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Bioscience at a Crossroads Access and Benefit Sharing in a Time of Scientific, Technological and Industry Change:
The Food and Beverage Sector
Bioscience at a Crossroads:
Access and Benefit Sharing in a Time of
Scientific, Technological and Industry Change:
The Food and Beverage Sector
About the Author and Acknowledgements:
Rachel Wynberg holds a Bio-economy Research Chair at the University of
Cape Town, South Africa where she is Associate Professor. She has worked on ABS issues for the past twenty years.
The Northern Territory Government, Australia, is thanked for their support of earlier research. The following people are gratefully acknowledged for their helpful comments on drafts of this document: Maria Julia Oliva, Katie Beckett, Hilary Green, Kathryn Garforth, and Olivier Rukundo. Research support from Jaci van Niekerk is gratefully acknowledged. We thank all those who agreed to be interviewed for this research.
Published by:
Secretariat of the Convention on Biological Diversity 2013
ISBN Print: 92-9225-495-2
Disclaimer:
The designations employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of the Secretariat of the Convention on Biological Diversity concerning the legal status of any country, territory, city or area of its authorities, or concerning the delimitation of its frontiers or boundaries. The views expressed in this publication are those of the authors and do not necessarily reflect those of the Convention on Biological Diversity. This publication may be produced for educational or non-profit purposes without special permission from copyright holders, provided acknowledgment of the source is made. The Secretariat would appreciate receiving a copy of any publications that uses this document as a source.
Front cover
Back cover
Centre: Baobab: PhytoTrade Africa Centre: Maca roots Right: Argan fruit Right: Agave plants All photos by Shutterstock unless otherwise indicated.
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Web (ABS): www.cbd.int/abs
The focus of this brief is on the use of genetic resources and associated traditional knowledge in the food and beverage industry, although conclusions and recommendations have broad applicability to other subsectors. Note that separate policy briefs review access and benefit-sharing issues pertain-ing to the pharmaceuticals, agriculture, botanicals, industrial biotechnology and cosmetic sectors. The reader is also referred to the overview brief in this series: Laird, S. and Wynberg, R. 2012. Bioscience at a crossroads: Implementing the Nagoya Protocol on access and benefit sharing in a time of scientific, technological and industry change. Secretariat of the Convention on Biological Diversity, Montreal. Policy briefs can be found a The food and beverage industry uses biological resources mainly as raw material, with genetic resources utilized less prominently than other sectors. More and more, however, scientific, technological and market changes are shifting the way in which the food and beverage sector Harvesting rooibos (Aspalathus linearis) in South Africa. Although traditionally used as a tea, increased R&D is leading to the incorporation of rooibos in uses biological resources, with increasing use of genetic the functional foods and cosmetics industries. Photograph: Environmental resources in interesting and innovative ways. Sub-sectors Monitoring Group focused on novel foods, nutrigenomics, biotechnol- the food and beverage sector has progressively become ogy, nanotechnology, bioactive ingredients, processing intertwined with other sectors such as pharmaceuticals, techniques and flavours, for example, are increasingly agriculture, biotechnology and botanicals. In line with using microorganisms in bio-processing – to create new trends in other sectors, microbial organisms are becom- flavours, colours or synthetic forms of natural ingredients; ing increasingly important, where, through biotechnol- are investigating new species and traditional foods for ogy, they are used to produce active compounds in much interesting bioactive compounds; are adding new nutri- higher yields.1 Novel enzymes from microorganisms are tive ingredients to functional foods; or are developing also being used to make cheeses or create new flavours highly specialised medical and personalised foods based and colours. Following health trends, and an increasingly on genetic resources.
aging population in the developed world, particular food and beverage products are being developed based on Although most activities pursued by the food and bever- their anti-oxidant properties, essential fatty acid compo- age sector do not involve research and development sition, or high level of proteins. Overall consumer trends (R&D) on genetic resources, the small component that include the adoption of products promising health and do are spurring greater involvement in access and benefit wellness benefits and a greater leaning towards exotic sharing (ABS) issues and, thus, greater relevance of the and ethnic flavours.2 Customers are also becoming more Nagoya Protocol on Access and Benefit-Sharing and the aware of the environmental and social footprint of the International Treaty on Plant Genetic Resources for Food products they consume, including the use of external and Agriculture (ITPGRFA). However, ABS is very new to inputs such as pesticides and fertilisers, impacts on biodi- the food and beverage sector and is not widely known or versity and climate, the extent to which ingredients are acknowledged by many of those involved. A few larger sourced locally, and the benefits received by producers.
companies are increasingly aware of international obliga-tions, stimulated in some instances by controversial cases This brief provides an overview of the industry, summa- that have revealed the challenges of integrating ABS into rizes key market and research and development trends, supply chains, but awareness remains extremely low for and analyzes the implications of these trends for govern- ments and other stakeholders, including indigenous and local communities, and companies who may be involved As markets and technologies have developed, and in ABS-related activities and in the implementation of the consumer choices have become more sophisticated, Nagoya Protocol. enzymes and also form part of functional foods. Functional food can be defined as ‘modified food or food ingredients INDUSTRY OVERVIEW that may provide a health benefit beyond the traditional nutrients it contains'. 3 Examples may include flavonoids AND MARKET TRENDS such as catechin or quercetin, or carotenoids such as lyco-pene and lutein, which occur widely in plants, are known for their anti-oxidant properties and are believed to have Use of natural ingredients in the food and beverage industry
a wide range of health effects4 (Table 1). Located between agriculture, processing, distribution The functional food market is a segment of the growing and retail, the global food and beverage industry for ‘functional ingredient' market which also encompasses the most part uses a range of biological raw materials dietary and nutritional supplements, known as ‘nutra- that are purchased directly or indirectly from farmers or ceuticals', ‘nutrigenomics' – which consider the inter- from intermediate suppliers of ingredients. These range action between foods or supplements and an individu- from commodities such as palm oil, sugar, tea and coffee, al's genome, and functional personal care products or through to smaller volumes of thousands of different ‘cosmeceuticals'.5 The incorporation of these functional natural ingredients. While the Nagoya Protocol does not cover the commodity trade of raw materials, nor local TABLE 1. Common Types of Functional Foods6
trade or subsistence use, it does apply to the utilization of genetic resources as defined by Article 2 (c) of the FUNCTIONAL
Protocol, to traditional knowledge within the scope of the Convention and to the benefits arising from the utilization A food enriched with of such knowledge. with calcium.
