Smarter Together

The global food system is facing a broad swath of daunting—and costly—challenges. From addressing the impacts of climate change on agriculture to ensuring nutritious food remains accessible and affordable to all, food and beverage companies around the world are searching for innovative solutions to complex problems. And Adam Adamek, director of innovation and business transformation at EIT Food, says the majority of these problems are simply too big for individual companies to tackle alone.

“Whether it’s reducing emissions in food processing, improving nutrition at scale, or making agriculture more efficient, these are problems that span across different disciplines and value chains,” he says. “I’ve been part of this space for nearly 30 years, and one thing I’ve seen consistently is that breakthroughs don’t happen in isolation.”

To more successfully address the type of challenges that immediately seem “too big, too systemic, or too slow-moving,” Adamek says that many organizations are now engaging in a practice known as open innovation. This unique approach to innovation can help organizations “unlock ideas and partnerships that [they] may not have even known [they] needed,” Adamek observes. “Open innovation allows you to bring in new perspectives, technologies, and skill sets … and speeds everything up.”

I’ve been part of this space for nearly 30 years, and one thing I’ve seen consistently is that breakthroughs don’t happen in isolation.

Defining Open Innovation

The term open innovation was first coined in 2003 by Henry Chesbrough, faculty director of the Garwood Center for Corporate Innovation at the Haas School of Business at the University of California, Berkeley. As companies, across industries, sought to deal with different obstacles and disruptions, he hypothesized that they would benefit from integrating more external research and development (R&D) into their innovation efforts. Such companies would not only have the advantage of new knowledge or technologies provided by those outside partners, they could also share their best practices with their partners—helping the whole industry move forward. Chesbrough defined open innovation as “the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively.”

“Open innovation is central to our strategy,” says Alexandre Bastos, head of front end innovation at Givaudan Taste and Wellbeing. “It allows us to engage with startups, academic institutions, and industry leaders to co-create sustainable food solutions. … It enables us to harness a wide range of ideas and technologies, accelerating the development of innovative food products.”

What exactly an open innovation project might look like, adds Kamesh Ellajosyula, president and chief innovation and quality officer at Olam Food Ingredients (OFI), can vary depending on the problem to be solved and the various partners involved. Yet, he says that the word open, to his mind, means that “everyone’s cards are on the table.

Open innovation is central to our strategy.

“Traditionally, companies in our industry can be very contractual and transactional,” he explains. “But open innovation has a spirit where we all come together and share what we know, what we don’t know, and establish common goals to achieve. No one is holding their cards too close to the vest.”

Relationships based on open innovation emphasize “co-creation and shared objectives,” says Bastos. And by engaging with other industry leaders, as well as cutting-edge startup companies, Givaudan has been able to successfully experiment with novel food technologies, ranging from molecular farming to precision nutrition.

“This collaborative environment fosters a culture of agility and experimentation that is essential in today’s fast-evolving food landscape,” says Bastos.

Yet, Cindy Stewart, who used to lead Open Innovation at Corbion and now has her own consulting firm, Innovative Food Science Consulting, says the key difference between open innovation and the kinds of traditional partnerships entered into with suppliers, incubators, or accelerators is that any new knowledge or technology doesn’t just benefit the biggest company at the table.

“It’s a much more symbiotic relationship,” Stewart says. “Members of open innovation teams need something from the other organizations involved to get a new product to market. You want the kind of relationships where everyone gets something—where everyone can win.”

You want the kind of relationships where everyone gets something—where everyone can win.

Enabling Agility

Adoption of open innovation projects is growing at a fast pace in the food ecosystem because of the many advantages they confer—speed, agility, and knowledge sharing. Eric Weisser, senior director and head of open innovation and customer innovation at Ingredion, says that’s because many large organizations are now too big to pivot when faced with a new challenge. Open innovation allows them to bring more agility back into the organization’s R&D efforts. And that, in turn, can fuel game-changing products and processes.

