In exploring new paths to market, Food Service Companies are increasingly looking to external providers to acquire the scientific and technological expertise that will help them improve their growth strategy and advance the capabilities of their own innovation teams.

Importantly, the process of incorporating this new knowledge base is often framed in terms of open innovation methodologies. Originally coined by Henry Chesbrough, open innovation practices can speed up knowledge transfer across a company’s traditional boundaries, allowing a competitive advantage to be achieved through cooperative agreements and joint concept discovery and exploration.

Open innovation in the food and beverage industry

Food Service companies, interlinked in vast networks of suppliers and developers, have much to gain by utilising open innovation methods and adding to the contributions of their own Research & Development teams. The chief reason for this is the relatively low level of technological knowledge operating in this sector. Although, many SMEs are able to develop innovative concepts to an early stage of development, they often lack the resources or know-how to match the sophisticated commercialisation processes that large-scale development requires . This means that they often lose out on the commercial benefit. The tendency for advanced food technology to be undertaken only by a small number of large firms and the impediment that innovative and dynamic SMEs face when developing their innovative concepts, points to a need for change.

Open Innovation is the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively.” (Chesbrough, 2006) ...

Because open innovation relies upon the exchange of knowledge both from within the company and from without, traditional approaches to strategy which begin and end from within firm's boundaries are unable to take advantage of the vast networks of innovation activity now commonly shared. The first and perhaps most important step to reaping the benefit of open innovation is to examine the way knowledge is currently held and exchanged from within the company. This survey of a company's current innovation practices, will often clarify precisely where the need for innovation assistance is. Once this has been established, they can begin to identify both the challenges and opportunities that are available from the many information sharing networks.

1.) Open Innovation in the Food and Beverage Industry, ed by M Garcia Martinez, Kent Business School, Elsevier 2013