A food with added new Different activities of this sector may invoke ABS require- nutrients or components ments. These include: not normally found in a Bio-processing, where novel enzymes from micro- particular food.
organisms are used to make cheeses or create new flavours, colours or synthetic forms of natural A food from which a deleterious component releasers in meat has been removed, Innovations for existing food products that may be reduced or replaced with derived from the utilization of genetic resources. another substance with This could include the addition of a new nutritive beneficial effects.
ingredient, flavour or colour; and A food in which one The use of ‘new' species or traditional knowledge to commodities of the components investigate bioactive compounds of use to the food has been modified or industry, or to develop a particular food product.
enhanced through special content growing conditions, Natural ingredients, although typically small in volume, new feed composition, contribute significantly to food and beverage products genetic manipulation, or as flavours and fragrances, spices, herbs, colourants and ingredients in a wide range of products is evidence of the increasing overlap between once distinct industries such as pharmaceuticals, biotechnology and food. In the US, top selling food or spice products sold as supplements in mainstream markets have seen dramati-cally increased sales in recent years. Such products include: cranberry (+13%), soy (+10%), ginger (+13%), kelp (+41%), cayenne pepper (+49%), tumeric (21%), and alfalfa (+46%). Other edible or food-oriented herbs include garlic, green tea, bilberry, barley, grape seed, elderberry, spirulina, and maca root.7 In Japan, the top selling products also include many foods: beer yeast, propolis, Japanese plum, chlorella, barley verdure, vegetable juice, collagen, royal jelly and mulberry. In Brazil, top food supplement products include guarana, chitosan, fibers, fish oil, borage oil, lycopene, lutein, evening primrose oil, DHA, lecithin and aloe vera. In Europe, extracts from green tea, cocoa, blueberries, and tomato are becomingly increasingly popular.8 Given more sedentary lifestyles and increasing obesity around the world, there is also growing interest in natu- Buchu (Agathosma spp), native to southern Africa, is an important flavourant in ral alternatives to sugar, with particular attention paid the food and beverage industry. Photograph: Rachel Wynbergnow to stevia and agave. After the US Food and Drug Administration (FDA) approved stevia in 2008, sales which includes energy drinks, sports drinks and functional skyrocketed from $21 million worldwide to a projected waters, ready-to-drink tea and coffee, and yoghurt drinks $1-2 billion by 2014. Stevia-based Truvia is now the number and smoothies, as some of the most popular items, contin-two branded sugar substitute in the US, overtaking the ues to grow.11 artificial sweeteners Equal and Sweet'N Low, and second only to Splenda.9 Although the incorporation of ‘new' ingredients based on biological resources, such as the fruit of the African baobab Proteins are of particular interest for sports drinks and meal (Adansonia digitatis) and marula (Sclerocarya birrea) trees, replacements, to help build muscle mass, aid in weight loss, is taking place, the majority of functional foods are based and combat ageing. Vegan and allergen-free sports prod- upon waste streams of by-products from industry (e.g. ucts are gaining market share, including protein blends of grape seed extract, lycopene, soy isoflavones, green coffee hemp, sprouted brown rice, peas and grasses. The price of extract, omega 3 and 6 oils). These are sourced via cheap whey, a standard protein source, is volatile and so alterna- and well-established supply chains, typically based on major tive plant sources of protein are also of interest to manufac- commodities such as soya and coffee which present few ABS turers and formulators.10 The functional beverage market, issues and have well-documented safety histories.12 Retail sales of food and beverages worldwide reached US$11.6 trillion in 2009 and are predicted to top Like many other sectors, the food and beverage sector $15 trillion in 2014 (Figure 1). In 2010, functional food is characterised by economic uncertainty and high levels markets were estimated at $7-63 billion, expected to of volatility in commodity, currency and stock markets. reach $90.5 billion by 2013.14 The US is the largest market At the same time there is dynamic growth in emerging for functional foods, followed by Japan and Europe, which markets, increasing affluence and numbers of consumers combined attract 90% of total sales. The number of func- and significant changes in science and technology.13 tional food introductions in the North American market increased from 200 in 2006 to over 2000 in 2008.15 Global sales in functional beverages increased from $19 billion in 2006 to $23.4 billion in 2010, with sales of energy drinks the highest in this sector, topping $7 billion in 2012.16 In 2011, natural and organic foods were estimated to be worth about $53 billion.17 Although the Fairtrade certi- fied market has tripled since 2008, it was valued at under $5 billion in 2009 and accounts for less than 2% of the overall food and beverage retail market. Tables 2 and 3 illustrate total food and drink sales and top exporters of food and drink products. The European Union (EU) is both the largest exporter and importer of food and drink globally. Due to rising market share in FIgURE 1. global Food and Beverage Retail Revenues,
emerging economies, however, its share of world trade has been shrinking from 20.1% in 2001 to 17.8% in 2010.18 TABLE 2. Total Food and Drink Sales in the Top Ten
CONSOLIDATION AND INTEGRATION Countries and Regions, 201020
TOTAL SALES ($ billion)21
Scientific, technological and market changes are lead- ing to greater consolidation and integration both within the food and beverage sector – the so-called ‘farm to fork' supply chain – and across the multitude of sectors upon which it relies. Supply chains for the food and beverage sector are highly variable, and have tradition- ally comprised firms focused on agricultural production; companies which process raw food materials for further manufacture; those that are consumer oriented and which manufacture highly processed convenience food; as well as the array of firms dealing with logistics, packaging and transport, information and communication. Increasingly, however, companies are taking an integrated approach (*2009 data; **2008 data) Coffee, like these unroasted Ethiopian beans, was one of the first Native to the Americas, the sweet leaves of stevia are increasingly being used as a sugar agricultural commodities to be marketed through the fair trade system.
