// . //  Insights //  How To Make Food Sustainable Along The Whole Value Chain

Much about today’s food industry is unrecognizable from 15 years ago. Vegan options are widespread. Shoppers use apps to evaluate the nutritional value of their basket. And plastic has been minimized — in many countries, as a step towards abolishing its single use.

We think this is just the start of a farm-to-fork food revolution that will make food more sustainable in numerous ways. In the future, food production will use less water, generate lower greenhouse gas emissions, and not need to travel so far. It will be healthier, less processed, and lower in calories. Value will be shared more equitably — especially with farmers — while animal welfare will be given greater respect.

The emerging ecosystem is a big departure from the industrialized farming developed from the 1950s. That has a heavy environmental footprint, and one-third of global food production is wasted. Much food is unhealthy too — heavily processed and poor in nutritional value, with large amounts of fat, salt, and sugar. It has become a risk factor in obesity and other conditions, and about 50% of mortality is linked to unbalanced diet according to the Global Burden Of Disease report.

A major driver of the recent changes is new demands from consumers. In most countries, between 50% to 80% say they are prepared to try to reduce their environmental impact: In France, 60% are prepared to reduce their meat consumption and 40% their dairy. Many people have already stopped buying mineral water, while more than 50% buy local and organic products regularly.

Some shoppers have become activist consumers (15-20 % are Climate Catalysts) who practice frugality, according to a global study by the Oliver Wyman Forum of 100,000 consumers. 

Of these, 50% shop less frequently; 75% favor seasonal products, and around 60% focus on organic and local products. Globally, such activists could make up 15% to 20% of the population in 2030, according to our study.

Exhibit 1: Future food consumptions habits of ‘Climate Catalysts’
You mentioned changing your habits because of climate change. Which of the following apply to you? (France)
Source: Oliver Wyman Forum Global Consumer Sentiment Survey 2021

How food companies can transform their industry for a sustainable future

To keep pace with this revolution, food companies need to involve all actors in the industry — from agriculture to government — and act in the three following areas.

Reduce the impact of existing activities 

Food production currently generates between 25% and 30% of global carbon emissions and uses 70% of water consumed. A first step for food companies is to decarbonize their existing operations, especially by lowering their energy use, including through a reduction in the distances they transport their products.

They can also work with farmers to reduce the amount of soil and water needed for growing.The next stage is to set scientific climate goals and define a sustainable path aligned with these. The path should be developed with partners and the community, and it should encompass the environment, health, and equitability. One way to finance the transition is through greater efficiency, for example by reducing input waste through precision agriculture.

Overhaul the value proposition

Consumers support greater sustainability in food but are often reluctant to spend more for it: More than half the population is waiting for more-affordable prices before they alter their choices. Even among activist consumers, just 30% are ready to pay a premium of over 5% for sustainable food. But food companies also need to pay greater attention to farmers, who currently receive little of the value in the industry and are in many cases struggling economically.

The challenge for food companies is therefore to organize their ecosystem in a socially responsible way. So far, such efforts have included products that are less processed and packaging that is reduced to the essential and made from 100% recycled and recyclable materials. Waste can be limited by adapting portions to sustainable consumption. Another step is to develop products through a design-to-values approach that finds a balance between sustainability, profitability, and benefits to consumers and farmers. In the future, alternative sources of protein — based on plants and even insects — have the potential to reduce carbon emissions and water use. Companies should also dare to disinvest from an activity if it is no longer compatible with their goals.

Exhibit 2: Environmental impact of the food industry
Share of food industry greenhouse gas emissions

Invest in new models

Food companies will achieve maximum impact by reinventing their relationships with partners. They can invest in the development of precision agriculture, raising the ratio of output to inputs, as well as in new business models such as aquaponics, a system that feeds nutrient-rich aquaculture water to plants grown hydroponically (in water).

Other contributions might come from the diversification of agriculture systems, by relocating growing activities, and from land management that promotes carbon sequestration in soil to mitigate carbon dioxide emissions.A growing number of apps have been launched to help reduce waste. BeneBono offers customers unusually shaped fruit and vegetables that are normally thrown away. Phenix and Too Good to Go aim to connect people and organizations to stores and restaurants with surplus food. Food companies can also work with lawmakers to change standards that lead to waste, such as arbitrary expiry dates and norms for vegetables’ size, shape, and color.

Industry-wide action is needed fast 

Sustainable food could represent up to 40% of volumes in about five years, and it will be especially successful if it remains affordable, carrying no price premium: Consumers appear to want sustainable food, but their purchasing decisions may not always match their declarations of intention. Achieving these goals needs the whole industry – agriculture, food production, and distribution – to work together. In previous industrial revolutions, the winners were the early adopters, and the same will apply to sustainable food. Currently, industry giants are trailing startups, so it is time to be proactive.

The author wishes to thank Laure Charpentier, Salome Heiob and Charlotte Aubernon for their contributions to this article.