Trends: Industry drives innovation
Trends

Industry drives innovation

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In 16% of the new launches, supporting muscle building was the added health value that lay in the innovation, such as here with dried meat, which is particularly high in protein but low in fat.
In 16% of the new launches, supporting muscle building was the added health value that lay in the innovation, such as here with dried meat, which is particularly high in protein but low in fat.

GERMANY, Munich. New developments in the food industry: on the pulse of the times and under critical observation.

What drives the German food industry to innovate? Which technological processes will play a role in food innovations in the coming years? How will these be financed and how do food producers assess the communication of innovations? Together, the DIL - Deutsches Institut für Lebensmitteltechnik (German Institute of Food Technologies) and the communications consultancy Engel & Zimmermann (E&Z) have investigated the innovation activities of German food manufacturers and summarized them in the 1st German Food Innovation Report.

The study shows: The German food industry need not fear for its innovative capacity. It is driving innovations forward - increasingly also taking sustainability aspects into account - and thus also offering solutions for the social challenges of this century.

Two basic types of innovations were examined in the Food Innovation Report: products and processes. In the area of products, a clear majority of 80% of participating companies said they had introduced a new product between 2017 and 2019. Whether and which health aspects played a role in the introduction of product innovations was also determined. The result: for more than a quarter of the innovations (27%), the health benefit was that the product helps with weight loss. In 16%, the added health value that lay in the innovation was support for muscle building. "In addition to the ongoing fitness trend, food manufacturers are thus addressing an issue that is of great relevance to society as a whole: obesity and the associated diabetes," sums up Dr. Volker Heinz, CEO of the DIL in Quakenbrück.

The 1st German Innovation Report Food
From June to September 2020, 91 respondents took part in the survey. The respondents were decision-makers in German companies that produce food (average sales: 379 mill. €).

Innovations contribute to environmental protection

Positive environmental effects of innovations can be felt in two ways: either by the consumer or by the manufacturing company. Almost half of the product innovations (48%) are characterized by a longer shelf life. "Food manufacturers are thus making an active and significant contribution to reducing food waste," says Dr. Heinz.

Half of the participating companies (53%) innovated in new processes in the past three years. In this area, environmental effects played the biggest role: for 79%, this was the reduction of CO2 in the company. This shows that the food industry is working on a highly relevant sociopolitical issue and fulfilling its responsibility for climate protection. Likewise, 79% named the reduction of energy consumption as a positive effect of their innovation. Reducing material and water consumption also plays a major role (71%).

However, manufacturers are also pursuing their own interests. For example, 80% said that the introduction of environmental innovations served to improve their reputation. 75% cited compliance with existing legal requirements as a reason, and 72% cited the expectation of future legal requirements. The fact that sustainability also has an economic component is reflected in the fact that 72% cited the rising cost of energy or other raw materials as a motivation to invest in environmental innovations.

Industry 4.0 is the top topic for process innovations

When asked specifically which process technologies will gain in importance in the future, the production of customized products with the help of cross-process IT measures was named most frequently by a wide margin (66%). In international and national competition, the food industry must optimize products and processes in ever shorter cycles and reduce costs. Digitization and intelligent networking of horizontal and vertical value creation processes - Industry 4.0 for short - have the potential to further improve transparency, planning reliability, quality and customer orientation in food production.

Companies are wasting potential

85% of the innovations considered in the Food Innovation Report were developed in-house, 41% together with another company. In only 14% of the cases did the manufacturers work together with research institutes. Heinz sees the fact that only three percent of the innovations were introduced by research institutions on their own as an indication that institutions such as the DIL are closely interlinked with industry in their development work. Research institutions can also help companies apply for funding for their innovations. The fact that many companies are still giving away potential here is shown by the fact that more than two-thirds of the companies stated that they had not received any funding for their innovation activities from public national or international institutions (69%).

Communicating innovations: challenging but important

Another large section of the report deals with the communication of innovations. A completely heterogeneous picture emerged when asked how challenging food manufacturers consider communication to be.

Almost two-thirds (62%) see it as (very) challenging to communicate the use of new technologies in manufacturing. This may be because such innovations do not play a role for the two most important target groups - retailers and consumers. The situation is different for innovations that reach the end consumer directly: More than two-thirds of respondents see it as predominantly easy to communicate improvements in packaging (66%) or a reduction in certain ingredients (70%). In contrast, sustainable (environmentally friendly) packaging (69 percent) and advances in animal welfare (54%) take top spots among the more easily communicated topics. "Regardless, communicating sustainability innovations remains challenging," says Frank Schroedter, board member and partner at Engel & Zimmermann in Gauting near Munich. "This is mainly due to the pitfall: those who position themselves and their products as sustainable must also be aware of the communicative risks that other areas of the company may entail. The danger of greenwashing also quickly resonates if the communication is not coherent."

Concern about critical consumer advocates

The fundamentally optimistic attitude toward communicating innovations is somewhat clouded when critical dissenting voices, such as those from consumer advocates or NGOs, come into play. It is somewhat surprising that the statements "Without flavor enhancers" and "Without additives," which are particularly frequently criticized, are predominantly considered to be uncritical to communicate. They are only surpassed by (organic or Fairtrade) labels and the statement "Vegan", which are seen as most uncritical.

Concern about critical consumer advocates is not the only obstacle that food manufacturers see to communication: They consider it at least as critical that their innovation does not generate interest among end consumers (51%) or that the innovation is difficult to communicate due to its technological complexity (48%). "The obstacles are manifold and show that communication must always be geared to all target groups," summarizes Frank Schroedter.

To conclude the communication part, DIL and E&Z wanted to know which communication measures food manufacturers choose to communicate their innovations. The most common answers were trade shows (64%), social media campaigns (63%), product-related press relations (57%) and classic advertisements (55%). "However, due to the Corona pandemic and the cancellation of almost all trade shows, the focus is likely to shift significantly in the coming months, with online PR gaining more importance," Schroedter said.

Download the complete 1st German Innovation Report Food 2020 here.

Source: afz - allgemeine fleischer zeitung 3/2021; Engel & Zimmermann; DIL
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