Four Trends for Optimism on World Food Day
Feeding the world is a mounting challenge for our food system, as climate change impacts collide with burgeoning population growth. And more mouths to feed means demand is rising globally for resource-intensive meat, just as water scarcity and challenges such as deforestation accelerate. But today on World Food Day, I see exciting trends that give me hope. The food sector is beginning to step up. More and more food companies are doing their part to tackle urgent sustainability challenges, while also ensuring our long-term global food security. They – and their shareholders – see both the business imperative and competitive advantage for acting.
1. Cutting Greenhouse Gas Emissions in Agricultural Supply Chains
Agriculture produces about a quarter of the world’s greenhouse gas emissions. Fertilizer production, energy use on farms, land clearing for grazing or crops, and methane release from livestock and rice fields all contribute to that big footprint. Food companies have a key role to play at mitigating those impacts, where a sizable chunk of their GHG emissions are produced.
Increasingly they are. Food giants like Mars, General Mills, Kellogg, Unilever and Smithfield are setting robust science-based targets to reduce their agricultural supply chain emissions through such strategies as eliminating deforestation practices by suppliers, fertilizer optimization, manure management, methane gas capture and deployment of renewable energies. At the retail end of the supply chain, big players like Walmart are also setting GHG goals, and that’s a key driver for the food companies that supply them to get their own houses in order.
- Mars pledged to spend $1 billion on an expansion of its sustainability goals, including cutting greenhouse gas emissions across its supply chain by 67 percent by 2050.
- General Mills pledged to cut absolute GHGs by 28% by 2025 “across the entire value chain.” By 2050 it will slash emissions up to 72%, “in line with scientific consensus.”
- Kellogg’s 2050 target is to cut its own and supplier emissions by 65% and 50% respectively.
- Smithfield’s plans to cut its value chain-wide greenhouse gas emissions 25 percent over the next eight years.
Their actions are coming none too soon as rising global temperatures are beginning to impact our food supply, with one of the most significant impacts to our water system.
2. Sustainable Sourcing and Traceability Grow Hand in Hand
Global food companies are setting time-bound, measurable goals to sustainably source their major commodities, such as wheat, corn, soy and palm oil. Ceres’ benchmarking analysis of 42 food and beverage companies, Feeding Ourselves Thirsty, found that more than half had set goals to source at least two of their major agricultural inputs more sustainably. Even better, six of these companies—Coca Cola, General Mills, Kellogg Company, Nestlé, PepsiCo and Unilever—have set sustainable sourcing goals for a majority of their major agricultural inputs.
On a parallel track, commodity supply chains are becoming more traceable—which is an essential ingredient for sustainable sourcing. Supply chain complexity and a lack of data at the farm level can make it difficult for global food companies to ensure that their ingredients are being sourced without environmental or social harm.
New tools are emerging, however, to help food companies and their investors gain greater transparency into supply chains. Trase, for example, is an open-access online platform that maps agricultural commodity flows at scale. Trase maps soy and cattle exports from South America and Indonesian palm oil down to the level of producer municipalities and departments. Similarly, University of Minnesota scientists have developed a tool that identifies which U.S. counties use the most water and fertilizer to grow corn, and tracks where that corn ends up, whether in a cow, a corn dog or ethanol in a car.
3. Food companies are helping their growers produce more sustainably
Since Ceres first benchmarked food and beverage companies on water risk management in 2015, the number providing some form of direct agronomic support to growers on sustainable farm practices has doubled to more than 70 percent. Perhaps more significantly, twice as many are providing some form of financial incentives to growers to improve farm practices, such as by shifting to more efficient irrigation systems. These efforts are typically targeted and small, yet nonetheless they are a sign of progress.
Unilever is a leading example. It partners with farmers on complex sustainable agriculture projects they might not be able to tackle alone. Its soup brand Knorr, for instance, will invest 50 percent of any agreed project budget to enable growers to try out new ideas and speed up the implementation of sustainable agricultural practices. Each year, the company co-invests one million Euros with its suppliers and farmers in training and equipment to accelerate the adoption of sustainable practices.
4. Meat companies are turning to non-meat alternatives
Meat, and beef in particular, is heavily resource-intensive, requiring more land and water, and generating more emissions per unit of protein than any other food. In addition, as consumer demand for protein is shifting away from meat in some markets, investors are taking notice, and meat companies are starting to respond.
Last year, Cargill sold off its feed lots in the U.S., stating that it wanted to reinvest the money in other sources of protein, like plant-based, fish, and insects as well as other opportunities linked to livestock and poultry. This year it’s making good on that promise with a recent announcement that it was investing in an alternative meat startup, Memphis Meats, which grows meat in tanks by feeding oxygen, sugar, and other nutrients to living animal cells.
Cargill is not the first meat company to enter this brave new world. Tyson Foods has taken a five percent ownership stake in Beyond Meat, which produces meat and cheese substitutes from vegetable proteins.
Even non-meat food companies are getting into the vegetable-based protein trend through their venture capital. General Mills investment arm partnered with private equity firm 2X Consumer Products Growth Partners to invest in vegan company, D’s Naturals.
Our food system faces urgent and daunting challenges, but these trends show that food companies are beginning to take meaningful measures to reduce their impacts.
Ceres will continue to drive change in the food industry through our Investor Initiative for Sustainable Forests, our research efforts, including the online resource Engage the Chain, our stakeholder engagements and the AgWater Challenge.