Food industry works towards making themselves sustainable

Few of us give any thought to where our food comes from, how it is grown or raised, or how it gets from the farm sand fields to our tables. How many of us consider, to cite an instance, the amount of water it takes in drought-stricken California to grow lettuce and corn, the carbon emissions generated by flying grapes from Chile or Dover, or the far-reaching impacts of chemical fertilizers and pesticides? Market experts predict that globallyagriculture accounts for 70% of the total water consumption and the run-off from fertilizers and pesticides are one of the major reasons for its pollution. Besides this, agriculture alone is responsible for 75% of global deforestation and about 17% of total greenhouse gas emissions.

According to the food Industry in Europe, the food and beverage sector often faces major financial and operational risks and challenges, and the need for sustainable use of water and action on climate-change issues has become of grave importance. As global warming transforms the overall precipitation patters and alters the ecosystems worldwide, the food production industries have been forced to reckon with the unprecedented patterns and predictable shifts in grazing patterns, growing seasons and availability of water. Furthermore, the food and beverage industry also faces other vulnerabilities, especially as human and labor risks abound mostly when they are dependent on low-cost labor in both direct operations specially supply chain.

Ensuring survival of the food industry

To be successful in these dire conditions of waning resources and global warming, the companies in the food and beverage sector need to embrace sustaining measures as their core corporate value and shape their long-term strategic business decisions accordingly. Implementing sustainability principles is not just a matter of corporate social and environmental responsibility, but also a survival strategy in the changing world. To cite an instance, Europe market research reports found that companies have already started understanding this and are working towards attaining sustainability in their business strategies. However, far too many are still at the starting point.

The second encouraging sign revealed by various food and beverage industry research reports is that a large number of companies have started engaging stakeholders for various environmental, governance and social issues. Three quarters are making an effort towards ESG, which is a marked improvement since 2012. The food and beverage sector is also demonstrating leadership in efforts to reduce its carbon footprint. However, research revealed that currently only 25% companies are using renewable energy sources as a method to reduce their GHG targets.

Despite all these steps, the sector is currently falling short in one critical area: sustainable sourcing of ingredients in its supply chain. Climate change and water have already had profound effects on the agriculture sector, and labor rights issues are among prominent factors that need faster action. To get benefits, the companies should:

Build a robust risk assessment process: It is imperative for the companies to set measurable and time-bound goals to source key agricultural inputs, and outline timelines and targets accordingly.

Improve public disclosure about sourcing in agriculture: When companies publicly disclose information about their performance, they tend to improve revenues.

Establish clear programs and incentives: For farmers and agricultural producers, it has become important to implement sustainable practices at the field level and thereby, measure their improvement.

As per a food and beverage industry research report, implementing these would definitely ensure progress. General Mills already has sustainable sourcing commitments for its 10 priority ingredients and has an outlined a four-step sustainable sourcing model that lays out a path for achieving them. PepsiCo also through its Sustainable Farming Initiatives has set out a framework to measure the environmental and local economic impacts associated with agricultural supply chain and develop plans to improve performance through their key crops.