The joint chapter analyses the role and characteristics of "conventional" SMEs in the food and drink sector and their obstacles to engage in research and innovation (R&I), and suggests potential approaches to overcome R&I hurdles and a number of targeted actions for food and drink SMEs.

About 99.1% of all food companies are small or medium sized enterprises (SMEs). Roughly 78% of them are being categorized as “Micro-SMEs”, meaning that they employ on average less than 3 people. Due to the extremely large number of food and drink SMEs in Europe (about 285.000), they employ in total as many as 2.8 Mio. workers
which makes them one of the largest employers in the European manufacturing sector. Food and drink SMEs are therefore of great economic importance and due to their diversity have a large potential to develop and test novel solutions that could benefit many European citizens. 

A consequence of the very small company size is that they largely operate in local and regional markets, i.e. they often do not have a national or Europe-wide presence. Unlike other manufacturing sectors (e.g. ICT) they often do not have personnel that has a strong scientific background and, in many instances, they can only operate effectively in their national language. This relfects in their ability and willingsness to conduct risky innovation activities, there are some exceptions though. It means that in essence, much of the creative potential in the sector is currently not realized, and special actions tailored to food and drink SMEs’ needs are therefore urgently needed to improve the situation.

To achieve a real change in the food system, especially the innovation capacity of the ‘conventional’ SME food businesses must therefore be enhanced, since they represent a significant part of the food supply system providing European consumers with food solutions.

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