Ref. Ares(2019)5332022 - 21/08/2019
Table of Contents
0. AGENDA OF MEETING / PROGRAMME OF EVENT
3
KEY MESSAGES
4
1. STEERING BRIEF
6
1.1 Scene setter
6
1.2 Objectives
7
1.3 Line to take
7
2. SPEAKING POINTS
8
3. DEFENSIVE POINTS
13
4. CURRICULUM VITAE
14
5. BACKGROUND INFORMATION
17
5.1 Food2030
17
5.2 Food and nutrition research within Horizon 2020, Societal Challenge 2
18
5.3 European Technology Platform ‘Food for Life’
19
5.4 Pepsico
20
2/21
0. AGENDA OF MEETING / PROGRAMME OF EVENT
1.
Introduction to Pepsico, by
,
Pepsico
2.
Introduction to priorities for R&I, and to programming and policy work for food
and nutrition security, including the FOOD2030 initiative and conference, by
Commissioner Carlos Moedas
3.
Discussion
3/21
KEY MESSAGES
• It is clear that the European food & drink sector does not invest enough in
research and innovation, compared to its competitors, despite huge
challenges and great potential for growth and jobs, and that the sector is
late at adapting a more open, collaborative innovation model, based on a
food system approach.
• You are convinced that there are business opportunities ahead in, for
example, personalised nutrition, alternative protein foods, reformulated
foods, new production and supply chains models, and digitalisation.
• You are interested to hear
long term vision for food and
nutrition, and on the extent of the changes ahead.
• On October 13th 2016 you will launch a new initiative called FOOD2030
at a high level conference to boost research, innovation and investment to
future-proof nutrition and food systems.
• You would be delighted if
could deliver a key note speech at
the FOOD2030 conference to share her long term vision on open
innovation and investment in food & nutrition.
• You think that there may be an opportunity for a public-private
collaboration with the European Commission on research and innovation
for food and nutrition.
• You are grateful for the scientific work that is being carried out by the
ETP ‘Food for Life’, in which Pepsico plays an important role, and which
includes a proposal for a future public private collaboration.
• You stress that proposals for public private collaboration need to be
inclusive and transparent, backed by a clear commitment at CEO-level,
and based on wide industrial, societal and political support.
4/21
KEY FIGURES (*)
FP7
Horizon 2020
Total number of participations
0
0
Total number of signed grant
0
0
agreements
ERC – Number of grantees
0
0
Marie Sklodowska-Curie –
0
0
Number of grantees
EU total financial contribution to
€ 0
€ 0
participation
* According to CORDA, Pepsico is not participating in FP7/ H2020.
5/21
1.2 Objectives
This meeting is a courtesy meeting aimed at maintaining good relations, but also an important
opportunity to achieve the following objectives:
•
Hear about the transformation that the food and drink sector is going through, and
the opportunities that arise from that;
•
Hear about Pepsico's 'Performance with Purpose', PepsiCo’s promise to do what’s
right for the business by doing what’s right for people and the planet;
•
Agree that there is a need to boost investment and innovation in Europe's food
value chains, in an open, responsible and inclusive way;
•
Inform
of your FOOD2030-initiative, which will be launched on 13
October 2016, and invite her to deliver a key note speech on open innovation and
investment;
•
Inform
about the proposal for a public-private collaboration on
Research & Innovation for food and nutrition, which is now being developed by
the ETP ‘Food for Life’. Thank her for Pepsico’s active participation in this work.
