Definitions

 

It is challenging to find an inclusive way to cover all aspects of food production and sale. The Food Standards Agency, a government body in the UK, describes it thus: "...the whole food industry – from farming and food production, packaging and distribution, to retail and catering."

 

The Economic Research Service of the USDA uses the term food system to describe the same thing:

 

"The U.S. food system is a complex network of farmers and the industries that link to them. Those links include makers of farm equipment and chemicals as well as firms that provide services to agribusinesses, such as providers of transportation and financial services. The system also includes the food marketing industries that link farms to consumers, and which include food and fiber processors, wholesalers, retailers, and foodservice establishments."

Industry size

Processed food sales worldwide are approximately US$3.2 trillion (2004). In the U.S., consumers spend approximately US$1 trillion annually on food, or nearly 10 percent of the Gross Domestic Product (GDP). Over 16.5 million people are employed in the food industry.

Agriculture

Agriculture is the process of producing food, feed, fiber and other desired products by the cultivation of certain plants and the raising of domesticated animals (livestock). The practice of agriculture is also known as "farming", while scientists, inventors and others devoted to improving farming methods and implements are also said to be engaged in agriculture. More people in the world are involved in agriculture as their primary economic activity than in any other, yet it only accounts for four percent of the world's GDP.

Food processing

Food processing is the methods and techniques used to transform raw ingredients into food for human consumption. Food processing takes clean, harvested or slaughtered and butchered components and uses them to produce marketable food products. There are several different ways in which food can be produced. 

 

One Off Production This method is used when customers make an order for something to be made to their own specifications, for example a wedding cake. The making of One Off Products could take days depending on how intricate the design is and also the ability of the chef making the product.

 

Batch Production This method is used when the size of the market for a product is not clear, and where there is a range within a product line. A certain number of the same goods will be produced to make up a batch or run, for example at Gregg's Bakery they will bake a certain number of chicken bakes. This method involves estimating the amount of customers that will want to buy that product.

 

Mass production This method is used when there is a mass market for a large number of identical products, for example, chocolate bars, ready meals and canned food. The product passes from one stage of production to another along a production line.

 

Just In Time This method of production is mainly used in sandwich bars such as Subway. All the components of the product are there and the customer chooses what they want in their product and it is made for them fresh in front of them.

 

Wholesale and distribution

A vast global transportation network is required by the food industry in order to connect its numerous parts. These include suppliers, manufacturers, warehousing, retailers and the end consumers. There are also those companies that, during the food processing process, add vitamins, minerals, and other necessary requirements usually lost during preparation. Wholesale markets for fresh food products have tended to decline in importance in OECD countries as well as in Latin America and some Asian countries as a result of the growth of supermarkets, which procure directly from farmers or through preferred suppliers, rather than going through markets. The constant and uninterrupted flow of product from distribution centers to store locations is a critical link in food industry operations. Distribution centers run more efficiently, throughput can be increased, costs can be lowered, and manpower better utilized if the proper steps are taken when setting up a material handling system in a warehouse.

 

Retail

With populations around the world concentrating in urban areas,[4] food buying is increasingly removed from all aspects of food production. This is a relatively recent development, having taken place mainly over the last 50 years. The supermarket is the defining retail element of the food industry, where tens of thousands of products are gathered in one location, in continuous, year-round supply.

Food preparation is another area where change in recent decades has been dramatic. Today, two food industry sectors are in apparent competition for the retail food dollar. The grocery industry sells fresh and largely raw products for consumers to use as ingredients in home cooking. The food service industry by contrast offers prepared food, either as finished products, or as partially prepared components for final "assembly".

Food industry technologies

Sophisticated technologies define modern food production. They include many areas. Agricultural machinery, originally led by the tractor, has practically eliminated human labor in many areas of production. Biotechnology is driving much change, in areas as diverse as agrochemicals, plant breeding and food processing. Many other areas of technology are also involved, to the point where it is hard to find an area that does not have a direct impact on the food industry. Computer technology is also a central force, with computer networks and specialized software providing the support infrastructure to allow global movement of the myriad components involved.

