By Pinar Celikkol, Duquesne University; James W. Dunn and Spiro E. Stefanou, Pennsylvania State University
The impact of agricultural policies is of major concern when addressing issues of growth, innovation, and consolidation in the food-manufacturing sector. Growth is one of the forces fueling the globalization of food manufacturing activities. Market- and policy-driven forces present a myriad of opportunities to influence growth and reorientation of patterns at the nexus where food manufacturing links the food system. The productivity and international competitiveness of the food-manufacturing sector must be evaluated in the context of governmental incentives, international standards, and the emerging supply- and value-chains.
The authors discuss current food-sector market characteristics and plausible concerns for the future. They conclude with a discussion of future trends and patterns within the food-sector. Consolidation in the food manufacturing sector is not necessarily coincident with increases in market power at consumers’ expense. Oftentimes, consolidation is focused regionally. In the advent of growing, more integrated marketing channels, food industry giants tend to find themselves going head-to head for market share. Regional brands still hold significant appeal to consumers and examples abound of the inability of emerging national brands to gain a leading position in all regional markets. The future patterns and trends arising from consolidation will likely depend on specific product categories or the marketing channels embedded in a region.
In the longer run, the role of public policies is manifested by growth in the food manufacturing system and the larger food system. The impact of commodity policies directed at primary commodity producers and the agents in the food system closest to them eventually radiate through the chain in the form of innovations that may not be undertaken. The impact of policies directed at value-added products such as those related to food safety and quality assurance radiate forward to consumers and are predicated on traceability standards that by definition radiate backward through the food system.
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