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MBA Students Develop Taste For Innovation In Food And Drink Industries

Business students are hungry for a bite of the global food and drinks industries, and a number of business schools are catering to new appetites.

Mon Dec 15 2014

Nested on the cusp of small towns bordering the Adriatic Sea south of Bologna, northern Italy, is a business school trying to marry a centuries old industry with new innovation.

The ancient services of producing, marketing and selling food and drinks are ripe for an update with the disruptive influences of globalization and tech.

Students at Bologna Business School are raising a glass to the global drinks industry. One of a growing number of European institutions to offer specialist MBA degrees in consumables and agriculture management, its 12-month MBA Food and Wine program is catering for managers at the intersection of the tourism, consumer goods and luxury sectors.

Business students are hungry for a bite of the global food and drinks industries. Since the financial crisis, managers are increasingly moving into industries that adopt the newest innovations to drive growth and many are now developing an appetite for sectors that satisfy life’s more basic needs.

But there are many challenges that these industries most overcome. In the drinks sector this includes the fragmentation of the value chain, small company sizes which push managers to aggregate and collaborate with competitors, and globalization.

“The demand from foreign markets for Italian products increases every year but Italian companies still struggle to catch this opportunity,” says Ludovica Leone, co-director of the MBA Food and Wine program at Bologna.

Now in its fourth year, the course, which costs €27,000 in tuition, attracts both entrepreneurs and those who share a personal passion for the fermented grape.

In European countries like Italy wine is still one of the major drivers of exports and is seen as an affordable luxury among consumers.

Students recognise the importance of the industry to Italy’s GDP, according to Ludovica. “Food and wine represent local heritage and local roots,” she says. Increasingly, students are coming from Asia, South America, Africa and the US.

Schools like Bologna are expanding to deal with the increasing influx of students prompted by renewed interest in food and drink management.

Students are finding careers in companies such as SABMiller, the brewing and beverage giant, and Unilever, owner of a number of food and beverage products.

SDA Bocconi School of Management in Milan is also capitalizing on this demand with its master of management in food and beverage, catering to the hospitality and retail industries.

Supported by major consumer goods brands such as Barilla Group, the one-year program is taught in English and costs €28,000 in fees.

Most graduates opt for careers in marketing functions and this is one of the most important aspects of the course, according to Chiara Mauri, program director.

Like Bologna, it is able to draw on Italy’s history as a leading food and drink producer. “Food and beverage is one of the things which Italy is proud [of],” says Chiara. But she adds that there are few large companies in these sectors in Italy.

As such, internationalization is now a crucial learning area, she says. “Food and beverage is becoming a global business, and being able to play on a global scale… To develop and manage relationships with international suppliers and customers is key.”

Burgundy’s School of Wine & Spirits Business is the latest development in response to global demand. The French business school started an MSc in wine business in 2008 and an MSc in wine management in 2012, adding to its French-language masters in international wine and spirit trading.

The one-year wine management MSc, which costs €11,480, has attracted 44 students this year, according to Jérôme Gallo, head of the School of Wine & Spirits Business.

He puts increased interest down to attractiveness of the good stuff and enhanced job opportunities.

But with a growing global taste for wine comes new obstacles. One such difficulty is catering to so many different pallets. “The wine producers [need] to learn how they can push their products on the markets after centuries of simply responding the demand,” says Jérôme.

Much of this demand is coming from China, where production is rising. According to International Wine and Spirits Research, 2.2 billion bottles of wine were sold in China in 2013, making it the fifth-largest wine market by sales and the largest for red wine.

This trend is echoed by Inseec Business School, part of a French education group based in the cities of Paris, Bordeaux, Lyon and Chambéry. It plans to launch wine marketing programs taught in Mandarin at universities in Beijing and Shanghai.

The school’s 320 students are attracted to programs related to the sector – including an MBA in wine marketing and management, an MBA in spirits marketing and management, and a luxury brand management MBA with a focus on food and wine – because of the potential for international careers.

There are an estimated 3.5 million jobs in the wine and spirits industries globally, with some 600,000 in France alone.

“Potential careers are really open at the production – brands; distribution – on and off trade; and communication levels,” says Jean-François Ley, director of the Inseec Wine & Spirits Institute.

But it is not just courses in fine wines that business students are developing a taste for.

The UK’s Royal Agricultural University (RAU), which offers two specialist food industry MBAs, aims to grow from 1,200 students to more than 2,000 within five years.

The Gloucestershire based institute offers a full-time or part-time MBA in advanced farm management, a full-time MBA in international food and agribusiness, and a part-time MBA in business management in the food industries.

Between 10-15% of all jobs globally are in the agri-industries, estimated as being worth about $4 trillion, according to Kanes Rajah, dean of the School of Business and Entrepreneurship at RAU.

Students are finding jobs in sales, marketing and logistics, factory operations and production, as well as e-commerce, retail and business-to-business sales, he says.

Opportunities for innovation in agribusiness in particular are increasingly attractive to business students.

Technology is transforming farming and food production. Digital devices such as cloud computing, remote technologies, precision engineering and biotechnology have gained much ground.

Even for smaller companies it is increasingly necessary to grow operations to afford the tech needed to remain competitive and efficient, and to provide solutions to address food security.

“Farms are getting bigger. EU subsidies may not be available in about 14 years’ time. We will need much more educated farmers and rural entrepreneurs,” says Kanes.

San Francisco is renowned for its tech centre Silicon Valley but just north of the city, in the wineries of Napa Valley, Sonoma State University is also translating a global thirst for wine into business education opportunities. Building upon its existing wine executive MBA program, the school plans to both to run a new executive MBA program and expand its wine industry research operation.

Like Sonoma, the growth of new consuming and producing regions has given rise to opportunities for Adelaide Business School in Australia. Its master of wine business program draws 50 students from a mix of nations.

Graduates are finding jobs in many aspects of the grape and wine industry, and in wine tourism or even hotel and research tourism, according to Dr Roberta Crouch, program director.

“Many people realise that industries – especially service industries – [that are] aligned with tourism and entertainment are going to be experiencing strong growth in SA [South Australia] and Australia in the years to come,” she says.

Education in entrepreneurship and enterprise management are also rising in demand in these sectors.

Many wine producers run their own operations or come from family-owned businesses.

Ludovica at Bologna says that often people are motivated by a great personal interest – but lack the skills and competences needed to take ventures forward.

“There is a significant group of graduates that [have] decided to become entrepreneurs,” she says, particularly in the tourism sector.

““They need to think… [About] the global development of their business, but at the same time preserve the sustainability of local production,” she adds.

For Bologna, this is potentially the next big growth area in the global drinks industry.

“Professionals should bring a major entrepreneurial commitment – even when they work as managers,” says Ludovica.