Marketing

As consumers grow increasingly removed from food production, the role of product creation, advertising, publicity become the primary vehicles for information about food. With processed food as the dominant category, marketers have almost infinite possibilities in product creation.

Media & Marketing

A key tool for FMCG marketing managers targeting the supermarket industry includes national titles like The Grocer in the U.K., Checkout in Ireland, Progressive Grocer in the U.S., and Private Label Europe for the entire of the European Union.

Labour and education

Until the last 100 years, agriculture was labor intensive. Farming was a common occupation. Food production flowed from millions of farms. Farmers, largely trained from generation to generation, carried on the family business. That situation has changed dramatically. In North America, over 50% of the population were farm families only a few decades ago; now, that figure is around 1-2%, and about 80% of the population lives in cities. The food industry as a complex whole requires an incredibly wide range of skills. Several hundred occupation types exist within the food industry.

Research and development

Research in agricultural and food processing technologies happens in great part in university research environments. Projects are often funded by companies from the food industry. There is therefore a direct relationship between the academic and commercial sectors, as far as scientific research.

 

Cosmetic industry

The cosmetic industry is a profitable business for most manufacturers of cosmetic products. By cosmetic products, we understand anything that is intended for personal care such as skin lotions or sun lotions, makeup and other such products meant to emphasize one's look. Given the technological development and the improvement of the manufacturing process of cosmetics and not least due to the constantly increasing demand of such products, this industry reported an important growth in terms of profit.

The cosmetic industry has not only grown only in the United States, but also in various parts of the world which have become famous for their cosmetic precuts. Some of these include France, Germany, Italy and Japan. It has been estimated that in Germany, the cosmetic industry generated sales of EUR 12.6 billion at retail sales, in 2008 which made of German cosmetic industry the 3rd in the world, after Japan and the United States. Also, it has been shown that in the same country, this industry has grown with nearly 5 percent in one year, from 2007 to 2008. The exports of Germany in this industry reached in 2008 EUR 5.8 billion whereas the imports of cosmetics totaled EUR 3 billion. The main countries that export cosmetics to Germany are France, Switzerland, the United States and Italy and they mainly consist of makeup and fragrances or perfumes for women.

After the United States, Japan is the second largest market for cosmetics in the world, a market worth about JPY 1.4 trillion per year.

 

The worldwide cosmetics and perfume industry currently generates an estimated annual turnover of US$170 billion (according to Eurostaf - May 2007). Europe is the leading market, representing approximately €63 billion, while sales in France reached €6.5 billion in 2006, according to FIPAR (Fédération des Industries de la Parfumerie - the French federation for the perfume industry). France is another country in which the cosmetic industry plays an important role, both nationally and internationally. Most products on whose label it is stated "Made in France" are valued on the international market. According to data from 2008, the cosmetic industry has risen constantly in France, for 40 consecutive years. In 2006, this industrial sector reached a record level of EUR 6.5 billion. Famous cosmetic brands produced in France include Vichy, Yves Saint Laurent, Yves Rocher and many others.

The Italian cosmetic industry is also an important player in the European cosmetic market. Although not as large as in other European countries, the cosmetic industry in Italy was estimated to reach EUR 9 billion in 2007. The Italian cosmetic industry is however dominated by hair and body products and not makeup as in many other European countries. In Italy, hair and body products make up approximately 30% of the cosmetic market. Makeup and facial care however are the first cosmetic products to be exported in the United States.

Due to the popularity of cosmetics, especially fragrances and perfumes, many designers who are not necessarily involved in the cosmetic industry came up with different perfumes carrying their names. Moreover, most actors and singers also have their own perfume line (such as Celine Dion). The designer perfumes are, like any other designer products, the most expensive in the industry as the consumer pays not only for the product but also for the brand. Famous Italian fragrances are produced by Giorgio Armani, Dolce and Gabbana and so on.

The European Commission and the FDA are the two bodies making legislation in what concerns cosmetic industry and its various aspects within the European Union, respectively in the United States. In the European Union, the circulation of cosmetic products and their safety are law subjects since 1976. One of the newest amendments of the directive concerning cosmetic industry comes as a result of the attempt to ban animal testing. Therefore, testing cosmetic products on animals is illegal in the European Union from September 2004 and testing separate ingredients of such products on animals is also prohibited by law starting with March 2009.

