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In many parts of the world, there is a lot of talk about how producing more added value is the eay of the future. I was recently in South Korea, and how to create higher-value food products was on of the discussion topics. Here, in Canada, there is a newly launched program, “Let’s Grow, Canada!”, which is about making several billions of dollars to help growing production and mostly of finding ways of adding more value. The EU is also trying to push food production in that direction. Africa is also pondering about how to shift from a basic commodity producer to producing added-value products made on the continent. Basically, everyone is talking about it.

The longing to adding value to food production is not new. I have heard this my entire professional life. In some cases, policymakers try to develop incentives and offer substantial amounts of money to achieve this objective. Often, added value seems to have become synonym of innovation. It is true to some extent, but innovation alone is not enough, and it would be wise to not throw money in the wrong places. As I explained in a previous post, (261. Boosting the Adoption of Innovation), innovation must solve problems and actually add value, which is far from being always the case.

In most projects aimed at producing added value, I miss one major element in the conversation. It is as if the market would naturally buy into added value. One comment I have heard many times from producers is whether they produce added value or added costs. Often, they are not so sure of the correct answer. This is a very valid question, and making added value profitable is not a given. One cause for approaching value in the wrong way lies in the very nature of food and agriculture. It is first of all a technical activity and most producers still approach it in a production-driven manner. Even many of those who claim to be market-driven are actually still production-driven, but with a little twist: they are marketing-driven. Unfortunately, that is not the same as market-driven.

By focusing on technical aspects of production, food and agriculture looks primarily at the cost aspect. The main purpose is to find ways of lowering costs all the time. Understand me well, this is essential indeed, but it is only half the equation. The other half, beyond just revenue, is at least as important: the profit margin. To me, a sales department is not about moving volume, it is about generating margin. The role of sales is to pull the entire business on the path of better profitability. We all know that margin discussions can be a source of tension between sales and production. If the two departments look at their respective primary activities, it is only logical. Sales want to move product and keep customers happy, and production wants to keep costs low. By initiating change, the numbers change and both sides try first to stick to their priorities. Truly adding value requires a different mindset. It is about the overall business performance. As I have often said, it is like a ballgame. It does not matter so much who scores the goals. What matters is that the team wins. To add value, it is necessary to start with a solid understanding of market opportunities and determine indeed if the added costs are going to be more than compensated by a higher margin. That is what market-driven is about: finding the right customers that generate higher margin. Producers who are marketing-driven often fail because they try to make a basic product look like some sort of specialty by adding some marketing gimmick. Such an approach usually is short-lived and often, the margin is not there.

Value is tricky, and so is product pricing. Producers, being focused on production costs have a very rational and objective approach. They calculate the cost and then add what they need to determine the price that they want and need. Opposite to that, the consumer market follows very different rules. First of all, consumers’ purchasing decisions are often subjective. Food is loaded with emotions and consumers’ decisions are not rational. Despite not being rational, they follow a remarkably strong logic, which in most cases is an entirely different logic than the producer’s one. For consumers, the value of food lies in many areas. You name it! It can be nutritional value, but it can be quality, flavor, packaging, convenience reputation. It can be what the children like or not. Value from a consumer’s point of view is not only subjective, it is relative, too. That is where the price plays a role. If the perceived value is higher than the price, people buy the product. If it is lower, they don’t. Consumers will switch their shopping from one product to another. The bargain this week is different than last week. Competition is an essential part of that game. Which one is the savviest? Is the market for added-value over or undersupplied? Are the added costs -and therefore the “added” price- good value for money? Does everyone rushes in the same niche and commoditizes it?

This is why endless discussions about whether price matters or not are futile. Yes, price matters. Always. Even if you think that you have the best product in the world. Producers determine the price they ask, and consumers determine the value they accept to pay. Sales results will depend greatly on whether your product matches the value they think it has.

Market knowledge is where adding value starts, and that changes the rhetoric down the road.

More on The Value Conundrum with Part 2: Who gets a share of agrifood value?

Copyright 2026 – Christophe Pelletier – The Food Futurist – The Happy Future Group Consulting Ltd.