TABLE 3. Top 10 Exporters and Importers of Food and Drink Products, 201122
worldwide total
worldwide total
Exports ($ billion)
exports (%)
Imports ($ billion)
imports (%)
TABLE 4. Ranking of the Top 10 Food and Beverage Companies, 201226
Food and Beverage
Sales ($ Million)
Year Ending
The Coca Cola Company Archer Daniels Midland Company Anheuser-Busch InBev Chia seeds — well known as a superfood, have been cultivated in central America since the time of the Aztecs. to the food supply chain with less separation of these functions between them. A new scientific consortium led by the company Unilever, for example, aims to "identify nutritionally valuable varieties of fruits and vegetables from the past, in order to produce natural health ingredi-ents for the future".23 If the project is successful in identi-fying nutrient-rich plants, the long-term aim would be to incorporate them into Unilever's food products.
At the same time, there has been strong consolidation within ingredient suppliers, with the purchase of large and small firms by Archer Daniels Midland, BASF, DSM, Naturex and Nexira. Such companies will typically supply a range of ingredients to markets for food and bever-age, nutrition and health, and personal care. One of the primary motivations for this trend is to market ‘authentic' brands. One industry commentator noted: "If they buy smaller brands they tend to keep the brand separate as opposed to 15-20 years ago when they would subsume the brand." In 2008, the largest 20 food processors command-ed 20% of the global market, and further consolidation is predicted over time.24 The US dominates the world agri-food market, with seven of the top ten companies in this sector originating there (Table 4). The Swiss company Nestlé, now reconfigured as a "nutrition, health and well-ness company", was the top ranked food and beverage company in 2012, with sales of 85,5 billion.25 ETHICAL AND SUSTAINABLE SOURCING Some companies are setting in place clear plans for envi-ronmental and social sustainability as ‘green' and ‘local' become more important to consumers.27 Unilever, for example, has produced a Sustainable Living Plan to reduce its environmental footprint as well as a Code for Sustainable Agriculture while Nestlé has Responsible Sourcing Guidelines for seafood and for palm oil, soya, milk, coffee, cocoa, sugar and hazelnuts. Despite these trends, the Union for Ethical BioTrade notes that less than one-third of the global top 100 food companies report on biodiversity sourcing practices along their supply chain.28 Nonetheless, the environmental footprint of products has become mainstream in marketing with labels like ‘organ- There is increasing interest in the new functional food ingredients from marine ic', ‘fairtrade', ‘natural', ‘food miles', ‘locally grown', ‘purity' and ‘true to nature' increasingly gaining currency with consumers. mentally sustainable and socially responsible products are a whole new segment" noted one industry analyst.30 Sustainability, fair trade and organic sourcing are only Fair Trade and organic certification are well-devel- part of the landscape for ethical sourcing for the food and oped in this sector and are likely to continue to play an beverage sector. Increasingly, ABS issues are emerging increasingly important role in commodity supply chains. related to gaining access to traditional knowledge and However, the ‘ingredientization' of commodities, with ingredients new to the market. However, ABS awareness more and more materials being tapped, will likely require in the sector is very low and is often confused with the the development and adoption of alternative certifica- ethical sourcing of raw materials, which are outside the tion approaches by the food and beverage sector such as scope of the Nagoya Protocol.29 While sustainable raw FairWild, which focuses on the ethical and sustainable material sourcing is important for achieving the objectives sourcing of wild-harvested species.31 An important new of the CBD, in particular those on sustainable use, it does standard to emerge in recent years is that developed not in itself include the type of research arrangements by the Union for Ethical BioTrade (UEBT), a non-profit typical of biodiscovery.