“[Bigger companies] are no longer able to really delve deeply into new areas of interest. We have so many competing activities, which hampers our ability to move fast and to focus on new, specific problems,” he says. “At this point, we understand that we can’t do everything all by ourselves. … When we look outside the company, we can see there are a lot of other people who are smarter than us that are working on things that we see as being beneficial to our business.”

Sze Tan, executive director of the Agency for Science, Technology and Research (A*STAR) Singapore Institute of Food and Biotechnology Innovation (SIFBI), says many food and beverage startups focus on a very specific technology domain. Because of that, they can work much faster to solve niche problems.

“Especially with emerging technologies, companies can work with these startups on something that is high risk, but potentially high gain, and rely on the startup’s expertise,” she says. “Instead of trying to invest fully in something internally, they can partner so they can create value with lower investment and lower risk.”

Benjamin Smith, executive director and president of the Monell Chemical Senses Center, and architect of an open innovation research collaboration between Monell and A*STAR, says pulling the right people together can allow companies to move in directions they may not have expected to go.

The combined results of several different people, with different backgrounds and skill sets, working together on a problem is often much more effective than a single scientist or lab working alone.

Monell’s new alliance with A*STAR SIFBI, for example, called East Meets West, is working to deepen the industry’s understanding of how chemosensory perception influences internal signals of hunger and satiety—knowing that these chemical senses can vary across cultures and populations.

“The combined results of several different people, with different backgrounds and skill sets, working together on a problem is often much more effective than a single scientist or lab working alone,” he says. “When we can bring scientists from different fields together, we can work on finding solutions that will improve health for the population, health for individuals, and also the health of our environment.”

That enhanced access to diverse ideas, says Bastos, can help companies move new products to market more quickly, too. He says the 2024 MISTA Growth Hack event is a great example of how companies can leverage open innovation platforms to do just that. MISTA, which means “tasty morsel” in Sanskrit, is a San Francisco–based innovation platform created by Givaudan, Danone, Ingredion, AAK, and other large companies. Its mission is to accelerate the development of fermentation-powered food solutions.

“The [Growth Hack] initiative sought to elevate food solutions for the future by bringing together 14 leading startups from around the world,” Bastos says. “Each startup partnered with a technical team composed of experts from major corporate MISTA members to develop food or beverage prototypes that showcased the benefits of their key ingredients in practical and appealing applications.”

The results from Growth Hack can help all organizations involved better understand what kind of investment is really required to launch a biomass fermentation product in the future—as well as understand the potential return on investment. And that leads to one of the last great advantages of open innovation: spreading the risk of new endeavors across a pool of partners.

“Innovation is uncertain. Some things will fail,” says Adamek. “But when you share the load with other partners, those risks are easier to manage. At EIT Food, we’ve seen this play out again and again. For every €1 we’ve invested in innovation projects, we’re seeing €21 in projected returns over 15 years. That includes business benefits, environmental impact, and even improved health outcomes.”

Overcoming Obstacles

As with any partnership, challenges that include cultural differences within organizations, ensuring goal alignment, and balancing speed with the right combination of scientific rigor can get in the way of results. Yet Tan says the greatest obstacle to open innovation remains the most obvious: intellectual property (IP).

“Determining who owns what comes down to a case-by-case negotiation. There may be discussions of background and foreground IP, depending on the situation,” she says. “There are many different scenarios, and they all take ages to settle.”

But, beyond IP ownership, Bastos says that open projects can also hit the same sorts of hurdles you might expect in any new R&D project. That might include consumer sensory acceptance of an end product—or overcoming barriers to regulatory compliance once you seek to take that product to market.

“When developing new plant-based proteins, we often face challenges related to texture and flavor that consumers expect from traditional meat products,” he says. “Our open innovation approach offers an ideal way to tackle these challenges. For example, during the MISTA Growth Hack, we established cross-functional teams that combined expertise from various companies to develop prototypes. We also invested in consumer testing to gather feedback early in the development process, ensuring that products meet market expectations.”

