Food and beverage product development investment might be down from the heyday of 2021, when fintech companies poured billions into the industry, but the slowdown has led to a new era of collaboration, according to experts at Future Food-Tech San Francisco.
Panelists in the session “Strengthening the Innovations Fueling Food System Transformation” discussed the state of the industry and how industry stakeholders are searching for new collaborations in food system transformation.
While investment remains down relative to five years ago, Holly Freishtat, senior director of Feeding Change at the Milken Institute, said the food industry is in a time of “intense collaboration” to create a healthier food system.
“We are in a food system that needs to be transformed,” she said, adding that innovation is needed not just through the development of individual products but also within the larger food system.
GLP-1 and the innovation reset
The rapid rise of GLP-1 adoption is among the biggest motivators for new product development by food and beverage manufacturers. Cargill CTO Florian Schattenmann noted that US adult use jumped from 3.5% in 2024 to 11% in 2025.
“The need for innovation, from our perspective, is as high as ever,” Schattenmann said, adding that progress requires collaboration between all parts of that innovation ecosystem.
GLP-1 adoption has created an opportunity “we never really expected in the food space,” according to Freishtat.
“How do we make sure that we’re aligning the correct foods with the GLP-1? I think it’s really opened up this opportunity of integration between the prescriptions and the food benefits,” she said.
Meeting the moment
While GLP-1 drugs are changing the game for food formulation, Freishtat said the focus now for CPG companies, investors, insurers and other stakeholders is addressing what is healthy versus unhealthy.
“What does non-healthy look like for a Medicare Advantage, what does non-healthy food look like in SNAP (Supplemental Nutrition Assistance Program), and where is that commonality?” she said. “At the end of the day, we’re not going to see the health outcomes we like if it’s not realistic and tangible for the consumer.”
The sentiment was reiterated by Tara Glasgow, chief science officer and executive vice president of research and development at PepsiCo, who noted that 80% of consumers are searching for healthier foods.
“It’s a huge movement in consumers parallel with a huge movement in science that I think creates a ripe opportunity for transformation,” she said. “Eighty percent of people is not a fad.”
Focus on consumer needs
Focusing on the unmet needs of consumers is key to transforming the food system, according to Glasgow.
She noted that the company, in developing Pepsi’s Muscle Milk product, realized that consumers were more concerned about maintaining muscle mass and achieving satiety than building muscle.
She added: Companies must be willing to engage in “hard conversations” early on in product development to design the product correctly from the start.
