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Why Now Is the Time to Rethink Formulation Cost Structures

RE-NUT AG | January 9, 2026

As the new year begins, procurement and product development teams across the food industry are staring down hard numbers. Ingredient costs have surged in recent years, and supply chain disruptions remain a stubborn reality. Early-year budget reviews make one thing clear: continuing with “business as usual” formulation could eat into margins and derail product plans. Decision-makers are under pressure to control costs while still delivering quality and innovation to the market. In this context, now is the prime time to rethink formulation cost structures, fundamentally revisiting what goes into products and how those choices impact the bottom line.

Mounting Cost Pressures and Supply Uncertainty

It’s no secret that the cost of food inputs has climbed dramatically. Pandemic aftershocks, geopolitical upheavals, and inflation have driven up prices for commodities and ingredients across the board. U.S. grocery prices jumped about 24% between early 2020 and early 2023, including an almost 10% surge in 2022 alone. While inflation has cooled somewhat since its peak, cost of food-at-home increased 2.7% compared to August 2024. At the same time, global supply instability is an ongoing concern. Logistics logjams, extreme weather, and conflicts have exposed the fragility of ingredient supply lines. For instance, the war in Ukraine sent shockwaves through food markets – wheat prices spiked 76% by spring 2022 and a shortage of sunflower oil forced manufacturers into sudden recipe changes .

Procurement directors setting budgets for 2026 cannot simply assume last year’s prices or availability. The combination of inflation, rising fuel and ongoing supply chain issues has driven significant cost increases into 2025–26, and experts warn these pressures will continue influencing food costs into 2026. In other words, volatility is the new normal.

For decision-makers, this creates a double mandate: control what costs you can, and build flexibility for what you can’t. Many are asking: Where can we find savings or efficiencies within our product formulas themselves?

Traditional Cost-Cutting Levers Are Limited

When ingredient bills go up, companies have historically reached for a few familiar, if uncomfortable, options. One is simply passing cost increases to consumers via higher pricing, a path that risks denting sales in a price-sensitive market. Another tactic is “shrinkflation,” quietly reducing package sizes or product counts for the same price. This too can backfire, potentially alienating loyal customers who notice they’re getting less. Neither option is appealing in an environment where shoppers are already stretched and watching value closely.

Of course, cutting internal costs is also on the table: optimizing operations, reducing waste, or negotiating better supplier contracts. Yet with ingredient and freight costs still elevated, operational efficiencies alone may not offset the inflationary pressure. Simply put, traditional levers are not enough to protect margins without potentially compromising market share or brand trust. This leaves one area squarely in the spotlight: the formulation itself.

RE-NUT®'s reformulated Almond Milk - Made with In-shell Almonds

Speed Matters: Reformulation Under Pressure

Another reality facing product teams is the need for agility in reformulating when circumstances change. Over the past couple of years, many companies have been forced into rapid recipe adjustments due to external shocks. The sunflower oil example is a case in point: within weeks of the Ukraine conflict, food manufacturers had to scramble for alternatives like rapeseed or coconut oil to keep production running. Those that could reformulate quickly avoided empty shelves, whereas those slower to adapt lost sales.

Beyond crisis-driven changes, there’s also ever-present pressure to improve cost of goods sold (COGS). If a particular ingredient’s price doubles or its lead time becomes erratic, R&D is tasked with finding a substitute – and fast. Retailers may demand cost concessions that force a reformulation to cheaper components. Or a competitor might launch a similar product at a lower price point, spurring a need to revisit your own formula costs. In all cases, the timelines for reformulation are tighter than ever. Being nimble with product formulas has become a competitive advantage.

However, frequent, rushed reformulation isn’t sustainable without a smarter strategy. Ad hoc recipe tweaks can introduce risks: the product’s taste or texture might suffer, new allergens could be introduced, or regulatory compliance could be jeopardized. Thus, the goal for 2026 is not just any reformulation, but strategic reformulation – the kind that reduces cost and complexity while maintaining quality. Achieving that starts with rethinking the very structure of your formulations.

Rethinking Formulation Cost Structures

What do we mean by “formulation cost structure”? In simple terms, it’s looking at how each ingredient in a product contributes to cost, function, and value and then optimizing that composition for efficiency. Rethinking cost structure involves probing questions like:

Which ingredients are driving up cost the most, and are there lower-cost alternatives or sources?
Are we using more components than necessary to deliver the desired flavor, texture, or nutrition? Could a simpler recipe achieve the same goals?
What is the “hidden” cost of complexity in our formula?

