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Summary of full report
by Dr Michael Heasman
January 2004
Rural industries can play a more proactive and innovative role in delivering these 'health' benefits, including added value produce, than they do at present. The premise of the functional foods/nutrition science revolution of the 1990s is based on observations of the health benefits of consuming more fruit, vegetables and 'whole' foods.
Fresh produce and products based on them are missing out on this newly created, nutrition science based, food supply opportunity. In other words they are failing to compete.
It is therefore recommended that Australia’s rural industries should develop a ‘vision’ and a nutrition strategy framework and facilitate business development from within this framework that combines environmental and health goals with consumer-led products, marketing, and innovation.
To explain how these recommendations were derived the report sets out a detailed overview of the role of health and nutrition in general food supply, introducing the concept of the Three Paradigm Model developed by Lang and Heasman1, and a strategic commentary on the current global market for functional foods and nutraceuticals arguing that a Functional Foods Counter-Revolution is leading to a period of industry maturation characterized more by the status quo, than a nutrition revolution.
Future scenarios for food and health
It is suggested the world of food is on the cusp of a far-reaching
transition resulting in a major restructuring of global food supply based
around what is argued are three competing scenarii or three paradigms for
food and health – the Three Paradigm Model. In short-hand these are - 'business
as usual' (what is termed The Productionist Paradigm), and two newer emerging
frameworks: 'mix and match' (The Life Sciences Integrated Paradigm) and
'fully engaged' (The Ecologically Integrated Paradigm). Each paradigm addresses
different approaches to food and health, how to produce food in the future,
how food supply should be regulated, local or global production. The three
paradigm model is set out to capture that there are now distinct choices
being made in food policy and food supply strategy with long-term implications
not being fully debated. The purpose of setting out the Three Paradigm
model is to provide a tool for analyzing food and health options integrating
the core drivers of: health, business, environmental impact, consumer experience
and policy management.
The state of the international market for functional foods
It is argued that functional foods and nutraceuticals markets are entering
a prolonged period of consolidation as part of a Functional Foods Counter-Revolution.
With all sorts of foods and beverages becoming 'functional' through adding
‘health enhancing’ ingredients the whole concept is in danger of becoming
viewed as a “commoditized” market. The result is that for many companies
new product development means relying on looking backwards to ‘case studies’,
often originating in the mid-1990s, to enter food and health markets with
“me-too” type products. The innovation and strategic challenge is now twofold,
not to look back, but to look ahead to what is genuinely new, either to
win at the consolidation game – stage a successful Counter-Revolution -
or to be the pioneers and work on the next big idea to leapfrog into the
future. The lessons from the international market for functional foods
are set out and the implications of the Functional Foods Counter Revolution.
Key insights from the consultation
A total of eight interviews were undertaken with Australian experts
with different backgrounds and experience of the food economy and functional
foods. The consultation serves as a pilot study and the main objective
was to test international developments in the context of Australian activity.
The interviews were not aimed to be inclusive of the majority of Australian
experts or to cover all professional areas that are relevant to functional
foods and nutrition. Information from the interviews was analyzed manually
and comments grouped into six main themes which arose from the examination
of the interview data, these were: ‘market constraints,’ ‘get close to
the market,’ ‘local versus global development’, ‘the image of Australian
food,’ ‘total diet approach,’ ‘future challenges.’ Details from the interviews
are presented in this section.
Conclusions
Australia’s rural industries should develop a nutrition strategy with
the objective of enabling them to compete more effectively in nutrition
markets and apply the successful lessons from the marketing of ‘functional
foods/nutrition products’ from the processed/packaged foods industry. The
strategic goal of rural industries would be to ‘leapfrog’ current market
activity with a new consumer-led nutrition vision integrating human and
environmental health.
1 Lang, T. and Heasman, M. (2004) Food
Wars: the Global Battle for Minds, Mouths and Markets, London: Earthscan
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