Relationship and Network Approach to Innovation and Capabilities Building in Small and Medium-Sized UK Organic Food and Drink Suppliers: A Literature Review

Both business and consumer markets of food and drink are increasingly changing, concomitant with changing consumer habits and lifestyles. Particularly in industrialised countries, there has been a tremendous growth in consumer interest for organic food in the last fifteen years, largely driven by the need for healthy food. These market changes have implications for the way firms in the food and drink industry conduct their business. Nevertheless, unlike large firms, small suppliers tend to be constrained in terms of innovations and capabilities, for instance to enable them keep pace with market changes. Based on the literature review, this paper develops a framework that suggests that, market-driven innovations may be developed and implemented through augmentation of small and medium-sized suppliers’ (SMEs) own capabilities with those of their larger customers. This consequently would enable SMEs to keep pace with market changes and hence sustain their survival.