1.3 Line to take
•
To state that there is evidence that the European food and drink industry does not
invest enough in research and innovation, compared to for example US and Japan,
despite the enormous health and sustainability challenges the industry is facing,
despite the opportunities that exist such as personalised nutrition, and despite its
potentially very positive impact on growth and jobs;
•
To state that the food industry is slow to adapt a more open, user-centred and
collaborative model of innovation, based on a long term vision for food and
nutrition;
•
To explain that you will launch the FOOD2030-initiative at a high level
conference on 13 October 2016, to better structure, connect, and scale-up
European Research and Innovation for Food and Nutrition Security; this initiative
will act as a framework for collaboration and alignment between all actors
including private companies;
•
To invite
to deliver a key note speech on the FOOD2030 conference
of 13 October 2016 on open innovation and investment in the European food
industry;
•
To share your belief that a future long-term public-private collaboration on
research and innovation for food and nutrition will benefit society and drive
innovation, investment, growth and jobs ;
•
To show your appreciation for the scientific work carried out by the ETP ‘Food for
Life’, in which Pepsico (in particular
) plays an important
role, and which includes a proposal for a future public private collaboration;
•
To encourage
to continue Pepsico’s efforts to drive forward this
proposal for a future public private collaboration, and to call on other food and
drink
to support and commit to this proposal for a long-term collaboration;
•
To state that the role of the European Commission in any public-private
collaboration on research and innovation in food and nutrition should go beyond
funding. Clarify that regulatory burdens to innovation are already being discussed
with the industry as a whole within DG RTD's the InnovREFIT exercise.
•
To refrain from commenting on the state-of-play of the ongoing call for the KIC
Food4Future, in which Pepsico is participating.
7/21
2. SPEAKING POINTS
[Your introduction comes after
introduction. Each introduction is
intended to take +/- 5 minutes
introduction is an opportunity to question her about the long term
changes she sees for the food and drink sector and about Pepsico's
'Performance for Purpose' programme.]
Introduction to priorities for R&I, and to programming and policy work
for food and nutrition security, including your FOOD2030 initiative and
conference
-
As Commissioner for Research and Innovation, I want to make sure
that our research funding programmes, notably Horizon 2020, and R&I
policies contribute substantially to the Commission's jobs, growth and
investment package.
-
In addition to strengthening the international excellence of the EU's
research and science I want to encourage and enable private companies
or other actors to apply research to meet challenges faced by society,
to improve competitiveness, to create new markets and to generate
more high-quality jobs.
-
Funding though Horizon 2020 – EUR 80 billion between 2014-2020 -
is a key element but nevertheless part of a broader strategy, called
'Innovation Union', to create a more innovation-friendly environment.
-
In practice, this means addressing regulatory burdens, weaknesses in
public education and innovation systems, limited availability of
finance, fragmented efforts among member countries and regions,
patenting, and so on. And revolutionising the way the public and
private sectors work together, notably through partnerships on
innovation.
8/21
-
In view of the important challenges to food and nutrition security, I
have identified ‘food’ as one of the four priority sectors of my
mandate, along with ‘water’, ‘energy’ and ‘health’.
-
In practice this means that my services are working on an initiative to
substantially improve the impact of R&I investments on food and
nutrition security. It is called the Food2030 initiative.
-
The vision of the FOOD 2030 initiative entails a refocussing and
reframing of the research and innovation ambition for EU Food and
Nutrition Security (FNS) systems, which link land and sea, and targets
sustainable, affordable and healthy food for all.
-
By integrating solutions and investment opportunities covering such
huge economic areas and disciplines we aim to better coordinate,
scale-up, structure and connect FNS R&I through smart investment
strategies, and through exploiting the potential of the digital and
circular economies.
-
I will launch this initiative on a high level conference on 13 October
2016. Myself and Commissioner Hogan will speak at that conference.
from Nestlé will also be there to deliver a key note
speech.
-
The FOOD2030 initiative seeks to involve all actors involved in
research and innovation for food and nutrition. This also means that I
am looking at food and drink companies - big and small – to play an
important role in this initiative.
-
Today's situation is unsatisfactory. According to data from
FoodDrinkEurope, private investment in R&D as a percentage of
output equalled 0.27% in 2012. The US figure is roughly double as
high, while Japan almost reaches three times that amount (source:
European federation of food & drink industry).
9/21
-
Furthermore, the food industry is slow to adapt a more open, user-
centred and collaborative model of innovation, based on a long term
vision for food and nutrition.
