Europe spends less on food R&D than competitors, says report
The European food and drink industry is falling behind its global competitors in terms of research and development (R&D), finds a new report. In 2004, the intensity of European R&D, expressed as expenditure in the food and drink industry as a percentage of industry output, was 0.24%, according to figures released by the Confederation of Food and Drink Industries of the EU (CIAA). This percentage is below the spending by the food and drink industries of its main competitors. In the US the equivalent figure is 0.35%, Australia is at 0.40%, and Japan leads the way at 1.21%. These figures are particularly relevant as the European market share of the global exports market has been shrinking from 24% in 1997 to 20% in 2005, the CIAA report states. In addition, the food and drink industry is the largest manufacturing sector in the EU, with 13.6% of all manufacturing and an annual turnover of €836 million. The sector employs some 3.8 million people. The CIAA found that innovation targets can be divided into five trend categories: pleasure, health, fitness, convenience and ethics. The amount of innovation undertaken by firms also tended to increase according to the size of the company. 'Nonetheless, a number of indicators demonstrate that most food companies, including small and medium-sized enterprises (SMEs), are genuine innovators and look continuously for opportunities to innovate,' said the CIAA. Two categories could be distinguished within companies involved in innovation. There are the 'big innovators', mainly large and medium-sized companies, which invest many resources in R&D and frequently introduce new products on the markets. The second category of companies, the 'small innovators', are mostly small enterprises that innovate without introducing radical changes. Product improvement is the top activity for SMEs. Innovations lead to a quick improvement in those characteristics of a food product immediately related to satisfaction in terms of taste and nutritional value. Currently, the European Commission and European food and drink stakeholders are debating how the food industry and consumer demand may evolve over the next 25 years so as to consider what implications this may have for food, agriculture, fisheries and biotechnology research.