The FDA joined with thirteen other Federal agencies in forming the Interagency Coordinating Committee on the Validation of Alternative Methods (ICCVAM) in 1997 which is an attempt to ban animal testing and find other methods to test the cosmetic products.

The cosmetic industry worldwide seems to be continuously developing, now more than ever with the advent of the Internet companies. Many famous companies sell their cosmetic products online also in countries in which they do not have representatives.

Special effects

In addition to over-the-counter cosmetic products, recent years have seen an increasing market for prescription or surgical cosmetic procedures. These range from temporary enhancements, such as cosmetic colored contact lenses, to major cosmetic surgery. To temporary fashionable enhancement belongs application of false eyelashes or eyelash extensions, in order to enhance the natural eyelashes and make eye appearance more attractive.

Many techniques, such as microdermabrasion and physical or chemical peels, remove the oldest, top layers of skin cells. The younger layers of skin left behind appear more plump, youthful, and soft. Permanent application of pigments (tattooing) is also used cosmetically.

Ingredients

While there is assurance from the largest cosmetic companies that ingredients have passed quality tests and official regulations, and are therefore generally safe to use, there is a growing preference for cosmetics that are without any "synthetic" ingredients, especially those derived from petroleum. Once a niche market, handmade and certified organic products are becoming more mainstream.

Ingredients' listings in cosmetics are highly regulated in many countries. The testing of cosmetic products on animals is a subject of some controversy. It is now illegal in the United Kingdom, the Netherlands, and Belgium, and a ban across the European Union is due to come into effect in 2009.

Organic and natural ingredients

Even though many cosmetic products are regulated, there are still health concerns regarding the presence of harmful chemicals within these products.[citation needed] Aside from color additives, cosmetic products and their ingredients are not subject to FDA regulation prior to their release into the market. It is only when a product is found to violate Federal Food, Drug, and Cosmetic Act (FD&C Act) and Fair Packaging and Labeling Act (FPLA) after its release that the FDA may start taking action against this violation. With many new products released into the market every season, it is hard to keep track of the safety of every product. Some products carry carcinogenic contaminant 1,4- dioxane. Many cosmetic companies are coming out with "All natural" and "Organic" products. All natural products contain mineral and plant ingredients and organic products are made with organic agricultural products. Products who claim they are organic are not, unless they are certified "USDA Organic."

Nutraceutical, a term combining the words “nutrition” and “pharmaceutical”, is a food or food product that provides health and medical benefits, including the prevention and treatment of disease. Such products may range from isolated nutrients, dietary supplements and specific diets to genetically engineered foods, herbal products, and processed foods such as cereals, soups, and beverages. With recent breakthroughs in cellular-level nutraceuticals agents, researchers, and medical practitioners are developing templates for integrating assessing and assessing information from clinical studies on complimentary and alternative therapies into responsible medical practice. The term nutraceutical was originally defined by Dr. Stephen L. DeFelice, founder and chairman of the Foundation of Innovation Medicine (FIM), Crawford, New Jersey. Since the term was coined by Dr. DeFelice, its meaning has been modified by Health Canada which defines nutraceutical as: a product isolated or purified from foods, and generally sold in medicinal forms not usually associated with food and demonstrated to have a physiological benefit or provide protection against chronic disease. Examples: beta-carotene, lycopene The definition of nutraceutical that appears in the latest edition of the Merriam-Webster Dictionary is as follows: A food stuff (as a fortified food or a dietary supplement)that provides health benefits Nutraceutical foods are not subject to the same testing and regulations as pharmaceutical drugs. The American Nutraceutical Association works with the Food & Drug Administration in consumer education, developing industry and scientific standards for products and manufacturers, and other related consumer protection roles. The FDA provides a list of dietary supplement companies receiving warning letters about their products.

