Innovation is heart of sustainable industry

By Nicholas Robinson

- Last updated on GMT

Related tags: Supply chain, Food, Uk

Incles believes if food and drink firms commit to innovation there will be a bright future ahead for the sector
Incles believes if food and drink firms commit to innovation there will be a bright future ahead for the sector
Matthew Incles can see a promising future for the UK’s food and drink industry, despite the incessant bad press currently bombarding it.

Key points

The industry’s response to the negativity, which is driven in large part by health lobby groups and government pressure to reduce salt, sugar and fat in its products – not to mention the horsemeat scandal – is to innovate, says the Promar International senior consultant.

Incles has spent more than eight years working in the food sector and moved to Promar International, a food industry market analysis company, in March last year. He started as an analyst for the English Food and Farming Partnerships, which is now the European Food and Farming Partnerships. Then he moved to Leatherhead Food Research (LFR) as a market intelligence manager, where his interest in innovation really started. “LFR was a really good training ground because there was such a variety of disciplines going on nutritionists – a regulatory team, food scientists, product development teams, sensory scientists and consumer research teams,”​ he says.

LFR provided Incles with an insight into new product development (NPD), which has become his passion.

Innovation (Return to top)

Innovation is at the core of growing a sustainable food and drink industry, he says. “Developed markets, like the UK, need innovation to keep growing, otherwise they’re just going to stand still,​” he adds.

A major project Incles worked on at LFR was a combined commission from the Food and Drink Federation and the British Retail Consortium to find a range of innovative solutions to reducing salt in food. "A product called Soda-Lo really stood out,”​ he says. Soda-Lo was eventually bought by Tate and Lyle. It comprises a hollow salt crystal, which is about the same size as a regular salt crystal. “Because it retained a salt crystal shape and had the same overall surface area, it tricked the palate into thinking there was more salt,” ​he explains.

Reducing salt in foods is an example of innovation driven by external pressure – in this case from the government in the form of voluntary targets, says Incles. It also shows that the driver behind innovation isn’t always in the hands of the manufacturer.

Recent pressure around salt reduction is being driven by non-governmental organisations, such as the Consensus Action on Salt and Health, as well as targets from the government. “But it’s difficult for a lot of food manufacturers to reformulate their products and reduce salt at the drop of a hat,”​ he adds.

Salt also has a technical function in foods and this complex role needs to be remembered, he says. “I think in a lot of respects government targets cause a lot of pain for manufacturers, but on the bright side it does give the opportunity to innovate.​” Meanwhile, the industry’s innovative approach to dealing with the problems it faces shows its resilience, he adds.

Exporting the UK farm shop (Return to top)

While product innovation is a big part of Incles’s role, he is also working with other countries on other projects. One from China involves studying the UK farm shop supply chain. “This is the weirdest thing on my plate,​” he says.

“A Chinese investment company wants to come over to the UK to look at farm shops to understand more about how they operate and how they differ from other retail formats, with a view to setting up a chain in China.”

Incles is organising a tour of UK farm shops for a group of Chinese investors and says their interest comes from the emerging middle classes in China, who have more disposable cash, which they are spending on lifestyle-based products, instead of necessities.

Concern over food safety is another major driver for Chinese consumers, who increasingly want to know where their food comes from, explains Incles.

“The melamine scandal, where milk was contaminated with the deadly chemical, has undermined the country’s trust in its food chain, but there are other news headlines in China about more food scandals,​” he says.

Consumers in China, who can afford to improve their diets and pay for better food security, are doing so, adds Incles. In the main, the Chinese see the UK farm shop as having a short, open and transparent local supply chain and they want to emulate all of those attributes. “That’s the path China is on in terms of its food production.”

Insight into the workings of the UK’s supply chain also landed Incles work with The Netherlands government, which was interested in increasing the number of its small and medium-sized enterprises (SMEs) exporting to the UK. “The UK market is regarded as really attractive for a number of reasons,​” he says. “We’ve got a reasonably large population to sell to; it’s a sophisticated industry; and the retail sector here is one of the best in the world.”

Incles carried out a big strategic review of the UK market for the Dutch Embassy, looking at market trends and the supply chain structure. “It was about identifying opportunities for the Dutch SMEs to do business here and if they were already doing business, then where they could do more business here,”​ he says.

Globalised (Return to top)

Clearly imports into the UK might be considered by some to be a threat to domestic producers, says Incles. But the food industry is becoming increasingly globalised and many UK-based manufacturers are already foreign-owned, he adds. adds.

“I think what UK manufacturers should focus more on is the opportunity to export and not the need to keep out food imports. There’s a huge opportunity to export our products.”

Attributes like good traceability and high food quality also put the UK in a strong position to compete, he adds.

While working with the Dutch, Incles also gained an insight into the way their food industry works. As a result, he believes the UK food industry is missing a trick.

“In the Dutch sector, there’s a lot of collaboration between industry, academia and government,”​ he explains.

Where the UK government calls for food manufacturers to sign up to imposed voluntary salt, fat and sugar reduction schemes, the Dutch government works more closely with its food industry and scientists to reach mutually agreed levels, claims Incles.

The UK government needs to steer clear of setting down targets for the industry to achieve, which often results in manufacturers coming up against a brick wall, he says. “It’s a bit of a battle and that would be a poor situation to end up in, where it’s a case of legislation being implemented and then industry battling against it,”​ says Incles.

While food and drink manufacturers might be able to achieve some of the targets set for them to reduce salt, sugar and fat in foods through innovation, there is a growing concern that the impending supermarket price war could prevent them innovating in other ways, as they are forced to find ways of producing more for less, he says.

Reduce costs (Return to top)

Pressure to reduce the cost of production can only go so far, he adds. “I think it can be quite damaging and that constant pressure on pricing is not sustainable or good for the industry,”​ says Incles.

While traditionally it has been the pressure on manufacturers to become more competitive that has driven the UK industry on, there are fears that cost pressures and product re-engineering are stifling innovation and causing other problems, he says. “It can be good, but there are instances where it tips over into a negative place, which was the case with the horsemeat scandal.”

Since last year’s horsemeat scandal, though, Incles says there’s more understanding from buyers about how the supply chain works and the pressures processors and manufacturers face. “Now, someone who doesn’t understand their suppliers’ costs could lose that supplier,” ​he adds. “And I think buyers are working to understand more about their supply chains because of that.”

Despite constant pressure from their retail customers to reduce their costs, it is innovation and NPD that will separate tomorrow’s successful manufacturers from those that fail, says Incles. He believes they should be working towards the next big business opportunity, notably our ageing population, "where there’s not enough innovation going on in a market with so much potential”.

“Health and wellness is going to be as big in 10 years’ time as it is now, it’s not going away anytime soon, especially with the government and other bodies scrutinising our diets as much as they are,”​ he says.

Watch our exclusive video​ in which Incles discusses how food manufacturers should find the balance between new product development and minor innovations.

Related topics: People & Skills

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