It’s no news that consumers are requiring transparency from the companies they buy from – not least in the food and beverage (F&B) industry. As consumers become more educated about the state of food production, from raw materials to landing on store shelves, efforts to hold companies accountable and counteract the negative impact on planet and people are becoming all the more mainstream.
For example, the number of vegans in the UK has quadrupled in the last five years as a result of news surfacing about animal cruelty and the environmental impact of the meat industry. Which areas of food production do consumers keep top-of-mind when deciding what to buy? We’ve mapped out three main focal points on everyone’s lips and what it takes to become a more sustainable F&B company throughout the entire supply chain.
Raw materials
After scandals regarding falsely marketed meat to pesticides, hormones, and antibiotics, consumers are skeptical regarding the quality of conventional foods. Thus, consumers are becoming more aware and concerned about what they’re putting into their bodies and how it affects their health. At the same time, according to Cambridge, the environmental and social impact of the food industry motivates organic food purchases even more than personal health or quality considerations. Consumers want to know where their raw materials are coming from and the working conditions of the people who harvest them.
A prime example of this is Tony’s Chocolonely, a Dutch confectionary company committed to eliminating slavery from the cocoa industry and selling fair trade chocolate. They’ve experienced a steady increase in sales – in 2015, 8.8% of chocolate bars sold in supermarkets in the Netherlands were Tony's Chocolonely’s bars. In 2019, this number increased to just under 19%, almost one in every five.
According to Food Business News, organic food sales in the United States rose 5.9% in 2018 (reaching $47.9 billion) and the organic market grew by 6.3%, hitting $52.5 billion. Sustainable actors that consider how ethically raw material is sourced and the full lifecycle of products will better meet the demands of their customers and will grow because of this.
Packaging
Another aspect that consumers prioritize when buying food and beverages is the sustainability of its packaging – not only where it goes after it has been consumed, but the impact of its production. Right now, containers and packaging make up approximately 23% of landfill waste in the U.S. Sustainable restaurants are also moving away from single-use plastics because of their negative impact on the planet, especially Life Below Water (SDG 14), and adopting paper packaging or selling foods and drinks without packaging. Now, zero-waste grocery food stores like U.K.-based The Clean Kilo are revolting by removing all unnecessary packaging from their stores and climate-conscious consumers sign on to bringing their own reusable containers to refill staples, from oils to coffee to spices. Larger grocery stores are also trying to make small but effective changes by reducing the amount of waste by skipping on wrapping fruits and vegetables in unnecessary plastic packaging. Not only is this environmentally friendly but saves companies large sums of money and resources otherwise spent on producing and using packaging.
Oatly, a Swedish based vegan food brand, understands that helping consumers make climate-smart decisions requires transparency throughout the supply chain for every aspect of its products, including packaging. All of their packaging is made from 71%-82% renewable resources and are 100% recyclable. The most convincing part of Oatly’s efforts is its transparency when it comes to areas that need work; the company is open about the fact that the caps on their cartons and the aluminum foil inside of them are not made from renewable resources, but are working towards 100% renewability. Knowing and disclosing exactly what parts need to be improved boosts consumer trust, dependability, and loyalty – a long-term recipe for success.
Transportation
The production and transportation of food accounts for high volumes of water use and CO2 emissions. It is widely known that beef and other animal meat production is, by far, the largest contributor to greenhouse gas emissions in the F&B industry. However, even vegan-friendly options can be doing more harm for the planet than admitted. Avocados, for example, require huge amounts of water – up to 209 liters every day in summer – and puts huge climate pressure on the regions they grow in – California, Chile, Mexico, and Spain. Many countries import this fruit, which is rich in nutrients needed in a vegan diet, a lifestyle of choice on the rise. The transportation of these kinds of exotic fruits causes a hefty carbon footprint.
Though transportation accounts for a share of CO2 emissions of a product’s total impact, it is much less a contributor to total greenhouse emissions than meat food produced – it is estimated that for most foods, transportation accounts for less than 10% of greenhouse gas emissions. However, its effect should not be overlooked. The extent to which food transportation contributes to greenhouse gas emissions depends on what kind of transport is used. Though the majority of food products aren’t flown by air, those are emit 50 times more CO2 than by boat (per tonne kilometer). These products are highly perishable and need to be sold soon after they’ve been harvested – fruits and vegetables such as green beans and berries are flown around the world. However, consumers are left in the dark when it comes to how foods are transported, which makes it difficult to make sustainable choices.
Right now, it’s still a guessing game – doing the math between the short shelf-life and how far away the country of origin is. Companies in the food and restaurant industry that know how their food is being transported and are transparent with this information are more likely to win over conscious consumers. Disclosure is better than leaving consumers in the dust.
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What it takes to become a sustainable company in the food and beverage industry
How else can food and beverage companies work towards the new standard set by consumers on their goods and services? The answer lies in supply chain traceability – the more food and beverage companies know about their supply chains, the more transparent they can be with consumers and the more likely consumers will buy their products. Informing the consumer on all ingredients, fair trade information, what substances it does/does not contain, the origin of raw material and place of production, and transport method helps consumers feel in control of their impact and in so doing, make more informed decisions.
In order to be able to do so, companies need to map out its products’ value chains – from where raw materials are sourced, to packaging and transportation. According to UN Global Impact, embedding sustainability criteria in procurement processes is crucial in order to reduce climate impact within the F&B industry. Moreover, measuring, reporting, and following up on the goals and standards from suppliers on all tiers creates accountability and enhances climate resilience throughout the entire supply chain. This includes finding alternatives to palm oil, reducing chemical byproducts, and using renewable energy.
Improving multi-tier supply chain traceability through the network is effective and creates a more transparent and sustainable world. This will transform the F&B industry and bring products to the market fit for a growing population demanding clean food – Millennials and Generation Z.
Learn more about how to transform your supply chain sustainability with our on-demand webinar on multi-tier transparency and traceability.
Related blog posts you might like:
- An Introduction to Sustainable Sourcing: Risks, Focus Areas, and Three Stages of Supplier Assessment
- Why Sustainable Risk Assessment is Crucial for Enterprises to Thrive
- 5 Tips for Boosting Supply Chain Sustainability