Monell’s Smith adds that even basics like time zone differences, data harmonization efforts, and differing scientific methodologies can take some time to iron out when different partners start working together.

“From the very beginning, you need to make sure you’re coming up with the same way of doing things,” he says. “If we are doing science one way here and they are doing it a different way over there, then we won’t have the right comparisons. You need to talk about it. Communication, as in most things, is key here.”

Then there’s a need for strong leadership across innovation partners. Stewart says that any project should have a C-suite champion to help guide mindset—not to mention continued funding. But Weisser adds that having the right leaders in smaller partners, especially startup companies, is also crucial. “Entrepreneurs work on different timescales than bigger companies do. They often have different goals and cultures,” he says. “So, the quality of leadership in the startup, as well as the quality of the science they do, is so important. You want to see how they lead and can help guide the project as it moves forward.”

Taken together, Adamek says it’s not easy to come up with an open innovation agreement because different partners are coming in with different timelines, cultures, and expectations. There can never be a one-size-fits-all approach. Everyone needs to be open and transparent from the start in order to succeed.

“Startups want speed and agility. Corporations want safety and compliance. Universities care about research,” he says. “If you don’t align early, things can derail. That’s why we put a lot of focus on relationship building and clarity from the start. Who owns what? How do we make decisions? What happens if things go sideways? Getting those questions answered upfront—especially around IP and revenue sharing—can help prevent conflict later.”

In the end, I think what makes open innovation work is when you determine how to enable your partners to continue on their journey so they are successful.

Lessons From the Trenches

Beyond initial expectation setting, Stewart says that open innovation projects are more successful when organizations take the time to build trust across partners.

“Starting from the beginning with the idea that everyone is going to get something out of the partnership when a product goes to market, that’s what is going to help build that kind of trust that will take you forward together,” Stewart observes.

For his part, Weisser says Ingredion’s initial forays into open innovation did not work as well as hoped at first because they “wanted everything.” He says it took some time for them to recognize the unique value proposition that their partners brought to the mix—and to take a step back so they could leverage the most value from their shared arrangement.

“Before, we came in and said we wanted all the go-to-market. We wanted the exclusivity. We wanted the IP. That’s where you get unequal power dynamics,” Weisser says. “Once we started approaching these projects thinking instead about how we could make our external partners successful, rather than thinking about how they’d make us successful, things changed. In the end, I think what makes open innovation work is when you determine how to enable your partners to continue on their journey so they are successful. Because when they are successful, you will be, too.”

But the very first step, upon coming together, Ellajosyula says, should be to carefully define the problem you and your partners are trying to solve. Far too often, he maintains, groups try to tackle nebulous, open-ended challenges. Instead, he recommends taking the time to get very specific. He says OFI’s efforts to eradicate disease in West African cocoa was one such effort.

“This is a problem that took different industry partners, research institutions, and farmers coming together with a single-minded focus to identify the vectors to disease in order to address the spread,” he says.

Adamek concurs that problem definition is a great place to start. Then, you and your partners can build upon your shared objective.

“Start with a real problem—something that matters to your customers, your business, and, ideally, the world. Don’t do open innovation for public relations. Do it to solve something that keeps you up at night,” says Adamek. “Then, find the right partners. Look beyond your usual circle. Be clear about your goals and be honest about your limits. If you can, start small. Run a pilot. Test the waters. Learn together.”

That last imperative is perhaps the most important. Because, Adamek says, innovation no longer happens behind closed doors. The problems are too big. Technological advances are too quick. And the people who have the answers you seek probably aren’t located within the four walls of your organization.

“Open innovation isn’t a trend anymore. It’s the new normal,” Adamek says. “Every week, I see big players announcing challenges, partnering with startups, and codeveloping new technology. It’s exciting. And they are doing it because the pressure is real. We are facing wicked problems, and no one can fix them alone.”ft