The Sugar Dynamic: Innovation is key for the food supply chain
19th January 2016 | Samir Dani
In this article, Samir Dani discusses why innovation is a key driver in the food industry drawing insight from the convenience food market.
As diabetes and obesity are on the rise, the great debate to nail the causes is underway. Excessive sugar intake by humans is being recognized as one of the greatest health challenges in the developed world. The cause of this is attributed to the easy availability of processed food, ready to eat food, confectionary and sugary drinks. Hence, this creates a tussle between the medical sector, governments and the food industry. A recent drive by the UK government to curb sugar consumption has sparked off a drive to access healthier or low sugar varieties of food and drink by consumers, and thus the drive to reduce sugar in their products by food manufacturers.
However, this is not a new paradigm for the food industry. Techniques for large scale food processing and storage was initiated in the 19th century and then developed further as a food retail business model in the 20th century. The rise of consumer preference for ready to eat convenience foods created the need for considering a way to increase the shelf life. This led to the development of trans-fats (hydrogenated fats) that increased the shelf life of the product and reduced costs of production. Until the 1980s, use of trans-fats was a norm in ready to eat convenience foods and was sometimes also a consumer lifestyle choice. However, since the 1980s, there has been a push to reduce the trans-fats in food as the link between health issues (heart) and consumption of trans-fats was established. Reduction of fat in food, and especially trans-fats, has been the focus of the food processing industry. Since the 1980s, we have seen a gradual reduction of trans-fats by major food manufacturers and brands in their food. However, there has been a rapid increase in the availability of ‘low fat’ or ‘reduced fat food products’. Consumers were interested in low fat food products (and excessive advertising helped to funnel this interest); however they were unhappy with the taste. This led to food manufacturers using either increased salt or sugar in their products. In the last decade, the food industry has had to deal with reducing salt in the food, and now recently the demand is to reduce sugar.
Why is this relevant from a food supply chain aspect? The food industry relies on the food supply chain to fulfil consumer and other stakeholder expectations. Hence, when there is a requirement to change the products it is the supply chain that will help to find the techniques, process or for that matter substitute ingredients for this change. This will require supply chain capability building with the required level of supply chain collaboration and integration. Reduction of fat, salt or sugar in the food product is not only about the recipe (which may be true in a bespoke food product environment such as a restaurant), but about the large scale production, logistics and storage and accessibility of the food product for human consumption. This requires food companies and supply chains to innovate. This can be done in two formats:
* Incremental innovation: small change in the product (and changes in the process to create the product)
* Radical innovation: creating a completely new type of product
Food industry innovations are often aimed at developing important replacement products, following a change in nutritional requirements (as seen above), or following food additive regulations. These innovations can either lead to completely new or improved existing consumer products and services. Innovations may occur throughout the food chain and a possible classification of the food innovations is the following:
• New food ingredients and materials,
• Innovations in fresh foods,
• New food process techniques,
• Innovations in food quality,
• New packaging methods, and
• New distribution or retailing methods.
Some of the innovations can be found under fast-cooking, or “instant”, foods, such as quick-cooking rice, canned soups, packaged bake mixes, and canned and frozen vegetables. Due to the advent of online grocery buying mechanisms, food supply chains have had to rethink processing, packaging, storage and delivery of food products. It is important for food retailers and supermarkets to understand demand and inventory requirements to manage new retail models. The advent of supermarket loyalty cards helps the food supply chain to understand buying patterns and forecast demand to manage food inventories and thus reduce food waste.