-
All this suggest to me that by underinvesting in R&D our food and
drink sector - the largest manufacturing sector in Europe – misses out
on new business opportunities such as digitalisation or more
personalised nutrition, and therefore on growth and jobs.
-
I am also convinced that through research and innovation the sector
can significantly improve its impact on dealing with societal
challenges such as obesity or lack of food system resilience.
-
This is why I will launch my FOOD2030-initiative. I want it to target a
more open and collaborative approach to food and nutrition R&I, and
more alignment, based on a long term view for our future food systems
that will benefit citizens and businesses.
-
I would be delighted and honoured if you could join our high level
conference on 13 October 2016 in Brussels, for the launch of this
initiative. In particular I'd like to ask you to share your experience and
vision and deliver a key note speech on open innovation and future
investment for food and nutrition.
Public private collaboration
-
Personally, I believe that there is an opportunity for more public-
private collaboration on research and innovation in food and nutrition;
collaborations that have a long term view on food and nutrition
security and that are focussed on specific issues that require the public
and private sectors to work together.
10/21
-
Several actors, including the European Technology Platform 'Food for
Life', are generating proposals on what such a collaboration between
public and private should focus on, and what it would look like.
-
The proposal of the ETP 'Food for Life' is currently still being drafted
and needs to be made more concrete. But it can be a good basis for a
future public private collaboration, if it is backed by CEO-level
commitment and has wide societal and political support.
-
The draft proposal, as it stands today, is targeting, by 2030, (1) to
improve diets in terms of energy and nutrient intake, (2) to reducing
resources used for food production by 40%, (3) to generate 50% less
waste, and (4) to improve the sustainability of our protein supply.
Developing a deep understanding of what European consumers value
in foods and food-related behaviour, is the common enabler for all
targets.
-
I am grateful for Pepsico's efforts to bring this proposal forward, in
particular for the work being conducted by
,
Pepsico, and
.
-
I hope we can continue to count on your support and am interested to
hear from you if you – in due course- would be willing to help in
getting commitment for a public private collaboration from other
-
Finally, I want to emphasize that if we want such proposals to be
politically viable, these public private collaborations needs to be open
and accessible to all food companies, and have broad support from
stakeholders, society, Member States, and Parliament.
11/21
I will stop my introduction here. I'd be interested to hear your opinion on
FOOD2030 and on the need for more collaboration between the public and
private sectors.
[You could move straight into the discussion, following your introduction. You
have 20 minutes time for the discussion]
12/21
3. DEFENSIVE POINTS
Does the European Commission foresee to increase the Horizon 2020 budget for food and
nutrition?
It is true that the budget allocated to research and innovation for food and nutrition has
gradually declined between the 6th Framework Programme and Horizon 2020. The challenges
to future food and nutrition security require more public funding post-Horizon 2020.
However, it will be easier for us to convince the European taxpayer of this need if the
European food and drink industry can come forward with strategic vision and an ambitious
plan that can generate the necessary breakthroughs for society, and that can count on a wide
political and societal support.
13/21
5. BACKGROUND INFORMATION
5.1 Food2030
In the closing of the Milan EXPO 2015 last October, addressed by Commissioner Moedas and
Commissioners Mimica, Hogan, and Andriukatis, the EU signalled a willingness to build a
new Food Research and Innovation agenda by 2020 with our global research partners. He
explained the concept to bring greater coherency to the issue and stated that we would meet in
one years’ time around World Food Day 2016, to present progress.
A dedicated conference is thus being organized for this purpose, which Commissioner
Moedas will open together with Commissioner Hogan on 13th October in Brussels. The
from Nestlé,
, who Commissioner Moedas has recently met, has also agreed to
give an opening address. In parallel to the conference we are developing
the FOOD 2030
initiative which encapsulates a future-oriented vision for food production based on innovation
and investment opportunities. The initiative also seeks to provide the political visibility to
boost future FNS investments within the context of the next MFF, and deploy financial
instruments to increase R&I impact and exploitation.
