Climate change, shifting food trends and Brexit are putting the food supply chain under immense pressure. How can retailers keep Britain well fed?
The idea of eating insects may bring images of I’m A Celebrity contestants turning green as they down witchetty grubs, but the appetite for bugs is being tested by mainstream food retailers such as Sainsbury’s, which is to offer bags of roasted crickets for £1.50 in 250 branches.
The venture is not just a bid to tempt increasingly adventurous palates to store, but a move to ensure the sustainability of food supply, which is becoming an ever-increasing concern.
Shami Radia, co-founder of Sainsbury’s insect supplier Eat Grub, maintained that as well as being “seriously tasty”, insects have “very strong sustainability and environmental credentials”.
They use less land, feed and water than other sources of protein such as beef or pork, it is claimed.
It is the latest instance of how concerns about the future of food, and how to keep it on consumers’ plates, is changing retail.
Worries go beyond meat. Global supply of vegetables may plummet by more than a third by 2050 unless there is rapid action on climate change, a study published earlier this year by the London School of Hygiene and Tropical Medicine found.
Meanwhile, the United Nations’ Food and Agriculture Organization has forecast that the global population will reach more than 9 billion people by 2050 and 70% more food must be produced to feed them all.
The Brexit factor
While worries about climate change and its impact on food security have been ongoing for many years – it is more than a decade, for instance, since Marks & Spencer launched its pioneering Plan A programme – the sustainability of the food supply chain has been thrown into relief by other more immediate factors, notably Brexit.
The chaotic progress of the UK’s departure from the EU has shined a light on the fragility of the food supply chain.
Fears have been voiced about food ‘rotting at the ports’ as the just-in-time supply chain grinds to a halt, and the cloud of food price hikes darkens the horizon.
“Brexit amplifies a lot of the concerns we already have about the supply chain. It’s a clarion call to look at the supply chain and what the future may bring”
Cathryn Higgs, Co-op
However, Brexit turbulence has also focused minds among grocers on the bigger food security picture.
“It amplifies a lot of the concerns we already have about the supply chain. It’s a clarion call to look at the supply chain and what the future may bring,” says Co-op head of food policy Cathryn Higgs.
One thing that grocers have done is look at their UK supply base. Morrisons is among them.
Morrisons commissioned a report on UK food last year, which found that the food supply chain is under pressure. It said: “Over all future timescales, from short to long term, there are challenges facing food systems.
“The growing human population and the rapidly growing middle class create increasing demands for the production of food.”
Among the initiatives that Morrisons is taking is greater support for UK food production.
The report found that the UK imports more than it exports in all types of food. The EU supplies approximately a third of British food and UK farmers supply just over half – 52% – of the country’s requirements.
Only 23% of the UK’s fruit and veg requirements come from this country, although 80% of staples such as eggs, meat and dairy are produced here.
Morrisons upped its efforts to foster UK suppliers and in its last financial year brought on board 200 more local growers, farmers and fishermen that supply local products.
There is demand from shoppers too for more local produce. A recent Walnut Unlimited poll for Retail Week showed that consumers are “significantly more likely” to buy British produce than they were two years ago, as Brexit uncertainty casts a pall.
Crops in shops and synthetic meat
Brexit has brought an additional food supply headache. Many overseas supply chain staff are leaving or considering leaving Britain, whether agricultural workers or pickers in retail warehouses from where groceries are shipped to stores or shoppers’ homes.
That could accelerate a trend towards the adoption of technological solutions to solve supply chain problems, whether related to labour or sustainable supply.
It is not hard to envisage, says OC&C Strategy Consultants’ Michael Jary, a rush towards new tech.
Imagine, he says, an Amazon warehouse next to another in which food is not just distributed but produced.
In that warehouse, food may be grown in scientifically optimal conditions which might include hydroponic production – growing food without soil – leading to reduced food miles, less need for pesticides and robotic harvesting.
A variation on that theme is already evident. In Germany, for instance, ‘vertical farming’ start-up Infarm is creating indoor farms which can be established in shops. Retail giant Metro is one of the retailers experimenting with the idea.
Technology could also transform the meat industry as synthetic meats are developed.
According to an Adam Smith Institute report, “meat demands on land are intensive, with beef taking a whole hectare to feed one person against 19 people fed per hectare of rice produced”. However, it says, the “cost of a lab-grown burger has dropped from £250,000 to around £8 per burger in the past five years”, and “lab-grown meat can cut greenhouse emissions by 78% to 96% and use 99% less land”.
The Adam Smith Institute admits that ”commercially competitive prices are still some way off”, but prices are likely to follow the downward trajectory.