By re-evaluating formulations with these questions in mind, companies often find opportunities to consolidate and simplify. For example, perhaps a sauce recipe relies on three different thickeners and stabilizers, all expensive hydrocolloids sourced from across the globe. Reformulating with a single, multi-functional thickening agent could maintain the same consistency with fewer SKUs to purchase and stock. The result is not only a lower aggregate ingredient cost, but also less supply chain risk and a leaner manufacturing process.

In essence, now is the time to “engineer out” cost inefficiencies in product formulas. Forward-thinking brands are taking a proactive stance: instead of waiting for the next crisis to force a change, they are preemptively optimizing recipes.

The Almond Advantage: Cost-Efficient and Clean-Label Solutions

In the quest to consolidate ingredients and cut costs, almond-based ingredients have emerged as versatile, cost-efficient options. Our almond-derived formulation solutions – from almond flour to almond milk bases – illustrate how one ingredient can deliver multiple benefits:

Natural Multi-Functionality: Almond flour isn’t just a gluten-free substitute for wheat; it’s a multifunctional workhorse. It provides structure and bulk in baked goods, but also brings protein and dietary fiber to the formula, thanks to almonds’ rich nutrient profile. This means it can partially or fully replace not only conventional flour but also additional protein powders or fiber additives that you might otherwise add to boost nutrition. One ingredient does the job of many, helping lower your overall ingredient spend.
Built-In Fiber, No Extra Additives Needed: Fiber fortification is top-of-mind for many product developers, given that fewer than 5% of Americans consume enough fiber. Almond flour contains a high level of natural fiber (especially our almond flour which is made from finely milled almonds with shells and defatted for extra fiber content). By formulating with almond flour, you can often achieve “good source of fiber” levels in your product without resorting to added fibers like inulin or oat fiber. That’s a cost saving and a cleaner label, one less line in the ingredient list.
Clean Label and Consumer Appeal: Almonds are a familiar, trusted food. Using almond flour or almond milk concentrate as key ingredients allows you to label simply “almond flour” or “almond base” – terms that resonate positively with health-conscious consumers. There’s no chemical-sounding jargon. You’re also leveraging the plant-based appeal: almond ingredients are naturally dairy-free, gluten-free, and non-GMO, checking multiple boxes in one go. For decision-makers, this can translate to a product that’s easier to market and justify on shelf, potentially supporting better sales which offset formulation costs.
Processing and Stability Benefits: Our almond milk base (a concentrated almond ingredient for beverages and dairy alternatives) is designed to simplify production. Instead of handling raw almonds (soaking, grinding, filtering) or juggling various thickeners and stabilizers to create a creamy texture in, say, an almond-based smoothie or dessert, manufacturers can use a ready almond base. This single ingredient delivers the desired creamy mouthfeel and consistency, thanks to the natural fats and proteins in almonds, often eliminating the need for gums or emulsifiers. Fewer process steps and fewer additives not only save cost, but also reduce the risk of supply disruptions (you’re reliant on a stable almond supply and our production, rather than many niche ingredients that might hit shortages).

In short, almond flour and almond milk ingredients offer a timely solution to current cost structure woes. They embody the principle of doing more with less: more functionality, nutrition, and consumer appeal with fewer ingredients and additives. And importantly for procurement considerations, almond ingredients have a robust supply chain. Almonds are cultivated at large scale (California alone produces over 80% of the world’s almonds), and while agricultural conditions can vary year to year, the almond industry has made strides in supply stability. By partnering with a supplier (using RE-NUT® in-shell technology) that provides consistent, high-quality almond ingredients, companies gain a measure of supply security in addition to cost efficiency.

Ready for Scale: From Pilot to 2027 Launch

Ready to ride the next wave of food innovation? Whether you’re formulating a high-fiber snack, a low-sugar treat, or a planet-friendly beverage, RE-NUT’s ingredient systems might just be the toolkit you need for 2025 and beyond. All these benefits will soon be available at an industrial scale. RE-NUT® is currently building out the Blueprint Line, our first full-scale production line for in-shell almond processing, located in North America. This state-of-the-art facility, to be operational by Q1 2027, will mark the commercial debut of in-shell almond flour.

Ready to innovate with us? Get in touch to learn more about our early partnership program, obtain sample batches for testing, or schedule a demo. Together, let’s create the next generation of confections that are not only irresistibly delicious, but also rich in goodness and rooted in sustainability. The future of nut-powered, better-for-you treats is almost here, and we’d be thrilled to have you on board.

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