The vision of the FOOD 2030 initiative entails a refocussing and reframing of the research
and innovation ambition for EU Food and Nutrition Security (FNS) systems, which link land
and sea, and targets sustainable, affordable and healthy food for all. By integrating solutions
and investment opportunities covering such huge economic areas and disciplines we aim to
better coordinate, scale-up, structure and connect
FNS
R&I
through
smart investment
strategies, and through exploiting the potential of the digital and circular economies.
The approach delivers on the five
Juncker drivers of circularity, climate change, industrial
competitiveness, EU as a global actor, and harnessing investment. The aim is to obtain greater
R&I impact on the following
key priorities:
1. Reducing hunger & malnutrition, addressing food safety and diet-related illnesses, and
helping citizens adopt sustainable diets and healthy lives – e.g. EJP One Health
2. Building a climate and global change-resilient primary production system – e.g.
PRIMA, EU/Africa HLPD
3. Implementing sustainability and circular economy principles across the whole food
system – e.g. Food Waste and the Circular Economy
4. Boosting market creating innovation and investment, while empowering communities
– e.g. FOOD cPPP, FOOD KIC
These priorities will be addressed through:
1. Investment, Regional, Private sector collaboration e.g. Smart Specialization, Public-
Private collaboration with the European food industry (Open Innovation)
2. Open access and data sharing; engagement, education & skills – e.g. the microbiome,
precision farming (Open Science)
3. ICT, Food systems science & transdisciplinarity e.g. smart personalised nutrition,
consumer behaviour, multi-actor approaches (Research Breakthroughs)
4. Global collaborations; MS R&I alignment and support e.g. International Bioeconomy
Forum, ASEAN aquaculture (Open to the world)
17/21
5.2 Food and nutrition research within Horizon 2020, Societal Challenge 2
Although not exclusively, most of the European food and nutrition research and innovation
budget can found under Horizon2020, in particular under Societal Challenge 2 (SC2). The
total budget for Societal Challenge 2 (2014-2020) amounts to EUR 3.7 billion. However, only
10% of that is assigned to food and nutrition research, the remainder is assigned to
agriculture, biobased industries, and blue growth.
Per year, approximately EUR 53 million
is allocated to food and nutrition research and innovation under Horizon 2020, which is
43% less than under the 6th Framework Programme, and 27% less than under the
7th Framework Programme. Activities under Societal Challenge ‘Food security, sustainable agriculture and forestry,
marine and maritime and inland water research and the bioeconomy’ aim at making the best
of our biological resources in a sustainable way. The objective is to contribute to securing
sufficient supplies of safe, healthy and high quality food and other bio-based products, by
developing productive, sustainable and resource-efficient primary production systems,
fostering related ecosystem services and the recovery of biological diversity, alongside
competitive and low carbon supply chains.
The Work Programme part offers opportunities in finding diverse and innovative solutions to
well-identified challenges in key EU policy priorities. Through generic or dedicated topics, a
broad multidisciplinary participation is welcomed in these efforts. The overarching principle
underlying the activities proposed is that applicants are invited to find solutions which will
make positive changes to our society, economy and environment, using resources more
efficiently. In this respect, solutions should be found that cut across research and
technological fields, with a strong innovation and market driven approach, in view of
increasing growth and job creation. The involvement of end users including farmers, fishers,
consumers, public authorities (including at local and regional levels) and society at large is
key to achieve this. In particular, topics involve a 'multi-actor approach' as foreseen in the
Horizon 2020 Regulation.
The 2014 - 2015 Work Programme for Societal Challenge 2 was composed of three calls
(closed now): 'Sustainable Food Security', 'Blue Growth', and 'Innovative, Sustainable and
Inclusive Bioeconomy'. In 2014, 27 projects were retained under 'Sustainable Food Security'
representing EUR 135 million.
