Figure 5.3 Top 25 of innovative companies in the innovation database 30 25 20 15 10 5 0 Arla Foods Fonterra Danone Tetra Pak Müller BSA Dairy Crest Campina Nestlé Valio Emmi Yeo Valley Organic Danisco Robert Wiseman Chr Hansen Dairy Farmers of DSM Food Specialities Milk Link DK NZ FR S DE FR UK NL CH FIN CH UK DK UK DK UK NL UK USA USA USA- UK Yoplait Bravo! Foods Yoplait Dairy Crest Friesland Foods Lifeway Foods Wimm-Bill- Dann Wyke Farm NL USA RUS UK Recently Business Insights, a consultancy (Hall, 2007), asked industry executives to name innovative manufacturers in thedairyindustry. The result (see table 5.9) confirms our findings on Danone and Arla. Danone is very active in functional foods and recently introduced a so-called cosmeceutical ('Essensis'), a beauty product that claims to feed the skin from within. Nestlé scores high on this list as it is well known for its adaptation to local needs, especially in emerging markets. The survey by Business Insights also confirms Valio and Campina's innovative reputation. Table 5.9 Top 10 innovative dairy manufacturers according to industry executives Company % of respondents Danone 25 Nestlé 15 Arla 5 Dean Foods 5 Valio 4 Innocent 3 Kraft 3 Campina 2 F&N Dairies 2 Glambia 2 Source: Hall (2007). 43
44 5.10 Innovations and economic performance 5.10.1 Introduction This section focusses on the link between innovation and economic performance. To do this, three different databases are used: 1. our innovation database based on journal entries in Dairy Innovation and Food Navigator; 2. Eurostat Structural Business Statistics (Eurostat-SBS) oftheEU, providing national data comparable of those used in national accounts; 3. Amadeus database, providing economic data of individual companies. In this database most but not all companies are included. Small firms in particular are not obliged to provide data. Table 5.10 provides an overview ofthe coverage of Amadeus compared to Eurostat SBS for the total turnover. Only firms with the primary NACE code 155 are selected. Firms with another code but partly active are not included: examples are Nestlé and Unilever. An exception is made for the Netherlands: the two leading dairy companies are registered as a general Food Processor with NACE Code 150. This resulted in a coverage of above 100% since both companies have a small share in other food processing. The result of linking the innovation data to Amadeus reduces the number of innovations as well as firms. So the number in this section will differ from previous sections. We will present the results of 3 leading dairy countries: Germany (21% of total EU milk production), France (18%) and UK (11%), which together account total 50% of total production. We will start with the UK case because the number of innovations is highest. This enables a more extensive analysis. 5.10.2 Innovations and business performance: the UK Case The UK is the third raw milk producer in theEU, after Germany and France. In total 203 innovations are classified on 93 different dairy processors, suppliers to or buyers from the dairies. Figure 5.4 presents the top 10 dairy processors with the highest number of innovations. These 10 processors represent 46% of all innovations. In the top-5, Müller and Arla Foods are foreign investors. The top 10 does not include packaging or ingredients suppliers.