Halbe Vogel is board member and co-founder of IFFI, Ingredients for Food Innovators. The network celebrates its fifteenth anniversary this year. “Food prices have been at a low level for years. Food needs a revaluation, the planet has made up for it too long.”
(This article was originally published in Dutch in EVMI)
IFFI is a business network for innovators in the food ingredients industry. “With our network we want to bring people into contact with each other,” says Vogel. “It’s about sharing knowledge, learning from each other and inspiring each other. For example in sales, marketing, R&D, but also in production and supply chain. For this we organize business network and academy events touching on current and relevant topics. It is not about competition, but about growing better together”. In the industry, necessary challenges have to be faced.
Invention versus innovation
What does Halbe mean by innovation? “You have to make a distinction between invention and innovation. With an invention you come up with something new. But without the application it has no value and is of no use to you. The invention, for example, must be marketed and if value is attributed to it then it is innovation. We are a business network and value creation is essential to us when it comes to the development of new products, technologies, but also new production and marketing methods.”
He identifies four important areas of innovation within his industry “These are taste, convenience, health and sustainability. We used to spend about two hours a day cooking. Nowadays, the average is twenty minutes. Cooking has shifted from the consumer to the producer. When you buy something now, you often don’t want to eat it right away. That is a challenge. When cooked, food usually expires faster. In addition, cooking kills many nutrients. Over the last thirty years, people have paid more attention to healthy food. The four innovation areas are in chronological order, but that does not mean that you only have to take the last one into account. If you want to introduce an innovation to the market, you have to score in all four areas, even when not all four are equally important. We are willing to compromise on a number of fronts if it helps our planet. The vegetarian burgers are a good example of this. When they first hit the market they tasted a bit like cardboard. However, the consumer has allowed the industry the given time to improve taste. If that would not have been the case, the vegetarian burger would already have disappeared. ”
Producers are still given room to improve. Not all plant-based food that appears on the market is a tasty alternative. Some producers prefer to wait before they can meet the quality requirements. But that is not necessary. In this context, a good example is vegan cheese. The alternatives are getting better, but they aren’t there yet. “As long as the value of the product is considered high enough, people are prepared to accept it. It is important for the producer to improve quickly. If you manage to meet consumer expectations in all four areas, then you have a real winner.”
Pressure is increasing
A healthy planet with healthy people, that is what Vogel sees as the challenge of the present and the future. “You could say taste and convenience are qualifiers, planet and health are discriminators,” says Vogel. “It is very important to innovate in these two fields. The pressure to do so is increasing. From the Netherlands, but also from Europe. Not only are consumers making more and more demands, but so are politicians. As a result, there is less and less room for maneuver, while you do need room to experiment and to come up with new ideas”.
Investing in innovation
In the short term, there are also all kinds of other challenges that reduce the room for manoeuvring in the industry. “Think of the higher energy costs, but also the low availability of raw materials and personnel. We will have to deal with these issues in the short term, as they may affect our future in the long term. For example, in the field of energy – it is quite possible that prices will remain high, also dictated by politics. Staff shortages may also persist. Due to these kinds of challenges, companies are mainly concerned with survival in the short term. This leaves less room and money to innovate. The annual food industry monitor shows that a trend break may have occurred in 2020 and that from that moment onwards less investment has been made in innovation”.
Importance of start-ups
“For us as IFFI it is important to keep sight of both short and long-term effects. Bearing in mind that the consequences for this differ for large and small companies”. The extent to which they can respond to these challenges also differs, for example because of financial strength. “However, it is clear that the start-up is becoming increasingly important, especially when more established companies temporarily need to focus on tackling other challenges. Whether it’s a start-up that operates as part of an established company or a start-up that operates out of someone’s garage: we all need them. That’s why we organized the IFFI Startup Event for the first time last year. For established and start-up companies, to see how they can be of value to each other”.
According to Vogel, the industry is capable to contribute to a healthy planet and healthy people. “Farmers play a very important role in terms of a healthy planet. They are the guardians of the landscape; their way of farming has a major impact on nature and the environment. We then work with their raw materials, which we import from all over the world. Our ingredients are then processed into a final food product. Unilever, for example, sets all kinds of sustainability goals. Praiseworthy, but these goals then fall on our plate and those of the farmers. The real efforts and gains have to be achieved in the links before. However, producing in a more sustainable way costs money. The cost price goes up. The question is: who is going to pay for all that? For a long time we were used to selling products. However, this is shifting, we are going to sell a better world. But how are we going to price that?”.
The companies in the food ingredients industry have a large CO2 footprint, explains Vogel. “That has to do with the fact that we dry a lot of raw materials. We make powder from lots of raw materials: milk, potatoes, sugar beets, grain. Drying is a separation technology for refining ingredients from a raw material. But this technology costs a lot of energy. On the other hand, it also generates profit: instead of water only dry matter will be transported. In addition, it benefits the shelf life of the product. But perhaps we should approach it differently. The CO2 footprint of companies has to be reduced annually or the companies can choose to buy additional emission rights. Both is enforced legally, but it also drives innovation. We could dry ingredients to 50 percent instead of 95 percent dry matter; so opt for a slurry instead of a powder. Or choose a completely different separation technology instead of drying. The sustainability requirements force us not only to innovate in terms of raw materials, but also in the areas of production, logistics and the final product”.
The healthy person
The other challenge, the healthy person, is just as important. “We already spend a third of the national budget on health costs. It is important to make sick people better and to keep healthy people healthy. First, making sick people better, is something the pharmacy does well. They make pills and before they come on the market they have to prove that they work through scientific evidence. Second, keeping healthy people healthy, the food industry is good at. But they also have to hand over the same burden of proof. Scientific research has to be done before health claims can be put on the packaging. There is no money or time for. Consequences? It is not interesting for companies to innovate in this area. So how does the consumer know which food is healthy? To get the consumer involved in a healthy choice, for his entire diet, more is needed. To get this off the ground, all parties must work together: supplier, producer, retail, but also the various ministries”.
Another challenge for producers is clean label. “When you meet all four facets, this one is added. While the E of E-numbers stands for ‘Edible’ The safety of these substances has been proven by science. About twenty years ago people started to doubt this. Now people preferably ban E numbers in this area. We as an industry should have communicated better about this. However, it also offers opportunities. Consumers are again asking questions about the origin of their food, wanting to know how it is made. Before, food was an anonymous product. Today, this has changed and this revaluation of food in turn offers opportunities to the industry”.