organisation that promotes the ‘sourcing with respect' of ingredients that come from biodiversity.32 The UEBT A range of environmental and social certification systems has also recently published a practical guide on benefit and standards has been developed in the food and bever- sharing to assist companies that source natural ingredi- age sector, some emphasising the way ingredients are ents, including the different approaches that might be produced and supplied and others guaranteeing the followed when sourcing biological resources or conduct- quality and safety of the product. "Certified environ- ing R&D on genetic resources.33 novel foods, nutrigenomics, biotechnology, nanotech-nology, bioactive ingredients, processing techniques and flavours. These are also the sub-sectors in which genetic resources are more likely to be used. Increased health and wellness represent a major focus of these R&D activities. As one researcher remarked: "If you look at the food sector, the whole drive is about moving away from the bad, so it's about salt reduction, obesity, weight management, reducing calorie intake and remov- ON THE BRINK OF A TRANSFORMATION ing the sugar but keeping the sweetness".40 Bioactive ingredients from new species, traditional knowledge, Research and development in the food and beverage novel enzymes, or new nutritive ingredients have an sector represents only a small proportion of industry important role to play in this process, evidenced by the investment (ranging from 0.53% as a percentage of turn- success of Stevia rebaudiana as a naturally-sourced sugar over in the EU to 0.8% in Japan)34, with innovation often substitute, or the use of Hoodia gordonii, an appetite ‘invisible' in the final end product, typically occurring at suppressant developed on the back of traditional knowl- earlier stages of the supply chain, for example in seed edge of the indigenous San peoples.41 development.35 Although new products have to be formu-lated constantly – amounting to 1,200-1,500 individual Other examples point to the increasing intersection of products per year for a company with in-house research new molecular approaches and food innovation. New capacity, innovation primarily comes from know-how and technology, for example, has made the identification of on-going process improvements to existing ingredients taste receptors on the human tongue possible; research- rather than formal R&D using new ingredients which may ers are screening hundreds of thousands of molecules aris- be sourced from genetic resources.36 New ingredients that ing from natural compounds to find ones that can enhance can contribute towards good brain health, lowered choles- or reduce sweet, salty, bitter, savoury (umami) and sour terol and reduced obesity, will always be in demand37 but tastes in products.42 "Scientists and flavour chemists are the food sector is also inherently conservative, relying on going to be searching every blade of grass and every leaf tried and tested ingredients with no known toxicity side in the Amazon for something that might potentiate taste", effects.38 This also spills over into other sectors, due to remarked one culinary scientist.43 The chemical profiles of the tightening up of regulations for claims and toxicity. different heirloom varieties of vegetables are also being R&D investment is also impacted by lower profit margins investigated to identify genetic characteristics that lead in this sector, and a lack of willingness by the public to pay to good taste.44 high prices for foods and drinks that are seen as essential, rather than luxury items. Nanotechnology, the science of dealing with matter at an atomic and molecular scale, is also becoming a Parts of the food and beverage sector are, however, "on greater focus in the food industry, with a global market the brink of transformation", or have already transformed of $5.6 billion in 2012, an increase of $5.46 billion since from a low-medium technology industry to a medium-high 2006.45 To date nanotechnology has been used for largely technology industry with greater reliance on innovation functional purposes such as the encapsulation of nutraceu- and research.39 This includes sub-sectors focused on ticals, packaging and the extension of shelf-life but new Vanilla pods drying in the sun in Madagascar. Synthetic biology companies are now Larger food and beverage companies have in-house capacity to pursue R&D.
producing vanillin from glucose. Photo: Rachel Wynberg uses are on the horizon that may well challenge the way in In another example, the emerging field of nutrigenomics which the use of genetic resources is currently understood. aims to provide tailored nutritional advice or to develop The intersection of nanotechnology and biology, for exam- specialist food products specific to particular individu- ple, is allowing scientists to imagine and create biological als or populations.47 Several studies, for instance, have systems as the inspirations for technologies not yet creat- investigated the interactions between certain botanical ed - with profound implications for a range of sectors, and extracts on a particular genotype causing chronic intesti- for society at large. The use of microorganisms to synthe- nal inflammation. Although this science is still embryonic, sise functional nanoparticles is also receiving increased it suggests an increase in the use of techniques aimed interest. What this means for ABS is still uncertain, but towards personalized nutrition.48 In a similar vein, there is what is clear is that new regulatory approaches will need increasing use of genetic resources in the field of medical to be developed as these technologies unfold.
foods, meaning foods "intended for the specific dietary management of a disease or condition for which distinc- Processing techniques may also increasingly use genetic tive nutritional requirements, based on recognized scien- resources, especially with increased demand for natural tific principles, are established by medical evaluation".49 preservatives. The company Aquapharm Biodiscovery, for example, has identified a range of ingredients mined from Some of the larger food and beverage companies have the world's oceans that have anti-bacterial ingredients, in-house research capacity to pursue such research. including bacteriocins, so-called friendly bacteria that Nestlé, for example, has a research centre focused neutralise pathogens.46 on plant science, designed to find ways of improving the quality of plants, the sustainability of supply, and determining the right varieties for best flavour.50 Other SECTORAL CROSS-OVERS Scientific, technological and market changes are affect-ing the configuration and nature of the food and bever-age industry, along with increasing integration of the pharmaceutical, agricultural, biotechnology, cosmet-ic, and herbal medicine industries. Growing partner-ships between producers of food ingredients, flavours and fragrances and synthetic biology companies, for example, are developing biosynthetic versions of high value natural commodities.54 The Swiss-based synthetic biology company Evolva, Inc. has created a pathway to produce vanillin from glucose and has also begun work on a biosynthetic route to express saffron-derived genes in engineered microbes.55 Work is also underway to replace the botanical sources of vetiver and patchouli with biosyn-thetic versions.56 Such developments will have consider-able implications for the $22 billion global flavour and fragrance market and, through reduced demand for natural vanilla, could have profound impacts on the thou-sands of families that depend on the production of these Labelled ‘superfruit' due to their high level of anti-oxidants, açai berries are made into wine in the Brazilian Amazon. commodities for their livelihoods. companies will rely on smaller specialized companies for Breakthroughs in genetics and molecular science have innovation. A common trend is for smaller biotechnology also led to greater similarities in scientific approaches companies to do much of the discovery work to identify between food and pharmaceutical sectors. Figure 2 illus- novel compounds, and to then license use of the material trates the interface between nutrition and pharma in to food, pharmaceutical and cosmetic companies.51 these two sectors, and the evolution of traditional diets towards functional foods, dietary supplements, medi- Regulatory requirements in this sector are not as stringent cal foods and pharmaceuticals. In an example that illus- as for botanical medicines or pharmaceuticals but due to trates the fuzzy boundaries between sectors, food giant increased costs of the development cycle, nonetheless Nestlé, has established Nestlé Health Science to develop play a role in determining the levels of innovation.52 This "patient-centric healthcare and science-based personal- is particularly relevant for novel ingredients. For instance, ized nutritional solutions" and to "expand the boundaries the registration of baobab as a novel food ingredient in of nutrition". A partnership – Nutrition Science Partners, the EU, despite its long history of traditional use in Africa, with healthcare group Chi-Med, aims to bring innovative cost between Euro 250,000 and 450,000 and took up to nutritional and medicinal products derived from plants five years to secure.53 Of interest is that these costs were to market. Nutrition Science Partners will have access covered by PhytoTrade Africa, a non-profit organisation to Chi-Med's extensive collection of medicinal extracts working to secure markets for rural African producers, based on more than a thousand different herbal plants. rather than by the industry itself.
