Executive summary by Copenhagen Capacity

Foods, ingredients and related technologies Executive Summary August 2014

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Copenhagen Capacity · Nørregade 7B · DK-1165 Copenhagen K t +45 33 22 02 22 · www.copcap.com · info@copcap.com

Executive Summary The Copenhagen region is home to a concentration of world-class producers of foods and beverages, related technologies, equipment, products and ingredients. Along with industry organisations and authorities, they make up the third largest food cluster in Europe measured on exports and innovation, and the second largest measured on employment. This study maps central parts of the food cluster in Copenhagen with the purpose of identifying areas where targeted supportive initiatives can help attract and retain international companies, talent and foreign investment to the region. The findings of the study are presented in a report that sums up information drawn from 48 in-depth interviews with representatives of public authorities, universities, organisations and companies, and a survey of collaboration, development, markets and growth ambitions among 100 companies in the food industrial complex in the Copenhagen region. In the report, study results are complemented by supportive data from Statistics Denmark. The study was conducted in 2014 by Copenhagen Capacity as part of the proactive investment promotion project “SPI”, involving 15 municipalities in the Copenhagen region.

Findings of the study Denmark is an agricultural nation and home to some of the world’s largest food and beverage companies. Over the past decade, Copenhagen has become a world-leading gastronomic destination, where restaurants such as noma showcase Nordic food quality and culinary innovation and draw global attention to the premium quality of Danish agricultural produce and food products and the inventiveness of Danish food manufacturers. Producers of foods and beverages in the Copenhagen region are extremely innovative. 80% of them expect to launch new products within the next three years, and 82% have chosen quality as their competitive strategy. This underlines the business potential that small entrepreneurial local producers as well as giant manufacturers of conventional foods, beverages and convenience foods see in premium brands today. The continuous strive for higher food quality and efficient production is a driver of innovation in companies supplying complementary products to the food and beverage industry. As a consequence strong and world-leading complementary industries have developed in the Copenhagen region in areas such as food technologies, process equipment and ingredients. These complementary industries are particularly interesting for international companies and investors seeking strong public a well as private research partners, specialist competencies, advanced know-how and, not least, demanding customers that stimulate innovation. Over the years this has caused several international companies to acquire Danish producers of technology, equipment and ingredients for the food industry. As demand for food continues to increase with population and economic growth, so will demand for technologies to optimise food production processes and ingredients to promote health and ensure longer shelf life and food safety. The ingredients business is born glo-

Foods, ingredients and related technologies © Copenhagen Capacity

bal and contributes to attracting international resources, competencies and know-how to the Copenhagen region. Today Copenhagen is home to several global market leaders in the food ingredients business. Their product portfolios include enzymes, cultures, natural sweeteners, natural food colouring and vitamins. Food and agriculture are key pillars of the Danish economy, which has provided a natural basis for long-standing government-industry-academia collaboration. At the Danish Technical University (DTU) and the University of Copenhagen, thousands of people work on food-related subjects and collaborate with public authorities and industry in a multitude of formal and informal constellations. The value of cross-sector collaboration is reflected in the competitiveness of the food and related industries in the region, the high Danish standards of food safety and hygiene, and the extensive knowledge and competence building at universities.

Areas for supportive initiatives Many engineers and skilled labourers are approaching pension age. At the same time the food industrial complex is beginning to experience competition for university graduates from the pharmaceutical industry, and a shortage of Ph.Ds. particularly for the ingredients industry. These challenges can be met through proactive collaboration between companies and universities to provide attractive educational and career opportunities. Danish restrictions on health claims are strict compared to other countries, and Danish authorities are strict in their enforcement of regulations on the food industry. While the highly efficient and reliable Danish food and veterinary controls have contributed significantly to the success of exporting food and technology providers, some of the smaller companies call for more information in connection with inspections and controls.

Foods, ingredients and related technologies ÂŠ Copenhagen Capacity

Value propositions to international companies and investors • An exceptionally strong and innovative food cluster. In Copenhagen a concentration of food, beverage and related technology and ingredients producers, internationally recognised food science research institutions and university faculties, and health and veterinary authorities make up an exceptionally strong and innovative knowledge and competence cluster. • World-leading food and beverage companies drive innovation and development in the Danish food cluster, which is among the largest and most innovative in Europe. • Extensive cross-sector collaboration is a unique and historical strength of the food industrial complex in Copenhagen. Long-term collaborations contribute to the competitiveness of the food and related complementary industries in the region. • Several large Danish and foreign-owned food, ingredients and technology companies have their headquarters and/or innovation and development centres in the region.

• Dynamic technology producers make up their own strong cluster in the Copenhagen region. Close collaboration with customers contributes to the leading position they hold in their fields of expertise. • Ingredients producers thrive on the synergies in the food industrial complex in the Copenhagen region. They are born global and have build their growth strategies on increasing wealth in BRIC and Next Eleven countries. • Strict food and veterinary controls and close cooperation between industry and food safety authorities have ensured the success of Danish-based food export companies, technology and ingredients providers alike. • Many test, demonstration and application centres make the region an ideal location for developing new products and technologies for the food and beverage industries. • Acquisitions of complementary firms have strengthened the position of several companies in the food industrial complex in the region.