The European food sector is becoming less innovative, with the number of new innovations reaching consumers down by 6.5% since 2008, a new EC study has warned.
At the same time, food and drink innovation has become less ground-breaking over the past decade. In 2012, a third of innovations that came to market were related to product packaging, the study said; by contrast, almost all innovation in 2004 related to entirely new products or range extensions.
The report was commissioned following complaints from suppliers that retailers were placing onerous requirements on them that discouraged NPD.
It analysed changes in the EU retail food market over the past decade, and concluded the fall in innovation rates was the result of suppliers cutting back on R&D spend, and the rapidly expanding discount retailers stocking a narrower range of products.
But the report added despite fewer innovations coming to market, consumer choice across the EU had increased, both in terms of the number of stores consumers have access to and the products available.
The report found the opening of a new store led competing stores to offer greater choice and innovation. It said this backed up the EC’s efforts to abolish regulations concerning the opening of new stores.
The study also revealed market share of own-label products rose from 2004 to 2012 in each of the 14 countries it examined. In the UK, the increase was just 0.2% annually - the smallest rise of the 14.
“In the past five years, stakeholders have raised lots of questions on the functioning of our food supply chain. This study provides important insights and paves the way for future work in these areas,” said Joaquín Almunia, the EC’s vice president for competition policy.