Implications for food processors

Food processing is a costly enterprise. Research and development costs are very high, but profit margins are low compared with other sectors. The level of regulatory scrutiny currently imposed on new food products is high and unprecedented, increasing the cost of developing novel products. The development and costs of such regulatory requirements may have significant negative impacts on by-product management in food processing. This implies that only a few companies may decide on the management of byproducts. The corporate control of food processing in general is likely to generate considerable social concern. Despite all the promises, agenda setting in the food industry still seems focused on short-term goals. These relate to conventional, high-yield industries aiming at profit. Consumer concerns about corporate control are immediately related to issues of ownership and food-supply-chain control. Management of by-products is seen as economic investment that requires return. This will raise concerns about the accessibility, monitoring and desirability of the use of by-products in food products.

The use of by-products could be perceived by consumers as a technological solution for improved sustainability which will cause other problems. Some consumers may perceive that innovations in this area will contribute to a further industrialisation, economisation and mechanisation of agricultural production that is seen as undesirable. Thus the development of effective commercialisation strategies regarding novel, sustainably produced food products must focus on regaining consumer confidence in food production and food technology, as well as communicating effectively and involving consumers in the broader debate on sustainable food production, and how this might be achieved. The emphasis should be on understanding what consumers understand by sustainability, and how this might be introduced into product design. Consumers must not be regarded as passive recipients in the process of the introduction of new food products, but should be taken into partnerships as the potential sources of inspiration regarding new innovations. Several studies have demonstrated that there is a positive effect associated with consumer involvement in product development. This explains why producers of innovative food products who work closely with consumers have a larger innovation success rate (e.g. Von Hippel, 1976, 1988, 2001; Lundvall, 1988, 1992; Coombs et al, 2001; Hoogma and Schot, 2001). Adopting such a strategy may overcome consumer negativity linked to the application of food technologies to food production. Such consumer negativity may be problematic in the context of food-waste recycling, particularly if the resulting novel products are destined for human or animal consumption. Depending on its research agenda and achievements, the food industry may change its perspective on sustainability in society. Successful by-product management in the future is contingent on societal recognition of a clear relationship between the food industry and sustainable practices. Initially, this could be attempted on a case-by-case basis, the results of different cases being used to generate generic strategies for commercialisation of food by-products in the future. Unless consumers can agree that the benefits of by-products management are equivalent to sustainable, desirable and acceptable food production practices, consumers are unlikely to recognise and realise many of the potential benefits of byproducts management.

It is, of course, important that the food industry develops a 'code of conduct' regarding the socio-economic impact of sustainable production processes. Such a code may not just serve humanitarian, ethical, environmental and other 'non-competitive' goals, but may also serve an economic purpose. Quality and environmental policy are, for example, integrated parts of the ISO 14000 certification. Codes of conduct are likely to be particularly relevant when producers face a lack of trust from their stakeholders, when laws and regulations of the government are not specific regarding the issue at hand and when people from different cultures meet and interact. In the absence of an international government or shared norms and values, codes of conduct may offer a solution that is clear to all those involved in the issue at hand. Ingenbleek and Mol (2003) have noted that such codes are of particular interest as part of strategies where firms adopt codes of conduct on food safety and/or sustainability. If customers perceive these attributes as not being beneficial to themselves, but as beneficial to society more generally, they may not be willing to pay for the development and implementation of the strategy because of the resultant increased prices in the retail sector. Thus codes of conduct regarding sustainable production may reflect societal value rather than customer value, but should not be associated with increased prices relative to similar products not produced in a sustainable way.

Consumer interests in food processing waste management 33 2.4 Future trends

Overall, there seems to be a place and a need for substantial research into the mechanisms of agenda setting in the food processing industry, the extent of corporate control and the diversity of society's evaluation of such issues. Policy makers and researchers seem aware of the need to include society and the need to deserve a 'license to produce' and a 'license to sell', rather than to exclude society and go on regardless. How this awareness can be incorporated into day-to-day management decisions is as yet unclear and requires more analyses and possibly new approaches. However, it is clear that consumer acceptance of novel foods produced using food byproducts is contingent on understanding consumer concerns and preferences relating to both food products themselves, and the processes by which they have been produced.

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