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Headlines > Market Trends

Food industry - consumers have more power

21-Sep-2001

Leaders of the soybean, sunflower, rapeseed and palm oil industry ended a three-day International Association of Seed Crushers congress, held September 17-20 in Sydney, Australia, on a mainly upbeat tone, with 2.7 per cent industry production growth a year forecast through to 2020.

 

 

 

However, according to conference speakers, growth would occur only if the industry was able to accommodate quirky consumer trends over food safety, especially in Europe.

 

 

 

Foot and mouth disease in Britain and Europe was just the latest input to public perceptions of food and farming, which were grouping together scientifically unrelated issues, Europe's top vegetable oils executive said.

 

 

 

Paul Conway, president of FEDIOL, the EU Crushers and Oil Processors Federation, also European vice-president for US agribusiness giant Cargill Inc, blamed a "scientifically illiterate and sensation-hungry media" for lumping unrelated issues together in the consumer mind.

 

 

 

"Reality still does play a part, even in Europe. But it's a mistake to try to explain everything according to science and reason," he said.

 

 

 

Hysteria in the United States over StarLink GM corn, which last year was found in Taco chips even though it had not been approved for human consumption, showed that genetically modified (GM) food concerns were not confined to Europe, he said.

 

 

 

"It represents the shift of power ... from farmers and the production end of the food chain to consumers and retailers," he said. Mr. Conway also added that GM foods were rejected by large numbers of European consumers but more accepted elsewhere, particularly in the United States.

 

 

 

Unilever Plc, the Anglo-Dutch consumer products group is well aware of the same consumer shift. The food industry was moving from supply-based push to consumer-demand pull, said Unilever's Jeroen Bordewijk, senior vice president of the group's supply chain program.

 

 

 

A rapid rise in the GM component of the US soybean crop had been accompanied by a sharp drop in exports, he said.

 

 

 

Approximately 70 per cent of the US soybean crop is now GM, up from less than five per cent in 1996. Over the same period the value of US soybean exports dropped to $US4bn a year from $US7.5bn in 1996.

 

 

 

"This is a clear signal of consumer power to the industry," he said. Consumers will not accept any more that everything we put on the market is okay."

 

 

 

Conway said Europe's food scares and consumer rejection of GM foods had been accompanied by an opposition to industrialisation of the food chain, mistrust of science, scientists, government and food production methods. "There is a strong perception that GMOs were forced onto an unsuspecting public with no thought to any consumer benefits," he said.

 

 

 

This had already produced an impact on trade flows. EU exports of soy oil had increased as domestic demand declined. European demand for conventional Brazilian beans and meals had soared.

 

 

 

Demand for guaranteed wheat-based syrup had risen at the expense of maize-based syrup, simply because no GM wheat is produced anywhere in the world.

 

 

 

European imported corn demand had switched from the United States to Argentina, which produced an EU-approved crop. The market had also established differential prices based on degrees of guarantees of identity preservation, he said.

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