Nutrition Science Partners has recently announced the health claims, are attracted by the relatively lower prod- Prevention of (chronic) disease Treatmentof (chronic) disease uct development costs and shorter development times in this sector.58 There are also strong overlaps between the food and beverage and cosmetic sectors. The idea that one can "eat yourself beautiful" has resulted in nutraceuticals which claim to restore healthy skin and have been recommend- ed as an alternative to cosmetic surgery. Innéov products, for example, are promoted as "nutritional concentrates for skin and hair beauty", emerging from a joint venture FIgURE 2. Pharma-Nutrition interface.
between Nestlé and L'Oréal.59 Adapted from Eussen, S.R.B.M., Verhagen, H., Klungel, O.H., Garssen, J., van Loveren, H., van Kranen, H.J. and Rompelberg, As a means of by-passing stringent and costly toxicity C.J.M. 2011. Functional foods and dietary supplements: prod- tests, the cosmetics industry is also increasingly looking ucts at the interface between pharma and nutrition. European at known food ingredients.60 Argan oil, extracted from the Journal of Pharmacology 668:S2-9. nut of the Argan tree (Argania spinosa) which is endemic to Morocco, has traditionally been used medicinally, for enrolment of the first patient for a multi-centre Phase III culinary purposes as well as for cosmetics. In a similar vein, clinical trial of an extract of Andrographis paniculata ‘king baobab fruit powder is being used as a cosmetic ingre- of bitters' for ulcerative colitis. dient.61 These well-documented uses, particularly the fact that they can be safely ingested, mean that modern Trends towards convergence between the food and bever- research into cosmetic applications is simplified.62 age and pharmaceuticals sectors have been accompanied by pressure from governments to reduce public healthcare costs, and a desire from consumers to ‘self-medicate'. The rise of diet-related illnesses such as obesity and diabe- A range of activities may invoke ABS requirements in the tes, together with an aging population in the developed food and beverage sector, from the use of microorgan- world, has led to increased recognition of the power of isms to make new flavours or synthetic forms of natural food and nutrients to maintain health.57 As examples of ingredients, the investigation of new species for interest- these convergence trends, Pfizer has recently purchased ing bioactive compounds, the dependence on traditional a food supplement company, GlaxoSmithKline has invest- knowledge and use to indicate safety and efficacy of an ed in sports drinks and Nestlé has established the Nestlé ingredient,63 research into traditional foods, new uses of Health Science company, and the Nestlé Institute for existing food and beverage ingredients, or the addition of Health Sciences. new nutritive ingredients to functional foods. The range of issues introduced through using agricultural genetic In a similar development, large pharmaceutical compa- resources adds a further dimension to the complex ways nies such as Novartis Consumer Health, GlaxoSmithKline in which genetic resources and traditional knowledge are and Johnson & Johnson have begun showing an interest in used in the food and beverage sector.64 A growing interest functional foods. These companies, which have extensive in biodiversity as a source of new ingredients, the increas- experience in conducting clinical trials to substantiate ing integration of food with other sectors, and height- ened consumer interest in natural products, suggests an The low profit margins in this sector make it especially upward trend of using genetic resources in this sector. At vulnerable to additional regulatory hurdles. Countries the same time, greater use of synthetic biology in the long with similar biological resources but less stringent term implies less dependence on certain natural ingredi- or clearer regulations than other countries may be ents and a greater self-reliance among some sectors of the approached to source the material, or replacement ingre- food and beverage industry (although others will always dients will be found if certain species become difficult to prefer naturally-derived ingredients). Nonetheless, access. In a remark that is common to many other sectors, ABS-relevant activities in this sector are likely to contin- one company representative stated: "We have tried to ue to represent a relatively small proportion of its overall establish benefit-sharing agreements and tried very hard portfolio and profits. to find the right authority but it failed. It was frustrating – we invested a lot of resources in getting a good hypoth- Industry awareness of ABS remains extremely low in this esis but it was a waste and we went elsewhere. We can't sector with one analyst stating that "eighty per cent have hang around for five years trying to find the right person not heard of ABS" and a recent survey noting that only 6% to speak to so we move on and look for something else".68 of the top 100 food companies mention biodiversity-relat- This lack of regulatory and administrative clarity also has ed issues like traditional knowledge in annual reports.65 an impact on innovation. "We are looking at an oil coming A few larger companies are increasingly embedding from Africa", noted one company, "but there is not a lot ABS in their policies and procedures. For example, one of literature. We have asked toxicologists to do an evalu- company reported the requirement for Material Transfer ation but safety studies will cost 150,000 Euros. It does Agreements to state that providers must be compliant not give us specific advantages over olive oil because the with national laws and the CBD, and had established inter- regulatory hurdles are so high, and the ABS hurdles are nal mandatory procedures for every product using tradi- now also high. All of this is stopping innovation".69 tional ingredients as well as an early warning compliance monitoring system to stop projects that don't comply. The increasing integration of supply chains in this sector "We do biodiversity compliance training and all patent means that agricultural production, traditionally sepa- officers are briefed and are up to