Analysis of innovation and value in milk industry

Recently, consumers? expectations regarding the food they consume have been changing due to their changing life styles, to how they value their health and the environment and to their rising income levels. In order to adjust to the changing expectations, factors that contribute to the value of product in the whole value chain and innovative activities that may influence the value have to be understood. In this study, we aim to assess the innovative activities in the consumption and production stages of Turkish liquid milk industry and to find the relative significance of factors that affect producers? and consumers? approach to innovation.During the study, a field survey was carried out in İzmir province and the data obtained in this field was used in econometric analyses. According to findings of the field survey, most of the consumers were found to give more value to health related factors such as milk quality assurance mark and organic production rather than to more radical innovative activities during the process. Findings of the econometric analyses provide the information that as the frequency of milk consumption and weekly milk expenditures rise and if the milk they consume is produced domestically then consumers are willing to pay more to innovative activities compared to market price of milk. On the other hand, as consumers get older they attach less value to innovation. Similarly, consumers who are more sensitive to sales price of milk, who consume various milk types and products and who give more attention to the packaging material of milk attribute less value to innovative activities. In general, innovative activities were found to add 10 percent additional value to the sales price of liquid milk. In the producers front, producers who are happy with the economic outcomes of their productive activities and investment decisions and who produce in relatively larger scales were found to have a more positive approach towards innovation. On the contrary, small scale producers, less educated ones and producers who consider low prices as the main problem of the sector do not attach much value to innovative activities which yield a rise in production costs.