Market and demand

Nearly two-thirds of the American population takes at least one type of nutraceutical health product. The use of nutraceuticals, as an attempt to accomplish desirable therapeutic outcomes with reduced side effects, as compared with other therapeutic agents has met with great monetary success. The preference for the discovery and production of nutraceuticals over pharmaceuticals is well seen in pharmaceutical and biotech companies. Some of the pharmaceutical and biotech companies, which commit major resources to the discovery of nutraceuticals include Monsanto(St. Louis, MO), American Home Products(Madison, NJ), Dupont(Wilmington,DE), Abbott Laboratories(Abbott Park, IL), Warner-Lambert(Morris Plains,NJ), Johnson & Johnson(New Brunswick,NJ), Novartis(Basel,Switzerland),Metabolex(Hayward,CA), Genzyme Transgenic,PPL Therapeutics, and Interneuron(Lexington,KY). The nutraceutical industry in the US is about $86 billion. This figure is slightly higher in Europe and, in Japan, represents approximately a quarter of their $6 billion total annual food sales- 47% of the Japanese population consume nutraceuticals. Even without specific financial figures, business reports continually suggest that the market is consistently growing.
One possible explanation for the growth of nutraceuticals in the United States is the aging baby-boomer population. As the average age of the citizens continues to rise, the population increases its focus on health and wellness. By halfway through the 21st century, there could be almost 142 million Americans over the age of 50, based on a projected population of nearly 400 million citizens.

Although the price of some nutraceuticals may drop as generic products make their way into the market, people’s dependence on these products and their increasing availability suggests that the growth of the market shall remain stable.

Food as medicine

Considered a father of Western medicine, Hippocrates advocated the healing effects of food.The Indians , Egyptians, Chinese, and Sumerians are just a few civilizations that have provided evidence suggesting that foods can be effectively used as medicine to treat and prevent disease. Ayurveda,the 5 thousand year old ancient indian health science have mentioned benefits of food for therapautic purpose.Documents hint that the medicinal benefits of food have been explored for thousands of years.[8] Hippocrates, considered by some to be the father of Western medicine, said that people should “Let food be thy medicine.”
The modern nutraceutical market began to develop in Japan during the 1980s. In contrast to the natural herbs and spices used as folk medicine for centuries throughout Asia, the nutraceutical industry has grown alongside the expansion and exploration of modern technology.[9]

New research conducted among food scientists show that there is more to food science than what was understood just a couple decades ago. Until just recently, analysis of food was limited to the flavor of food (sensory taste and texture) and its nutritional value (composition of carbohydrates, fats, proteins, water, vitamins and minerals). However, there is growing evidence that other components of food may play an integral role in the link between food and health.

These chemical components are derived from plant, food, and microbial sources, and provide medicinal benefits valuable to long-term health. Examples of these nutraceutical chemicals include probiotics, antioxidants, and phytochemicals.
Nutraceutical products were considered alternative medicine for many years. Nutraceuticals have become a more mainstream supplement to the diet, now that research has begun to show evidence that these chemicals found in food are often effective when processed effectively and marketed correctly.

Classification of nutraceuticals

Nutraceuticals is a broad umbrella term used to describe any product derived from food sources that provides extra health benefits in addition to the basic nutritional value found in foods. Products typically claim to prevent chronic diseases, improve health, delay the aging process, and increase life expectancy.

There is minimal regulation over which products are allowed to display the nutraceutical term on their labels. Because of this, the term is often used to market products with varying uses and effectiveness. The definition of nutraceuticals and related products often depend on the source. Members of the medical community desire that the nutraceutical term be more clearly established in order to distinguish between the wide varieties of products out there. There are multiple different types of products that fall under the category of nutraceuticals.

Dietary supplements

Dietary supplements, such as the vitamin B supplement show above, are typically sold in pill form. A dietary supplement is a product that contains nutrients derived from food products that are concentrated in liquid or capsule form. The Dietary Supplement Health and Education Act (DSHEA) of 1994 defined generally what constitutes a dietary supplement. “A dietary supplement is a product taken by mouth that contains a "dietary ingredient" intended to supplement the diet. The "dietary ingredients" in these products may include: vitamins, minerals, herbs or other botanicals, amino acids, and substances such as enzymes, organ tissues, glandulars, and metabolites. Dietary supplements can also be extracts or concentrates, and may be found in many forms such as tablets, capsules, softgels, gelcaps, liquids, or powders.” Dietary supplements do not have to be approved by the U.S. Food and Drug Administration (FDA) before marketing. Although supplements claim to provide health benefits, products usually include a label that says: “These statements have not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure, or prevent any disease.” 

