CPG Formulas

The Lempert Report
September 02, 2022

Phil: What we've seen and we've talked about, and, we've talked with a good friend of ours TraceGains about this, because of the pandemic, because of climate change, because of a lot of shortages, a lot of manufacturers, you know, have had to switch ingredients. 

Phil: In fact, what TraceGains says is 90% of manufacturers say higher ingredient prices have shaped the way that they're doing business today. And that means modifying or creating new formulas. The report that just came out, it's the 2022 State of Supply Distribution Report. They surveyed more than 300 food and beverage manufacturers. You know, it's a must read, you've really gotta understand this and what Trace Gains does, which is so cool. For their members, I guess, for lack of a better word, they've got a dashboard, so let's say, you know, you can't get cardamom. What they do is they can source cardamom or alternatives of cardamom in different parts of the world so that you can, you know, continue to make your product. What impact does this have Sally, when we look at the changing ingredients on and changing recipes for a lot of products, is this going to freak out consumers? 

Sally: Well, you know, I'm a firm believer in transparency and I think that this is something that brands have to communicate. However, I think it's smart for brands to find ways to use alternative ingredients. Maybe it's a time to also look for healthier ingredients that they could use. You know, I know there's a money saving issues and usually the less healthy ones are the cheaper ingredients, but you know what this pandemic time and these supply chain issues have, you know, have afforded companies right now is to take a look at how they can improve their system and where they can save money. It's kind of forced a lot of companies into that, I think. 

Phil: And, and to your first point, you know, the key is transparency for those companies that are just changing their formula, changing ingredients, not calling it out, not telling you know, their shoppers, why I think frankly they're gonna have issues, they're gonna have problems and how to deal with it. So, you know, yes, you've gotta change your ingredients. And retailers have a responsibility for this as well. When you have, you know, these companies changing ingredients, make sure that you're updating all the information on your website because a lot of the information that we hear from retailers constantly with eCommerce is that 50% of the information that's on the website about a product, whether it's nutritional information, whether it's ingredients, are incorrect. And again, when you're changing ingredients that most likely is gonna change nutritionals as well. So transparency, transparency, transparency. Thanks Sally.