speed on the issues. We rated from food processing and manufacturing, is becom- realise biodiversity awareness must be built early on in the ing more central to strategies and operations. Some food process", remarked a representative from this company.66 and beverage companies are also engaging more and more with new molecular developments in the agricul- Some negative experiences have also turned companies tural sciences, for example by investigating new varieties away from using new ingredients and traditional knowl- for improved taste, flavour and climate adaptation. More edge. As noted by one researcher: "Investors are much and more, therefore, the food and beverage sector will be more sensitive to ABS and regulations and some are turn- affected by ABS issues that pertain both to the Nagoya ing away because the risk is considered too high. There is Protocol and to the International Treaty on Plant Genetic a fear of being labelled a biopirate. However, in countries Resources for Food and Agriculture.70 The nuances of such as South Africa where ABS legislation is already in these treaties and their national implementation have place, researchers report increased interest from industry important implications for the food and beverage sector, in local biodiversity, helped by an institutional environ- but are not yet fully understood by providers and users in ment that provides them with a local collaborator to navi- the sector. These gaps emphasize the need for ongoing gate procedures to access biodiversity".67 capacity development and awareness among those utiliz-ing genetic resources.
THE NAGOYA PROTOCOL: POLICY AND MARKET CHANGEABS is very new to the food and beverage sector and the fact that biological resources are mostly used as raw mate-rials and commodities also means that ABS issues may not be relevant to many users and providers. Lower profit margins, differing times and levels of investment for R&D, the varied shelf life of different ingredients, the role of ingredients in the final product, and the relevance of the ‘natural' component in marketing are all factors that need wider consideration in the uptake of ABS in this sector. At the same time, the increasing utilisation of genetic resources by the food and beverage sector in functional Young cultivated Hoodia gordonnii plants. The stems have appetite foods, medical foods, personalised nutrition products, suppressing properties, developed based on the traditional knowledge of the indigenous San. Photo: Rachel Wynberg new agricultural products, novel foods and new flavours, among other uses, means that ABS will become more and obtaining prior informed consent and reaching mutually more relevant. Implementation of the Nagoya Protocol agreed terms. The Nagoya Protocol also establishes one can support this process in the following ways: or more competent national authorities to grant access (Article 13). Establishment of an ABS Clearing-House Providing legal certainty, clear and workable regulations
(Article 14) for sharing information will help to ensure and effective and streamlined measures – Difficult, time-
transparency and enhance legal certainty. The particulari- consuming and bureaucratic regulations and permitting ties of the food and beverage sector, and the challenges of procedures, and an absence of legal certainty when acquir- isolating ABS-related R&D activities suggest that it would ing genetic resources from some countries, are regarded be especially useful to develop model contractual clauses by many companies as major stumbling blocks in research (Article 19) which can provide additional legal certainty to develop innovative food and beverage products. The and clarity and reduce transaction costs. Nagoya Protocol seeks to address these concerns and create an environment of legal certainty and mutual trust Supporting benefit sharing arising from the use of tradi-
by requiring Parties to designate a national ABS focal tional knowledge – Traditional knowledge associated with
point to make information available on procedures for genetic resources may be of interest to some segments of the food and beverage sector, both as a source of leads for potentially bioactive compounds, and, to a lesser extent, as new opportunities for marketing. Through Parties' implementation of Articles 7 and 12, the Nagoya Protocol can help Parties, companies and indigenous and local communities to ensure that prior informed consent is secured and mutually agreed terms are established when traditional knowledge associated with genetic resources is accessed and used.
This can be supported by the establishment of mecha-nisms pursuant to Article 12 to inform potential users of traditional knowledge associated with genetic resources about their obligations. The Nagoya Protocol encourages Parties to take into consideration indigenous and local communities' customary laws and to support the develop-ment by indigenous and local communities of community protocols, minimum requirements for mutually agreed terms and model contractual clauses for benefit sharing (Article 12, Paragraph 3). Providing clarity on scope – Most food and bever-
age products are based on commodity trade in large
volumes, as well as multiple ingredients, many of which
are known ingredients with established supply chains
that involve little R&D. The Nagoya Protocol, however,
focuses on the utilization of genetic resources as defined
by Article 2 (c) of the Protocol, and does not include
commodities in its scope, or ingredients that are used
as raw material. Local trade or subsistence use are also
excluded. Implementation of the Protocol can help to
provide further guidance to users and providers about
which resources and activities fall within its scope, thus
providing surety and clarity about ABS implications and
requirements. The Protocol also helps to provide clarity on
its relationship with the ITPGRFA. The ITPGRFA was nego-
tiated in harmony with the CBD, and the Protocol acknowl-
edges the fundamental role of plant genetic resources for
Top: Quinoa, a grain-like seed believed to have been domesticated in the Peruvian food and agriculture. Furthermore, Article 4, paragraph 3, Andes, has gained popularity as a ‘superfood' in the West.