Functional foods

Functional foods are designed to allow consumers to eat enriched foods close to their natural state, rather than by taking dietary supplements manufactured in liquid or capsule form. Functional foods have been either enriched or fortified, a process called nutrification. This practice restores the nutrient content in a food back to similar levels from before the food was processed. Sometimes, additional complementary nutrients are added, such as vitamin D to milk.
Health Canada defines functional foods as “ordinary food that has components or ingredients added to give it a specific medical or physiological benefit, other than a purely nutritional effect.”  In Japan, all functional foods must meet three established requirements: foods should be (1) present in their naturally-occurring form, rather than a capsule, tablet, or powder; (2) consumed in the diet as often as daily; and (3) should regulate a biological process in hopes of preventing or controlling disease.

Farmaceuticals

According to a report written for the United States Congress entitled "Agriculture: A Glossary of Terms, Programs, and Laws", “(Farmaceuticals) is a melding of the words farm and pharmaceuticals. It refers to medically valuable compounds produced from modified agricultural crops or animals (usually through biotechnology). Proponents believe that using crops and possibly even animals as pharmaceutical factories could be much more cost effective than conventional methods (i.e., in enclosed manufacturing facilities) and also provide agricultural producers with higher earnings… “At issue in the United States has been whether the current system for regulating biotechnology is adequate for ensuring the safety (to humans, animals and crops, and the environment) of newly emerging applications, such as farmaceuticals… The term farmaceuticals is more frequently associated, in agricultural circles, with medical applications of genetically engineered crops or animals.”  

Examples

Studies show that broccoli may help in the prevention of cancer
The following is an incomplete list of foods with reported medicinal value:
Antioxidants: resveratrol from red grape products; flavonoids inside citrus, tea, wine, and dark chocolate foods; anthocyanins found in berries
Reducing hypercholesterolemia:soluble dietary fiber products, such as psyllium seed husk
Cancer prevention: broccoli (sulforaphane)
Improved arterial health: soy or clover (isoflavonoids)
Lowered risk of cardiovascular disease:alpha-linolenic acid from flax or Chia seeds
In addition, many botanical and herbal extracts such as ginseng, garlic oil, etc. have been developed as nutraceuticals. Nutraceuticals are often used in nutrient premixes or nutrient systems in the food and pharmaceutical industries.

Effectiveness and safety

Regulation Unlike pharmaceutical drugs, within the United States, nutraceutical products are widely available and monitored with the same level of scrutiny as "dietary supplements". Within the oversight of the Federal Food & Drug Administration, unlike many other countries such as Canada, the use of broad-based definitions creates inconsistent credibility distinguishing the standards, function, and effectiveness between "nutraceuticals" and "dietary supplements". Within this loose regulatory oversight, legitimate companies producing nutraceuticals provide credible scientific research to substantiate their manufacturing standards, products, and consumer benefits and differentiate their products from "dietary supplements". Despite the international movement within the industry, professional organizations, academia, and health regulatory agencies to add specific legal and scientific criterion to the definition and standards for nutraceuticals, within the United States the term is not regulated by FDA. The FDA still uses a blanket term of "dietary supplement" for all substances without distinguishing their efficacy, manufacturing process, supporting scientific research, and increased health benefits. In 2005, the National Academies Institute of Medicine and National Research Council created a blue-ribbon committee to create an improved framework for the Federal Food & Drug Administration to evaluate dietary supplements. Though the improved framework fails to distinguish between "nutraceuticals" and "dietary supplements". With the continued use of a broad definition and lacking greater distinction, a cost-effective and scientifically based framework was needed to evaluate the safety of "dietary supplements" including those consumer products recognized internationally as "nutraceuticals"