How and why is a food product recipe converted to a formula?

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A COMPREHENSIVE GUIDE OF THE COSTS INVOLVED IN
NEW PRODUCT DEVELOPMENT
An Academic presentation by Dr. Nancy Agnes,
Head, Technical Operations, FoodResearchLab Group
www.foodresearchlab.com Email
info_at_foodresearchlab.com
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Introduction

• New product development is a deciding factor for
  the growth and sustainability of a business.
• A systematic approach for a new product
  development contributes to overall success by
  increased market share and higher revenue
  generation.
• However, the entrepreneur must have an idea
  regarding the estimate of the cost since knowing
  the cost helps the entrepreneur to determine the
  feasibility of the project and obtain funds for
  investment.
• Developing a new product is a staged process,
  comprising of ideation, market research,
  ingredient research, prototype development and
  shelf life studies.
• Understanding the cost involved in each stage is
  crucial for effective cost management.

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Cost of developing a new product
The following section elaborates on the cost
involved in new product development in Indian
Rupees (INR) at every stage, helpful for
start-ups in India.
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IDEA GENERATION

• The primary objective of idea generation or
  ideation is to develop numerous ideas that lays
  the foundation the strategy of new product
  development.
• The ideas are often generated by conducting an
  in-depth consumer market research, which helps
  businesses obtain consumer insights, a deciding
  factor which contributes to the success of a
  product.
• The ideas are then screened for feasibility and
  potential for success, leading to a proof of
  concept (POC).
• The cost involved for ideation can range from ?
  1, 00,000 to ? 2, 00,000, and conducting market
  research can cost from ? 1, 50,000 to ? 2,
  50,000.

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02
INGREDIENT RESEARCH

• Ingredient research refers to the process of
  selecting, analysing and choosing the components
  or ingredients best suited for the product.
• The main objective of an ingredient research is
  to find the best combination of ingredients that
  meets the product specifications and comply with
  the regulations and adhere to quality standards.
• The cost of ingredient research may vary from ?
  1, 00,000 to ? 2, 00,000 depending on the
  product and the ingredients.

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PROTOTYPE DEVELOPMENT

• A prototype can be defined as a replica of the
  actual product. A prototype closely resembles the
  actual product in terms of its sensory profile.
• Prototypes are important since they help the
  start-ups to determine whether developing the
  final product is feasible before investing
  significant resources in developing the product,
  thus making the process more economical.
• The cost of prototyping a product ranges from ?
  2, 00,000 to ? 3, 00,000 for a product.

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04
SHELF LIFE STUDIES

• Shelf life studies involve testing the product
  for quality, safety and stability.
• In a new product development, shelf life studies
  are vital to ensure that the products remain
  stable, safe and of a high quality when the
  product is stored in consumers homes.
• The cost for shelf life determination studies can
  vary from ? 1, 00,000 to ? 2, 00,000 provided
  that the recipe for the formulation is already
  available.

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CONSIDERATIONS

• The costs mentioned at each stage of product
  development are for a formulation made using two
  to seven ingredients. The costs may be higher if
  the product is made using organic ingredients.
• The cost of conducting a clinical trial for
  formulating a nutraceutical or herbal product
  depends on the available resources, study
  participants and adverse reactions.
• Pilot manufacturing comprises of developing
  products at a small-scale. The cost required for
  pilot manufacturing of a product depends on the
  Minimum Order Quantity (MOQ), cost of the raw
  materials and logistics 1.

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Conclusion

• New product Development follows a systematic
  process, which helps entrepreneurs to ensure that
  the product they have intended to formulate is
  feasible.
• The basic steps involved in developing a new
  product include idea generation and market
  research, ingredient research, prototype
  development and shelf life analysis.
• The total cost for developing a new product can
  vary from ? 6, 50,000 to ? 11, 50,000.
• The cost may be higher for a product made using
  organic ingredients. Effective cost management is
  key to entrepreneurial success.

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HOW GUIRES FRL GLOBAL CONTRACT RD CAN HELP

• We are a team of seasoned food scientists and
  technologists who offer new product development
  services. Our range of product development
  services include

• Food Product Development,
• Beverage Formulation,
• Nutraceutical Formulation,
• Cosmeceutical Product Development,
• Herbal Formulation,
• Microbiome Solutions,
• Flavour Development and
• Animal and Seafood Product Development.

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• We assist with product strategy, prototype,
  formulation, scale-up, sourcing, marketing and
  reverse engineering.
• Our comprehensive assistance ensures that the
  products have an excellent sensory profile, align
  with consumer insights and adhere to the
  regulations, ensuring their success.

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INDIA
91 9566299022
EMAIL
info_at_foodresearchlab.com