provides that the Protocol is to be implemented in a mutu- Bottom: Dried mopane worms – the caterpillar of a moth species, are an important protein source for millions of Africans. There is increasing interest in insects as novel foods.
ally supportive manner with other relevant international instruments, thus providing an important opportunity to further enhance coordination and policy coherence between the agricultural and environmental sectors as regards ABS issues. Building the capacity of governments, researchers and
companies to engage with ABS and changing scientific
and technological developments – Understanding of ABS
among all user and provider groups in the food and bever-
age sector is still embryonic, aside from a few notable
exceptions. Considerable awareness-raising and capac-
ity development is thus required to ensure the effective
and mutually supportive implementation of the Nagoya
Protocol and the ITPGRFA. Such needs are well recog-
nized by the Nagoya Protocol (Articles 21 and 22) which
promotes awareness-raising and capacity development
and calls for a strengthening of human resources and
institutional capacities for effective implementation. The
importance of building the capacity of governments to
implement ABS measures is also well recognised, includ-
New molecular developments are investigating traditional varieties for improved taste, flavour and climate adaptation. Photo: Rachel Wynberg ing the development, implementation and enforcement of domestic legislation, the negotiation of mutually Developing regional ABS approaches – Many species used in
agreed terms, and the development of research capabili- the food and beverage sector are distributed across politi- ties to add value to genetic resources. The use of codes of cal boundaries, as is traditional knowledge associated conduct, guidelines and best practices and/or standards with genetic resources incorporated into novel foods and (Article 20) can help to enhance capacity and compliance drinks. Implementation of Article 11 on transboundary with ABS requirements. cooperation provides important opportunities to inves-tigate common regional or sub-regional approaches for Improving monitoring of the use of genetic resources – The
such resources and knowledge. Consideration of the need monitoring of ingredients incorporated into food and for and modalities of a global multilateral benefit-sharing beverage products presents significant challenges due mechanism, as stipulated by Article 10 of the Protocol, to the multiple ingredients and product lines that are may also be important in this context. involved across several sectors. Through the checkpoints described in Article 17, the internationally recognized certificate of compliance, and the ABS Clearing-House, the Nagoya Protocol can help to monitor the use of genetic resources throughout supply chains and provide evidence that prior informed consent has been obtained, that mutually agreed terms have been negotiated, and that benefits are have been shared.
ENDNOTES1 V. Maharaj, CSIR, pers. comm., 2012.
18 FoodDrinkEurope 2011. Data and trends of the European food and drink 2 Frost & Sullivan 2008. Consumer trends in the flavour industry. Food Industry News, 8 September.
19 Shanahan, C. 2010. 2020 Vision Global Food and Beverage Industry Outlook; Frost & Sullivan 2008. Consumer Trends in the Flavour Industry. Food Industry 3 Bloch, A. and Thomson, C. 1995. Position of the American Dietetic Association: News, 8 September. Phtyochemicals and Functional Foods. Journal of the American Dietetic Association, 95 (4) 493-496.
20 Food Drink Europe 2012. Data and Trends of the European Food and Drink 4 Halsted, C.H. 2003. Dietary supplements and functional foods: 2 sides of a coin? Amercian Journal Clinical Nutrition. 77(suppl): 1001S-7S.
21 Average Euro/US$ exchange rate in 2010 = 1.33 http://www.oanda.com/ 5 Betoret, E., Betoret, n., Vidal, D., and Fito, P. 2011. Functional foods development: trends and technologies. Trends in Food Science & Technology 22: 498-508.
22 Ibid.
6 Siro, I., Kapolana, E., Kapolna, B. and Lugasi, A. 2008. Functional food. Product development, marketing and consumer acceptance — A review. Appetite, 51: 456-467.; Kaur, S. and Das, M. 2011. Functional foods - an overview. Food Science Biotechnology 20(4): 861-875. 24 Shanahan, C. 2010. 2020 Vision Global Food and Beverage Industry Outlook, Frost & Sullivan, 2008. Consumer trends in the flavour industry. Food Industry 7 Blumenthal et al 2012.; SPINSscan Natural, 2012. See also, Laird, S. and News, 8 September Wynberg, R. 2013. Bioscience at a Crossroads. Access and benefit sharing in a time of scientific, technological and industry change: the botanicals sector. Secretariat of the Convention on Biological Diversity, Montreal. Policy briefs can 8 Dennis, J. 2012. 2012. International Herb & Botanical Trends. Nutraceuticals 27Cosgrove, J. 2011. Top Food Trends for 2012. Nutraceuticals World, 12 December.
9 Dennis, J. 2012. 2012 International Herb & Botanical Trends. Nutraceuticals 28 Biodiversity Barometer 2013. http://ethicalbiotrade.org/news/?wpfb_dl=26 29 "Utilization of genetic resources", as defined by Article 2 of the Nagoya 10 Nutrition Business Journal 2012. Sports Nutrition and Weight Loss Report, Protocol, means to conduct research and development on the genetic and/or biochemical composition of genetic resources, including through the application 11 Wright, R. 2012. Functional Beverage Market Update. Nutraceuticals World, 1 of biotechnology as defined in Article 2 of the Convention.
30 Culliney, K. 2012. New Sustainable Sector Resonates with ‘lost' organic 12 Phyto Trade Africa 2007. Commercial Research, Biodiversity and Benefit consumers. Food Navigator, 20 April.
Sharing: Exploring Best Practices for Biotrade and ABS. In The Cosmetics, Food 31 Cosgrove, J. 2011. Top Food Trends for 2012. Nutraceuticals World, 12 and Beverages Industry Perspective, Windhoek: Namibia, 18-20 June 2007.
