New forum gives growers and manufacturers a common goal

Get to know your end user quickly, is the message for cereal producers and processors from the Home Grown Cereal Authority (HGCA). Those that don't will see themselves "set aside" once Common Agricultural Policy (CAP) reform and other market changes start to kick in.

It was the message delivered at an HGCA seminar on cereal processing last month, at which a new Cereal Industry Forum (CIF) was launched. Chaired by professor Christopher Ritson, HGCA deputy chairman and professor of agricultural marketing at Newcastle University, the CIF will operate in a similar way to the Red Meat Industry Forum. It is funded by the HGCA, the Food Chain Centre, the Department of Trade and Industry and Department for Environment, Farming and Rural Affairs.

The CIF aims to help improve the competitiveness of the UK cereals industry as a whole. It plans to offer help with value chain analysis -- specifying what does and does not add value -- as well as advising growers and processors on reducing costs and improving the services they offer their customers.

Cereal producers face some of the biggest challenges from CAP reform. But they are not alone. Reform will also affect cereal processors -- especially if UK growers move out of cereals production in favour of more lucrative ways of using their land.

Alistair Dicke, HGCA director of crop marketing, said the food industry could expect more crop price and yield volatility caused by CAP reform and unpredictable weather patterns resulting from global warming. The recent entry of the accession countries into the European Union would also put pressure on crop prices, he added.

Dicke advised manufacturers to adopt strategies to manage this volatility.

One way, he suggested, was through partnerships between cereal producers and processors to ensure production of the the added-value products now required. In particular, two of the main drivers were consumer demands for convenience and health benefits in the foods they purchase, he said.

Professor David Hughes of Imperial College London said the trend for healthier eating was already having an impact, and he cited the launch of products such as Quaker's OatSo Simple and Kellogg's prebiotic cereal Muddles.

Hughes said more products with health claims were likely to be introduced in the future. He pointed to new studies by Danish researchers showing that rye bread might help to prevent breast cancer. He also mentioned the use of omega-3 rich grain, and multi-seed blends in low glycaemic index foods.

But Hughes warned that the cereals chain needed to spend far more on innovation. Research spending by the food industry is too low at just 1.8% of turnover, he claimed, compared with 14% in the pharmaceuticals sector.