It’s a classic case of cause and effect: During economic downturns or uncertainty, new product launches tend to decline as businesses become more conservative in spending or taking on risks. For example, in 2020, as the COVID-19 pandemic raged around the world, global launches of novel new pet food products (not just new flavors or formulas in an existing product line) plummeted, according to data from Mintel’s Global New Product Database. Numbers have not recovered much since, except in emerging pet food markets like the Asia-Pacific.
And this year, a new U.S. policy of aggressive tariffs on many, if not most, countries has created economic turmoil, and many companies are now cutting back on new product development. That’s true in multiple categories, including pet food. Results of a poll on this site (PetfoodIndustry.com) posted in November 2025 showed just how much the current economic situation is affecting pet food innovation.
“Only 35% of respondents reported developing and launching products on schedule, while 30% indicated they are not developing new products at all,” reported my colleague, Lisa Cleaver. “Another 17% said they’re still developing products but facing delayed launch timelines, and 8% have progressed with innovation but shelved some products. An additional 10% have paused all new product development activity.”
Respondents who said their companies were cutting back on or delaying new product launches cited uncertain consumer demand as the key reason (named by 30%), followed by raw material or supply chain restraints (21%) and internal budget restraints (12%). All hint at that economic turmoil.
Contrary advice: Innovate to combat economic uncertainty
But we don’t have to read between the tea leaves to know what’s affecting new product development for these respondents’ companies, because 34% said the current economic climate has postponed most new product development activities, while 31% said it’s slowed innovation, though product development is still happening. Another 9% reported they’re maintaining their planned innovation pace, and 6% said they’ve shifted focus to line extensions vs. truly novel products.
Interesting, nearly 19% of respondents said the current economic climate has accelerated their new product development. Perhaps their companies have subscribed to the theory, espoused by some economists, that uncertain times may be the best times to focus on innovation.
For instance, in February 2025, experts from the Budget Lab at Yale University advised looking to innovation and “renovation” to fulfill emerging consumer needs in the face of an impending trade war. “While tariffs pose a significant challenge, their effects on the market can also open up new opportunities to fill gaps. Take inventory of your current product portfolio, and stay apprised of evolving consumer and category drivers,” according to the Budget Lab experts in a report developed in collaboration with NielsenIQ.
A possibly more unlikely source, Qmarkets (an innovation software builder), published an April 2025 article on “Why innovation is the key to business resilience in a recession.” (Thankfully, a recession has not come to pass, at least not yet, but at that point in the year, it was definitely feared and even projected.) The article recommended five strategies for innovation:
- Continuous improvement: Optimize what you already have.
- Balance austerity with creativity.
- Unlock employee ideas and boost morale.
- Intensify your impact: Keep innovation consumer centric.
- Scout the right opportunities, internally and externally.
(Shout out to another colleague, Lindsay Beaton, for including these tips in a forthcoming article in the January 2026 issue of Petfood Industry magazine.)
Let the consumer lead you
Closer to home — as in, the pet food market — a longtime industry expert, Laura Moran, shared themes and insights gleaned from interacting with CEOs of all sizes of pet food companies in 2025 through her consultancy, PetSpark. One of the most pertinent themes is that cost and pricing pressures are shaping all types of business decisions, including “formulation choices and portfolio decisions,” Moran wrote on LinkedIn. Yet, innovation is being slowed by “misalignment,” not because of lack of new ideas.
“Teams are not short on creativity. They are short on clarity,” she continued. “Roadmaps, priorities and consistent decision frameworks matter more than ever to keep innovation moving. When alignment breaks down, even great concepts stall.”
That, and consumer-led thinking and design are more crucial than ever looking ahead to 2026 — “non-negotiable,” as Moran put it. Maybe the companies that view the current economic climate as the best time to spur innovation simply have laser-focused insight into what their consumers want and need, and how their pet food products can meet those demands.
