Brazil, Germany and the USA are the most striking countries in the list, with (very) high imports and also (high) exports. These countries' trade results are even more striking given the fact that the average import price is higher than the average export price. Australia and Poland have the same pattern, only the value of imports is much lower than the value of exports in both countries. From price relationships Italy has the best dairy trade balance from the value viewpoint: Italy imports low value dairy products and exports high value products. From the global viewpoint, in which theEU-15 dairy production is much more expensive than dairy production elsewhere, specialisation in products with the highest added value is therefore most effective for a country with a low selfsufficiency. The relationships between average import and export prices do not give any indication on profitability however. The annual growth rates show clearly that the developing countries, such as Southern America, are gaining world market share. The southern American countries in particular grew very strongly. This figure also makes clear that the increase in EU imports is higher than that of exports. This is easy to understand, as theEU CAP makes it impossible for countries to increase production in a situation of growing demand in the world market. 35
36 5 Innovation in thedairyindustry 5.1 Overview of innovations This chapter describes the innovativeness ofthe European countries. This analysis is done on the basis of Food Navigator, Dairy Innovation and the Innova database (see chapter 2 for details). Product-innovation is the main type of innovation (table 5.1) in thedairyindustry. In the functional foods market in particular, thedairyindustry is very active and the biggest group next to the fruit or vegetable beverages. The next popular type of innovation is marketing innovation. Organisational innovations rank third. However, the databases show some differences in types of innovations: Food Navigator reports less product innovations and has a higher level of marketing innovations. Food Navigator is more research oriented. For several cases, the contribution of research is mentioned whereas Dairy Innovation seldom gets mentioned. Process and sourcing new products are sparsely observed. The first 4 types of innovations in table 5.1 are divided into subtypes. Below we will discuss the difference ofthese four more in depth. The cases of both databases are merged and the differences will not be discussed separately. Batowska (2008) discusses some differences between the databases, where relevant. Table 5.1 Overview of types of innovations (in % of total) Type of innovation Dairy Innovation Food Navigator Total Product 44 34 42 Process 9 9 9 Marketing 26 35 28 Organisational 19 18 18 New source of materials/goods 2 5 3 Total 100 100 100 Source: Own findings.