HUB FOCUS: Thought for food
Innovation and Entrepreneurship in the Food Industry
By SIMON DALE, Director of the Food Technology Enterprise Hub
In the UK we spend an average of over £24 per day on food and drink per person. The food manufacturing industry is the largest single manufacturing sector in the UK with a turnover of £66 billion p.a. The industry employs approximately 500,000 people and buys two thirds of all UK agricultural produce.
In order to deliver high quality, varied, safe and nutritious food to the UK population, producers, processors, distributors and retailers have developed a sophisticated and complex food chain. However, despite the relative sophistication of the food chain in the UK, in a study by McKinsey’s which compared the UK food sector with the US and (West) Germany, the UK’s showing in innovation and technology transfer was weak.
Businesses need to develop and adopt the latest technology, network, and respond more effectively to market demand. However, entrepreneurs looking to start up new technology businesses are also faced with major obstacle. The reality is that 30 per cent will fail in their first year, and 60 per cent of the remainder will fail in their second year (DTI figures). But it’s not all bad news for food entrepreneurs.
A UNIQUE HELPING HAND
Sponsored by the South East England Development Agency (SEEDA), the Food Technology Enterprise Hub focuses on entrepreneurial individuals and companies, helping them to bring ideas to market quickly and profitably.
Key to the success of the Hub Network has been the realisation that, regardless of the type of company we are supporting, the issues they face are often similar. The majority of our clients are seeking either technical support via partner organisations, or investment to grow their businesses. The level of investment currently sought ranges from £30,000 to over £5 million. The Hub is able to help facilitate both needs via its large network of contacts both within and external to the Food Industry.
OPPORTUNITIES FOR INNOVATION
Most consumers demand fresh, safe, cheap food. They are not are currently not concerned primarily about where or how the food has been produced. However, there is some evidence to suggest that this might be changing. There is an increasing demand for niche, added value products e.g. organic, ethically-produced, or regional.
“Consumers are becoming increasingly aware of the relationship between food and health.”
There is a growing demand for information about food production and food constitution. According to government statistics, up to one third of deaths from cancer and heart disease, the UK’s biggest killers, could be prevented by better diets. There will be increasing pressure on government to increase legislation to reduce the health risks of ‘unhealthy’ food and encourage more balanced diets.
In addition to healthier eating, there are exciting new developments in the area of ‘functional food’. Certain foodstuffs, particularly fruit and vegetables, have health benefits over and above their inherent nutritional value. Functional food may reduce the risk of diseases which affect the heart, gut, bone and immune system. The study of active components in functional food is relatively new but it is likely that in the future they will feature prominently in diets: either identified in existing foodstuffs or as additives. There is a greater understanding of the relationship between genes, diet and health, and this will accelerate as a result of further discoveries around the human genome project.
This is an exciting and highly significant research area where food science, biotechnology and pharmacy merge, and an area ripe for the development of new technology-based businesses. The University of Reading, one of the Hub’s partners, is currently leading a multi-disciplinary research programme co-ordinating expertise on agriculture, animal and plant sciences, food policy, bioscience, food science and nutrition, pharmacy and consumer choice in investigating this area. The Hub is able to offer its members direct access to the academics leading the research into this field.
INNOVATING THROUGH THE SUPPLY CHAIN
There is some evidence that innovation is being pushed down the supply chain. Some large multinational food companies are focusing on their core activities and reducing their research and development activities. They are, therefore, increasingly reliant on smaller specialist companies for innovation, product development and support.
The Hub is helping to facilitate contact between SMEs and multinational producers and has already provided access for its members to some of the largest food producers. For example, introductions have been made for SMEs clients to the likes of Cadbury Schweppes, Masterfoods and Glaxo- SmithKline, opportunities which they would have been unable to facilitate by contacting the multinational directly. In addition to contacts with the manufacturers, the Hub is able to open doors at the highest levels within the multiple retailers and food service companies for its clients.
ABOUT THE FOOD TECHNOLOGY HUB
The Food Technology Hub is one of a network of 20 Enterprise Hubs across the South East, and is built around a team of commercial experts and partner organisations. In addition to its core team the Food Hub draws upon a wide range of specialists to help entrepreneurs and businesses realise their potential.
Our clients have access to a broad range of specialist equipment and facilities including some of the most extensive pilot plant facilities available in Europe, together with an unparalleled range of specialist business mentors and consultants, often sourced from the investment community or with comprehensive Food Industry experience.
HUB PARTNERS
The Hub’s partner organisations are Leatherhead Food International, Reading Scientific Services Ltd, The School of Food Biosciences at the University of Reading, Kent Business School at the University of Kent, East Malling Research and the Natural Resources Institute at the University of Greenwich.
Author: Enterprise Hub - Director Simon Dale
Created Date: 18-12-2007
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