This year's edition of SIAL, the huge food industry exhibition, kicked off in Paris today (22 October), with warm sunshine over the French capital. However, the show is being held in the teeth of the worst economic conditions for decades, with the eurozone crisis casting a shadow over the Continent.

Optimism often abounds at events like this; exhibitors are looking at new markets and pushing new products to retail buyers, exporters and importers. SIAL's organisers call innovation a "flagship value" of the event, which, they claim, sets it apart from other industry trade shows.

However, there is no question that trading conditions remain tough and the downturn has, to some industry watchers, hit innovation. Earlier this month, Heinz told the IGD industry conference in London there had been a 30% drop in products launched this year in the UK compared to two years ago. In this context, it will certainly be interesting to witness the innovation on display at this year's SIAL and, over the next five days, just-food will be finding out what exhibitors believe the outlook is for the industry.

Stay tuned to just-food for the latest from the event. And also check out the Twitter pages of the just-food team: @dean_best, @KatyAskew1, @MichelleRussel3 and @jamesj0rdan.

The difficult trading environment remained a key theme in our pages last week, when leading executives from the European food and drink sector spent two days in Brussels deliberating how the industry can grow in the face of economic volatility, pressure on resources, global competition and an increasingly less loyal and more cautious consumer. Added to the pot can be concern surrounding the economic slowdown in important emerging markets, including Brazil and China.

The Brussels conference was held by Europe-wide industry association FoodDrinkEurope. The two-day summit was entitled "Feeding the recovery", an optimistic-sounding moniker for a conference held against such a gloomy economic backdrop.

Given the challenge of eking out growth in Europe, the impact of regulation on the region's food and drink sector was a much discussed issue. The UK's Food and Drink Federation warned EU rules could lead manufacturers to shift their R&D investment outside the bloc. However, the European Commission defended key parts of its recent regulation, including rules on nutrition labelling and on the health claims food companies can put on their products. The legislation, the Commission claimed, benefits the industry.

The challenge of operating in Europe was at the front of investors' minds when Danone published its quarterly results last week. Earlier this year, the French food giant issued a profit warning as it battled the severe recession in Spain, a key market for the yoghurt maker. Last week, Danone said its third-quarter dairy sales slid more than 10% in both Spain and Italy in the third quarter, hitting its shares. And CFO Pierre- Andre Terisse warned the climate in Europe will "not be very different in 2013" to what it has been in 2012.

The slowdown in the Chinese economy has made global business headlines and when Nestle announced that its growth in Asia has slowed during the first nine months of the year, shares in the world's largest food group took a hit as a result. However, it remains important not to get too gloomy about the outlook for the market. Sure, growth in the last quarter was the slowest for three years and there have been signs consumers are less willing to buy premium or try new products.

However, food multinationals remain bullish on China. PepsiCo and Nestle both underlined their confidence in the long-term outlook for China last week. Nestle, for instance, plans to open two more R&D facilities in China to support recent investments it has made in local companies Yinlu and Hsu Fu Chi. China is a market with plenty of potential for companies in our industry.

Until next time...

Dean Best
Managing Editor
Web: http://www.just-food.com
Email: editor@just-food.com
Twitter: http://twitter.com/just_food