Food supply chain continues to change rapidly, producers have to adapt
If we’re to make significant steps towards true food sustainability, there are still key challenges we need to address. And other industries have shown us just how counterintuitive some of the necessary steps are.
For instance, take Patagonia’s “Don’t Buy This Jacket” campaign, which just had its 10th anniversary. Legendary in fashion and marketing circles, it promoted sustainability by discouraging potential customers from buying their product in a full-page ad in the Black Friday edition of the New York Times.
Most of us would probably get fired over such a crazy idea, for telling our bosses to sell less, make less, do less of pretty much anything — and it probably wouldn’t work. It didn’t work, in fact, as this ad drove Patagonia sales up 30%.
I think this story illustrates the dilemma we’re facing with sustainability: our desire to live on a better planet and our ability to sustain a life that depends on economic activities and income. So we need to find a way to make more with fewer resources.
Growing technologies offer sustainability
If you rent a car at San Diego airport and drive straight east on I-8 toward Phoenix, you leave the urban areas behind you after about 40 miles. You cross a mountain range and drop down to the desert floor near El Centro, which sits below sea level. This is one of the winter growing regions where a lot of leafy greens are grown, or rather were grown.
If you’ve driven along this stretch of freeway, you would’ve noticed that a lot of the farmland now features solar panels instead of salad. The Colorado River in Yuma, Arizona, is now more of a creek. Water is very expensive and growing lettuce is not as economically viable as generating electricity for Teslas.
Enter vertical farming, a new methodology that uses very precise amounts of water in growing houses that can be located in the urban and suburban areas of the cities we live in. As well as reduced water consumption, these farms use fewer fertilizers, less land and less transportation to reach the end consumer. The downside is that they might need more electrical energy, depending upon the local climate.
This type of farming will, no doubt, have huge impacts on sourcing. Retailers who used to deal with a few vendors and growing regions will be faced with a more complex supply chain for each of their commodities, each of which could have a unique set of claims and attributes attached to them.
Emerging growing technologies are not limited to fruits and vegetables. Heralding in the Silicon Valley kitchens of the future, companies like Upside Foods are racing to market with real meat grown in a sterile environment from stem cells, using a nutrient solution from plants. In the Netherlands, they’re known as Mosa Meat and raised some eyebrows when they introduced their proof of concept burger at €250,000 apiece (approximately $283,000), but costs have come down quite a bit since then. Price parity with beef is on the horizon, particularly with increasing commodity prices in the red meat sector.
This is real meat, grown much faster, using less energy, with no CO2 or methane emissions, and possibilities to grow to spec. But creating meat like this, in a sterile environment, will change our supply chains, our storage and handling methods. It also opens up a whole new world of processing capabilities, with a huge reduction in health risks and recalls: steak tartare, anyone?
Creating sustainability in supply chains
While we make our food with fewer resources and can grow more of it, we still need to pack and ship the products to their destination. Europe’s retailers have already eliminated a lot of cardboard boxes from their supply chain and have introduced standardized tote systems, which are used across many industries. There are also specialized standards set by the European Retail Institute (EHI) across retail chains in baked goods and meat.
Reusable packaging is certainly the way to go: studies have proven that totes are cheaper after around six loops through the supply chain. This works well within Europe, where the food supply chains are short. Longer supply chains, such as those in North America and Asia, require a lot of one-way packaging.
The worst kind of packaging uses material like styrofoam, which is made from oil and is absolutely not recyclable. You’ll see a lot of that disappearing from the packaging you open this holiday season.
A key development will be the emergence of biodegradable packaging using biopolymers. The sutures you get during surgery, which naturally decompose in your body, are made from these. Rapid advances in structural biology are driving down the costs and creating materials that we can grow. They behave a lot like trees sequestering carbon, as we make them and then they decompose. This is true circular packaging.
How tech can crunch costs
Patagonia’s call to inaction could work. I have jackets and sweaters that are 10 years old and are still firm favorites. I can spend more on a piece of apparel and justify that decision by wearing it longer. The problem is that more expensive food does not nourish me for longer; quite often, the opposite is the case.
If you look at income distribution in the U.S., you’ll soon realize that a majority of the population makes food purchase decisions solely on cost, because they can’t or don’t want to spend more on food than they have to. The cost of a Beyond Burger, based on its ingredients, should be cheaper than real beef, but it’s not.
All these incoming ingredients arrive in the R&D kitchens of our large food brands, private label manufacturers and restaurant chains at an accelerated pace. PLM solutions like Centric Software, formulation software like Genesys and other solutions allow organizations to bring products to market that meet the price point of a wider audience. These systems enable collaboration with regulatory stakeholders, to address legislative requirements and the resistance of incumbent industries.
Consumers will change and adapt to new foods. Retailers need to quickly detect these changing trends and may gain an advantage through early development of a private brand based on a new way to feed the world.
In the book “The Day the World Stops Shopping”, J.B. McKinnon makes the case that, individually, we can do more for the planet by following Patagonia’s advice. Unfortunately, we cannot stop shopping for food. We can only optimize the way we make it, resulting in a more sustainable way of life.
— Patrick Pilz is a food and beverage presale consultant at Centric Software.