The 2016-2017 Work Programme was published in the Autumn of 2015. Over the 2 years it
will allocate EUR 406 million in total to project focussed on delivering more resilient and
resource-efficient value chains, environment-smart and climate-smart primary production,
competitive food industry and healthy and safe food and diets. Among others this work
programme will be closer to market, with a third of the budget dedicated to SMEs,
demonstrations and financial instruments (compared to 1/7th in the 2014-2015 work
programme).
18/21
Developing a deep understanding of what European consumers value in foods and food-
related behaviour, is the
common enabler for all targets.
DG RTD/F is closely following the work of the renewed ETP ‘Food for Life’. We are
supportive of the ongoing work, but have a number of concerns:
• Any proposal of the ETP Food for Life has to be framed within a strategic vision on
the future of the sector. Today, we do not feel that the industry has such a vision.
Therefore it is difficult for the ETP to gain wide support within the industry for its
proposals. We are convinced that the
CEOs of food and drinks companies need to
be more involved, to set the strategic context for proposals, and to commit resources
to them, possibly within a public private collaboration;
• Due to resource constraints SMEs are underrepresented in the ETP ‘Food for Life’.
We will have to guard that the ETP takes SMEs sufficiently into account in their
proposals;
• Any proposals coming from the ETP Food for Life will ultimately need to get support
from across the food supply chain (farmers, retailers, etc.), and from other
stakeholders.
5.4 Pepsico
Pepsico is one of the biggest global food and beverage companies with a net revenue of
almost 67 billion USD (2014). The company was formed exactly 50 years ago, with the
merger of the Pepsi-Cola Company and Frito-Lay, Inc. Pepsico has since expanded into a
broader range of food and beverage brands (e.g. Tropicana, Quaker Oats, Gatorade). Today
food and beverages sales each make up approximately half of total net revenue. Pepsico has a
global reach, but half of its net revenue originates in the US. Europe accounts for 20%.
Pepsico classifies its brands and products in 3 categories: Fun For You (Pepsi soda, Lays
crisps, Doritos crisps), Better for You (Pepsi Next) and Good For You (Aquafina water,
Quaker oats, Tropicana juice).
Financial market analysts praise Pepsico's extensive distribution channels, successful
marketing and advertising, and it's proactive and progressive attitude. Low pricing (compared
to competitors) and a lower profit margin are sometimes indicates as weaknesses, but Pepsico
seems to address that with a change in operating model (see further). Pepsico is well placed to
capture future demand growth in savoury snacks, bottled water and healthy foods and drinks.
Possible threats include changing consumer tastes and attitudes (health), water scarcity, and
rising raw material costs.
Pepsico prides itself on the fact that it is adaptable (they have anticipated major shifts in the
consumer landscape and business environment) and performance driven (even in times of
change they have delivered strong long term financial results). Pepsico lists 4 main trends that
are of relevance to its performance:
1. The growth of the middle class
2. The evolution of the retail environment
3. The acceleration of the consumer focus on health and wellness (in 2014, 20% of net
revenue came from Pepsico's nutrition businesses; but the Fun for You portfolio finds
itself more often as the focal point of government regulations)
4. The war for talent
20/21
In order to cope with these trends and improve performance Pepsico transformed its operating
model from a highly decentralized and local one to a judicious blend of global leverage and
local execution, enabling them to deliver productivity yet retain agility. Pepsico's five bln
USD productivity plan that started in 2014 is made possible by this new operating model.
In 2014, Pepsico spent 718 million USD on R&D, up 30% versus 2012. This increase in R&D
spending is partly driven by the need to reshape the company’s product portfolio following
the consumers’ increased focus on health and wellness and growing societal concern about
the food-health relation. Innovation accounted for an impressive 9% of their net revenue in
2014.
It was recently decided that to PepsiCo’s R&D in the field of nutrition (the product range
“Better for you”, including Tropicana juices, Quaker grains, all dairy products and Gatorade)
will be led from Europe instead of the former US base, under the supervision of
21/21