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Health foods instead of price battle

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BERLIN. The situation in the German food industry is growing acute. A dozen times sounded down the retail sales last year: prices. A dozen times jubilant consumers – the food producers, but groaned at every discount promotion. "The scrapping is nothing against the stimulus package, the food industry has made available to consumers," said the chairman of the Federal Association of German Food Industry (BVE), Juergen Abraham, in Berlin on Wednesday at the opening press conference to the 75th Green Week. So manufacturers are now trying to save on their product margins.

At the expense of industrial consumers had been relieved at six billion, Abraham – and the sector turnover was broken into 2009 as never before: he fell from the previous year by around four percent to 149.8 billion euros. Abraham asked why, as President farmer Gerd Sonnleitner, the "waste of food and make the cut-throat price competition" conclusion.

But this is easier said than done. Thus, while 70 percent expect the companies that deal in Germany about 535 000 people, with rising raw material and energy costs. But only 15 percent believe, according to GNI, it can pass on the wholesale and retail trade. Forcing the halt in supplies to the trade by raising the price to be equally futile: The bands in the industry continue to run that is.

Nevertheless, in order to be profitable, the companies have therefore increased food with added value, known as functional foods. The advantage is settled, for the new hybrid products, from cosmetics, food and pharmacy pill that can charge higher prices. Whether they also provide additional benefit to the consumer, however, is often controversial.

Between pharmacy and quackery

"Functional foods are moving in the tension of Pharmacy and quackery," says Klaus Raettig, a partner at the consulting firm Alix Partners. Thus, probiotic yoghurts are needed to prevent colds, bringing the intestinal probiotic dairy going. An ACE vitamin drink supposedly helps fight cancer. In countries such as Japan and the U.S. is already "brain food" offered for a better thought processes and "Beauty Food" for the beauty. Europeans now spend more than three billion euros for this burgeoning genre, Germany is the largest market.

Some experts criticize the trend sharply. "If you’re sick, you should better go to the pharmacy than in the supermarket," complains about Martin Rucker of Food Watch. No man need functional foods to eat healthily.

So far, the only common ground is salutary effect on the margins of producers: The Becel pro-activ margarine by UnileverWhich is to lower cholesterol, which costs three to twelve times as much as conventional margarine. Even normal DanoneYogurt is only half as expensive as the jazzed Activia yogurt from the same house.

Hardly surprising then that the food industry invested heavily in research. Nestle for example, plans to explore jointly with the ETH Lausanne, the "relationship between diet and brain." Therefore, the company pays the scientists 25 million francs over a period of five years and has funded two chairs. An investment that promises big profits: According to a study by Harvard Business School, Nestlé was able to include the sales of products that are functional elements, alone between 2004 and 2007 increased annually by more than 23 percent. The usual food segment increased by only 6.2 percent. Resistance demonstrated in the functional food crisis in 2009. While Nestlé’s total food and beverage revenue last year grew by 0.7 percent, improved the sales of functional foods at four percent.

Also in the world’s largest yogurt producers Danone try 500 food technicians, biologists and chemists in the group’s own research center to create dairy products, to improve the well-being. Alone with his blockbuster caused Actimel Danone modified for an estimated one billion in sales every year – but also for the disapproval of the food watchdogs in Brussels.

EU takes action against baseless promises

The EU takes action against statements that relate to health, but have come without clinical testing concluded. Sun had Danone in April last year to withdraw a request for Actimel. The sugared yogurt drink is, the advertisement suggests, activate the immune system. Humbug as judged by the European Food Safety Authority (EFSA). Even two claims for probiotic yogurt Activia had to separate the group.

Nevertheless, the business is going well – still. Even consumers are more skeptical: According to the Nuremberg Society for Consumer Research (CSF) decreased the rate of repeat customers in Germany of 83.2 percent in 2008 to three percent to 80.7 percent now. Alix-Partners-man Raettig says, "functional food yogurt and ACE drinks are booming, but it runs in other categories, it is not nearly so well." The experiments about to bring bread or noodles with special additives on the market, showed little success. Consumers attacked, preferring instead to organic food. Or the reduced products on the market shelf.