Small food firms lead the way on innovation

Smaller food firms are exploiting commercial opportunities more effectively than large businesses

Food producers that limit themselves to short-term innovation are missing out on the same commercial opportunities exploited by smaller firms and start-ups, the head of a research company has suggested.

The desire by larger food companies to tap into the innovation “space” currently filled by start-ups wasn’t currently being matched by investment, said Michael Zeitlyn, md at Oakland Innovation – the innovation consultancy arm of Leatherhead Food Research (LFR).

Zeitlyn was addressing LFR members at its innovation conference, held last month.

While accepting that market forces made it difficult for food companies to free up funds for longer-term innovation, Zeitlyn said food firms should be looking at more creative forms of innovation.

‘Strong bond in terms of innovation’

“Classically, companies have been very comfortable about forging one-to-one relationships with universities and lead consultancies and in particular, suppliers. And there’s a very strong bond in terms of innovation around these sectors,” he said.

“More and more, companies are looking to find common ground with those making competing products. However, the big opportunity and where a lot of the energy and attention is going to is through spin-outs and start-ups.”

According to Zeitlyn, there has been a proliferation in the number of “accelerators and incubators” – namely networking organisations that facilitate innovation in the marketplace. These, in turn, are gaining the attention of larger food producers.

‘An easy market’

“While the food industry isn’t so easy to succeed in, it is an easy market for smaller companies to enter – which makes it a very ripe area for larger companies to look towards,” he said.

“There are now lots of small networking companies working with investors and other parts of the supply chain, which are trying to take fledgling food businesses and make them bigger and more successful.”

Some of these incubator firms are using and mentoring top university talent, and are helping find funding for them to develop new successful businesses, Zeitlyn said. “It’s something more food companies could consider.”

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