13 Oakman, H. 2012. The world's top 100 food and beverage companies – 2012. Food Engineering, 4 October 2012. 14 Kaur, S. and Das, M. 2011. Functional Foods - An Overview. Food Science and Biotechnology 20(4): 861-875.
34 Food Drink Europe 2012. Data and Trends of the European Food and Drink 16 Wright, R. 2012. Functional Beverage Market Update. Nutraceuticals World, 1 35 Leis, M., Gijsbers, G., and van der Zee, F. 2010. Sectoral Onnovation 17 Leatherhead Institute 2011. Future Directions for the Global Functional Foods Performance in the Food and Drinks Sector, Final Report, Consortium Europe Market. Leatherhead Food Research. UK: Surrey.
INNOVA Sectoral Innovation Watch. Available at: http://ec.europa.eu/enterprise/policies/innovation/files/proinno/sector-report-food_en.pdf 36 Senker J. and Mangematin V. 2006. Biotech Innovation in Europe‘s Food and Drink Processing Industry: Promise, Barriers and Exploitation, in Handbook of Innovation in the Food & Drink Industry, Rama, R. (editor), Haworth Press, N.Y./ 56 ETC Group 2012. Synthetic Biology: Livelihoods and Biodiversity – Vetiver. Briefing, 3 July.
37 V. Maharaj, CSIR, pers. comm., 2012.
57 Eussen, S.R.B.M., Verhagen, H., Klungel, O.H., Garssen, J., van Loveren, H., van Kranen, H.J. and Rompelberg, C.J.M. Functional foods and dietary 38 S. Buchwald-Werner, Vital Solutions, pers. comm., 2012.
supplements: products at the interface between pharma and nutrition. 2011. European Journal of Pharmacology 668:S2-9.; Starling, S. 2013. The year 39 Leis, M., Gijsbers, G., and van der Zee, F. 2010. Sectoral Onnovation ahead: 2013 European nutra futures. 9 Jan, Performance in the Food and Drinks Sector, Final Report, Consortium Europe INNOVA Sectoral Innovation Watch. Available at: http://ec.europa.eu/enterprise/ 58 Siro, I., Kapolana, E., Kapolna, B. and Lugasi, A. 2008. Functional food. Product development, marketing and consumer acceptance — A review. Appetite, 51: 456-467.
40 V. Maharaj, CSIR, pers comm, 2012.
59 http://www.inneov.com 41 Wynberg, R. and Chennells, R. 2009. Wynberg, R. and Chennells, R. 2009. Chapter 6: Green diamonds of the South. A review of the San-Hoodia case. In: 60 S. Buchwald-Werner, Vital Solutions, pers. comm., 2012.
Wynberg, R., Chennells, R., and Schroeder, D. (editors). Indigenous Peoples, Consent and Benefit-sharing. Learning from the San-Hoodia Case. Springer, See, for example: Berlin, pp. 89-126.
42 Frost & Sullivan 2008. Consumer trends in the flavour industry. Food Industry News, 8 September.; Business Insights, 2010; www.chromocell.com 62 Ibid.
43 Gravitz, L. 2012. Taste bud hackers. Nature, 486: S14-S15 63 S. Buchwald-Werner, Vital Solutions, pers. comm., 2012.
44 Ibid.
64 See, also, the brief on agriculture prepared for this series. Wynberg, R. 2012. Bioscience at a crossroads. Access and benefit sharing in a time of scientific, 45 Baltazar, A. 2010. Today's Beauty from Within Market. Nutraceuticals World, 7 technological and industry change: The agricultural sector. Secretariat of the Convention on Biological Diversity, Montreal. Policy.
46 Addy, R. 2010. Oceans Mined for Food Solutions of the Future.
66 Hilary Green, Nestlé, pers. comm., 2013.
47 Betoret E., Betoret, N., Vidal, D. and Fito, P. 2011. Functional foods development: Trends and technologies. Trends in Food Science and Technology 22: 498-508.
67 V. Maharaj, CSIR, pers. comm., 2012.
48 Ibid.
68 Hilary Green, Nestlé, pers. comm., 2013.
49 Section 5(b) of the Orphan Drug Act (21 U.S.C. 360ee (b) (3)) 69 S. Buchwald-Werner, Vital Solutions, pers. comm., 2012.
50 Hilary Green, Nestlé, pers. comm., 2013.
70 The ITPGRFA establishes a multilateral system for 64 of the most important food security and forage crops (Annex 1 crops) and a set of rules for facilitated 51 See also, Laird, S. 2013. Bioscience at a crossroads. Access and benefit sharing access to these resources. Those who access genetic materials agree that they in a time of scientific, technological and industry change: the biotechnology will freely share any new developments with others for further research and, if sector. Secretariat of the Convention on Biological Diversity, Montreal. Policy not, will pay a percentage of any commercial benefits from their research into briefs can be found at: a common benefit-sharing fund for developing countries. A Standard Material Transfer Agreement sets agreed terms and conditions for the transfer and use 52 Starling, S. 2013. The Year Ahead: 2013 European Nutra Futures. Nutra of these crops. Annex 1 crops used outside of the scope of the ITPGFRA are Ingredients, 9 January; V. Maharaj, CSIR, pers. comm., 2012 governed by the Nagoya Protocol as are genetic resources not included in 53 Cyril Lombard, PhytoTrade Africa, pers. comm., 2012.
54 ETC Group 2012. Synthetic Biology: Livelihoods and Biodiversity – Vanilla. Briefing, 3 July.

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