How does industry convergence affect suppliers and consumers? An analysis of the emerging sectors of functional foods and biopolymers

This chapter focuses on the implications of industry convergence for different stakeholder groups of the agrifood industry. Industry convergence is currently affecting different areas of the economy and can be defined as a dilution of borders between two or more hitherto distinctly operating industrial sectors (Choi and Valikangas, 2001; Broring et al., 2006). In a context of convergence, suppliers and consumers are facing highly dynamic industrial environments. New technological developments and changing customer behaviour, as well as changes in regulation and standards among various industries, result in changes of demand structures, shortened technology and product lifecycles and even the complete restructuring of industries (Bettis and Hitt, 1995; Katz, 1996). Management research on convergence has only gained momentum in the past two decades, for which reason the body of literature is rather scarce. Moreover, most researchers have merely focused on one particular convergence context, namely the convergence of the information technology, consumer electronics and telecommunication (ICT) industries, representing the most intensively researched setting of industry convergence (Katz, 1996; Wirtz, 2001). However, the food industry is also affected by these developments, which have numerous implications for various stakeholders. Particularly the convergence of the agrifood industry with the pharmaceutical industry (Broring, 2005; Curran, 2013, Weenen et al., 2013) as well as with the chemical industry (Preschitschek et al., 2010, 2011) has been investigated. The blurring of boundaries between the agrifood and pharmaceutical industry has brought about the emergence of the new inter-industry segment of functional food, i.e., food products providing also an additional health benefit. That of the agrifood and chemical sector has led to new products derived from renewable resources such as biopolymers, i.e., plastic products not produced from crude oil but from renewable resources like starch. Contrary to its practical as well as theoretical relevance, the implications of industry convergence for different stakeholders have hardly been addressed – a research gap that this chapter seeks to explore. Following the seminal work of Freeman (1984) and Freeman et al. (2004) different groups of stakeholders have different value perceptions and share different values. However, in a context of convergence, these existing values as well as the perception thereof might be challenged as novel systems of value creation and novel value chains as such emerge (Broring and Cloutier, 2008).