Economic viability of technological innovations in functional spreads: a cost-benefit analysis of plant fat additives

Abstract

The burgeoning interest in functional foods has significantly influenced various sectors, most notably the food industry. The transition from traditional spreads to functional spreads fortified with plant-based fat additives signifies an essential progression in this realm. While these innovations offer substantial health benefits, they also pose economic implications that have yet to be fully analyzed. Therefore, this research focuses on the economic viability of incorporating technological innovations in functional spreads, using Kazakhstan as a case study for the application of plant fat additives. By employing cost-benefit analysis (CBA) from 2015 to 2022 coupled with a sensitivity analysis, the study critically assesses the economic ramifications of this technological shift. The research employs a mixed-methods approach, amalgamating qualitative interviews with industry stakeholders and a quantitative assessment of production costs, market prices, and expected returns. Further, mathematical models and statistical tools, such as regression analyses and Monte Carlo simulations, are applied to offer a comprehensive understanding. The study demonstrates that the introduction of plant fat additives into functional spreads can be economically viable under specific market conditions. It also identifies potential externalities and subsidies that could influence economic outcomes. Importantly, the research uncovers that, despite initial high costs, the long-term benefits, both monetary and societal, tend to outweigh the economic constraints. The paper concludes with policy recommendations that aim to create a conducive environment for fostering innovation while maintaining economic sustainability. This research fills a significant gap in the current literature by providing a multi-dimensional view of the economic factors influencing the adoption of technological innovations in functional spreads, thereby serving as a cornerstone for future research and policy implications.