determines whether healthier product innovation succeeds, because reformulated products deliver no public-health benefit unless consumers purchase them.
Industry commitment to health-driven innovation is proven
FDF’s Shaping a healthier future report highlights the work food and drink companies have undertaken to support healthier choices over the years. Argon & Co’s research further demonstrates this ongoing effort and commitment, with 63% of respondents reported typically completing at least six healthier product innovation projects a year.
Unsurprisingly, the number of projects per year was greater for larger companies (6-10), but this can be up to 40 or more. Every large manufacturer that answered invested at least £100,000, and three had invested between £5 and £10 million in 2025 alone. Whereas for SMEs, 83% typically complete 0-5 projects per year, investing under £100,000.
Interviews revealed that much innovation predates any regulatory requirements, driven primarily by consumer demand and health trends. More recently, health regulation has become a key driver, with 81% of respondents reformulating products and 50% increasing innovation activity in response to regulation.
The operational challenges of healthier product innovation
Making a product healthier is rarely a simple swap of one ingredient for another. Reformulation and healthier new product development are technically complex undertakings that can take years to master.
For manufacturers, the highest costs are often not ingredients, but the people and processes involved. Each project draws on highly skilled, multidisciplinary teams, from food scientists and technologists to sensory, packaging and manufacturing specialists. Large businesses reported spending up to £5 million on a single reformulation project, covering everything from skilled staff time and testing to marketing and production downtime.
Despite this investment, success is not guaranteed. Over two-thirds (69%) of manufacturers have had a reformulated product either not reach the launch stage, due to feedback from consumers, or be removed from shelves by retailers after launch. A similar number (63%) have had lower sales than expected, making the product less commercially viable.
With the government’s health strategy also shifting repeatedly without holding a stable course, the uncertainty is making the UK a less attractive place to invest.
Recommendations for government
The research concluded with three recommendations for the government to support industry in driving further investment and innovation and to deliver a more sustainable path to a healthier food system:
- Increase regulatory stability and predictability: Government should commit to longer-term policy horizons (5 to 10 years) and better regulatory alignment across the UK and overlapping policy areas.
- Allow policy changes time to take effect: Let each policy run its course and be formally evaluated before new requirements land. Government should commit to a published minimum stability period, e.g. 5 years.
- Build the wider system that healthier products need to succeed: Through consumer education, targeted small-grant funding for SMEs, replicating Scotland’s Reformulation for Health model across England, Wales and Northern Ireland; and incentives that reward healthier sales across the supply chain through mandatory healthy food sales reporting.
Explore the policy and regulatory landscape
Discover the policy frameworks, regulatory developments and industry evidence shaping healthier product innovation. These resources provide additional context on nutrient profiling, investment decisions and the measures needed to support long-term progress.
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