While he can envisage Amazon agricultural warehouses, Jary thinks “petri-dish meat is probably a bit further off”.
Such technological shifts could, however, lead to turmoil in Britain’s rural and farming communities.
And while it might provide an answer to certain problems, it would not lead to a complete solution to the bigger global problems such as climate change, which is already causing local food production issues due to changing weather conditions, water availability or soil erosion.
Such challenges are not just on the horizon, but present today. Even in the UK, where last summer’s heatwave prompted concern about shortages of lettuce, carrots and cauliflower amid drought conditions, extreme weather can have an impact as it does elsewhere in the world.
“Transparency on food means trust from customers. As things are quite fluid, we’re able to say we know where it comes from, it meets our standards”
Mike Barry, Marks & Spencer
At home and abroad, says Marks & Spencer director of Plan A and sustainable business Mike Barry, some of the answers are the same – and that includes the need for long-term investment and relationships with suppliers.
He cites the example of a farmer in East Anglia who, because of his longstanding relationship with M&S, had been confident enough to invest in water conservation measures so, when last summer’s hot weather hit, was relatively unaffected. The same applies internationally.
“There’s inherent strength in our relationships with farmers,” he says. “We’ve been able to take some long-term views and we can walk into a difficult situation with good results.”
Those relationships will also come into their own as consumers seek reassurance about the provenance of food.
Barry says: “Transparency on food means trust from customers. As things are quite fluid, we’re able to say we know where it comes from, it meets our standards.”
Internationally action is being taken by food groups more broadly in recognition of the need to protect future supply.
Take two examples: cocoa and coffee. Neither may be vital to survival, but both are staples of shoppers’ diets and provide many workers around the globe with livelihoods.
But Jary, until recently chair of the Fairtrade Foundation, says cocoa farmers have been getting increasingly elderly – mainly over 50, which is ‘old’ in developing countries. Their children were becoming increasingly reluctant to follow in their parents’ footsteps in what could be a hard way to make a living.
“Michael Jary points to initiatives such as Mondelez’s Cocoa Life, originally launched in 2012 to create ‘thriving cocoa farming communities’”
In the past, farmers had often found it tough because of price-driven transactional relationships with FMCG companies and therefore retailers.
And coffee farmers, facing the impact of climate change, have increasingly been moving to higher altitudes to produce their crops. That has led to environmental impacts such as deforestation and environmental degradation, threatening the long-term supply of coffee.
FMCG brands have been acting in response. Jary points to initiatives such as Mondelez’s Cocoa Life, originally launched in 2012 to create “thriving cocoa farming communities”.
That included investment in women and combating climate change by lessening the carbon footprint and taking measures to reduce deforestation in the supply chain by, for instance, identifying regions at risk, training farmers on the best agricultural practices and providing financial support.
Consumption and collaboration
Against the background of planet-wide sustainability issues, there is also the impact to consider of rising income in countries such as China – as consumers become better off they increasingly adopt Western-style diets such as higher consumption of beef – and the effect on global supply.
During the 1960s, meat consumption in East Asia stood at just 8.7kg per person, the Adam Smith Institute found. Thirty years later, it was 37.7kg – an increase of more than 330%.
“What will happen when China gets a taste for avocados?”
“What will happen when China gets a taste for avocados?” asks one retailer.
In fact, that is already happening. Avocado shipments to China are expected to have doubled in the most recent year, US media organisation CNBC reported.
That could potentially increase the cost to consumers elsewhere as more of the millennial’s favourite food heads East.
As the world changes, so must retail.
Jary says traditionally there was an assumption in UK retail that food supply would outstrip demand – food prices deflated and that in turn drove volumes.
“I think the time to act is now. There have been a lot of big brains looking at food security for some time. Now we need to move from talk to more action”
Cathryn Higgs, Co-op
Now that is changing and a transactional approach is increasingly outmoded.
Barry says: “One of the reasons we launched Plan A is we recognised the global system was going to be disrupted.
“We wanted to put into place long-term strategies to help get high-quality produce at the right price.
“At a macro level, a lot of these issues will defeat any one retailer on their own. So we all have to be better at partnerships. We’re a very competitive bunch but on these issues we need to work more together.”
Higgs says: “There’s already quite a lot of cooperation among retailers on, for instance, ethical trading and human rights. We need to be thinking end to end.
“I think the time to act is now. There have been a lot of big brains looking at food security for some time. Now we need to move from talk to more action.”
As Sainsbury’s starts to sell insects as food, a beehive-style, more cooperative mentality must be adopted to ensure food retailers can supply what shoppers want and need in the years to come.