What new technological developments in other parts of the food industry or in other industries at the present time might cause changes in your companys technology

Fig. 2.5 Technological areas for innovation.

Changes in the structure of the food system are also an important source of ideas for innovation possibilities. There are often changes in the importance of the various parts - production, ingredient processors, food manufacturers, retailers, food service - and the pressure for innovation moves from one section to another. Recently there has been increased new product activity in the ingredients industry, which is being transmitted to both producers and food manufacturers. Both vertical and horizontal integration have occurred in the last 50 years, and caused major innovations. For example vertical integration in the chicken industry led to chicken as major meat, and to the development of many new products; horizontal integration led to many new products in the baking industry.

A change in one part of the food system leads to new products in other parts. In particular, innovations in the primary producing industries produce new ingredients, which then advance to new consumer products. Canola seed was developed with low erucic acid, and these seeds were used to produce oil with high polyunsaturated/low saturated fatty acids, and the oil was then used to develop oil-based consumer products which were more attractive nutritionally.

The food system changes slowly. During the last century changes were incremental with some major changes, and the radical changes were well spaced. This may be caused by:

• maturity of the industry - compared with the innovative industries such as electronics, it is more difficult to invent new products;

• consumers - many are cautious and suspicious in judging new foods; food consumers change slowly unless they recognise marked benefits in the new product, and new benefits are more difficult to design than in other industries, for example information technology;

• biological product development - it takes time to develop a new plant, a new animal, a new fish, and even a new safe process, and these are the basis of the radical changes. Because of the expense of these developments, they were mainly funded by governments in the past (Earle and Earle, 1997), which also led to slowness;

• marginal returns on new food products - compared with other industries, for example the pharmaceutical industry, the profits on new food products are small.

So it may be that this has been the most suitable innovation method - mostly incremental product changes, some major changes and a few radical changes. But with today' s high rate of technological change in other industries, there may be change in the rate of innovation in the future.

The knowledge and understanding of technology in the total food system is continuing to grow rapidly and, if this is recognised by the industry, it will impact on new products, new processes and new manufacturing systems but more important on the consumers' and society's attitudes and behaviour towards food. However, if acceptance by the consumers is to be widespread and willing, then they must see obvious overall benefits to themselves; this needs, among other things, full and clear information. A striking lesson in the difficulties that may arise is to be seen in the introduction of genetically engineered foods. The bundle of products and services that the food company calls an innovation is now in the eyes of the consumers an experience, which they hope is safe and enjoyable (Pine and Gilmore, 1998). The food industry has gone through:

Commodities ^ Products ^ Services ^ Experience

Innovation occurs today at all these levels in the various parts of the food system.

Think break

When searching the food system for innovations, some leading questions are:

What are the changes in the relative importance of the various sections in the

food system?

How is the capacity of the industry changing?

What are the changes in the ownership structure?

Are there predicted take-overs in the industry?

Are there predicted take-overs from outside? Hostile? Friendly?

Are there predicted investment changes?

Are there new companies entering the industry?

Who are the innovators in the industry?


Try to answer these questions.

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