Dive Brief:

• U.S. private sector spending on food and agricultural R&D exceeded public sector funding after spiking between 2003 and 2013, according to the U.S. Department of Agriculture's (USDA) Economic Research Service (ERS).
• Total private R&D for both food and agricultural inputs rose from the equivalent of $6 billion in 2003 to $11.8 billion in 2013. During that same time period, public R&D declined from $6 billion to about $4.5 billion, with the private sector's investments officially surpassing public funding in 2010.
• These statistics buck the historical trend of public sector funding tending to lead the investments in this area.

Dive Insight:

Since this time period included an economic recession, it may come as no surprise that funds once allocated to food and agriculture R&D declined. The private sector took it upon itself to fund innovations as the public sector's funding dried up.

This data may only account for up to 2013, but recent activity in the food and beverage industry suggests this trend has continued. The increase in private sector spending can be seen in the boom of R&D centers that many major companies have constructed over the past few years, from Nestle's frozen foods R&D center in Solon, OH, to Diamond Foods' snack innovation center in Salem, OR.

Companies are increasingly investing in innovation and R&D as they seek out new ways to differentiate their brands, create new disruptive products and product categories and establish a plan for better top-line growth. As more startups threaten major brands' market share, these investments have become necessary to keep up with changes and trends in the industry and consumers' evolving perceptions of food and health.