Food For Good by Michael Heasman

About This Blog: Food For Good

Food businesses around the globe are facing tough challenges about the future direction of their business models in the face of ecological, ethical and sustainability challenges. This blog follows the activities of food business as it looks to improve its Corporate Social Responsiblity (CSR) and sustainability performance. This includes strategy development, stakeholder engagement, environmental sustainability, ethical supply chains, risk management, marketing practices, product development, human rights and the trends, issues, and events that impact these.

 

Meat: The Food Industry Sustainability Hotspot For 2010

If there is one food guaranteed to be increasingly under the sustainability spotlight in 2010 it will be meat.

Momentum grew last year with greater 'sustainability' scrutiny of both the production and consumption of meat, from the popular consumer idea of 'meat-free Monday's' or hard-hitting documentaries like Food, Inc, to increasingly heated debates over the contribution of livestock production to greenhouse gas (GHG) emissions and hence climate change.

But there is nothing new about meat production and consumption courting controversy: from food safety, factory farming and animal welfare, to the (ill) health effects of eating meat. But like so many other aspects of food, 'sustainability' threatens to tip the balance towards the 'perfect storm'.

In this area, meat faces a raft of sustainability challenges in addition to climate change: such as intensive livestock operations using large amounts of water, concern about waste from factory farming methods, the 'energy' inefficiency of meat as a foodstuff (it takes around 10 calories of feed to create one calorie of meat), or the environmental damage caused by clearing forests for pasture or inputs used in rearing livestock, and so on.

The climate change part of the sustainability challenge gained real traction in 2006 with the publication of the provocatively titled report Livestock's Long Shadow by the United Nations Food and Agriculture Organisation which, among other facts, reported that livestock produced 18 percent of annual global GHG emissions.

Last year the WorldWatch Institute, the Washington D.C. based independent research organization on global sustainability, published research by Robert Goodland and Jeff Anhang suggesting this figure could be much higher: a whopping 51 percent of annual worldwide GHG emissions.

Goodland and Anhang went as far as arguing that replacing livestock products with soy-based and other meat alternatives would be the best strategy for reversing climate change.

And it is the possible negative impact of livestock production in relation to climate change where the meat industry is looking for new approaches. Just last week the Paris-based World Organisation for Animal Health, the world's top authority in farm animal health with 175 member countries, said it was launching a new study into the role of meat in climate change. This study will be the first time in the organization's 85 year history that it has undertaken an environmental investigation. It is expected the results from the study will be out in the summer.

But there is a newer, and from an industry perspective, more worrying sustainability narrative around meat consumption emerging. This is a story-line I believe you can track that is starting to say if you, as a consumer, care about the future of the planet eating less meat is a 'moral' act contributing to the future of humanity. Eating less meat is an individual consumer action you can take to help save the environment and show you 'care' about your food choices. 'Uncaring' meat eating for many value-driven consumers will become taboo.

The consumption angle, from a different point-of-view, is starting to enter food policy discourse as well. For example, in the UK the Sustainable Development Commission, set up as the UK Government's independent watchdog on sustainable development, published its advice to Government on priority issues for a sustainable diet. In their report, published December 11th last year, they included advice that reducing meat and dairy consumption was one way to make a big contribution towards improving consumer health and reducing the environmental impacts of the food system.

So this year look out for a lot of 'fight-back' from the meat industry, but treat with caution as this will need to avoid any charges of 'greenwashing'. At the same time look out for the business opportunities and marketing innovations within the meat or related sectors that work creatively with a new and sustainable story of meat.

KFC In Flap Over 'Grilled' vs. 'Fried' Chicken

A central plank in food corporations' social responsibility platforms these days is the development and marketing of 'healthy' food choices to consumers. In these days of heightened consumer nutritional awareness you would think this part of CSR would be the simple bit. Think again.

In an intriguing internal industry tussle Kentucky Fried Chicken (KFC), a business unit of Yum! Brands, has got itself embroiled in a storm in a chicken bucket. It is being sued by some of its own franchisees - the KFC National Council and Advertising Cooperative, Inc. - about KFC allegedly spending too much of its efforts promoting its new 'grilled' chicken over the Original Recipe 'fried' chicken.

KFC's 'grilled' chicken options - test launched in March 2008 and rolled out in 2009- promise fewer calories, fewer grams of fat, and less sodium over the Original Recipe fried chicken and is reported to have achieved sales of $1 billion in its first year (in 2008 KFC had total sales of $11.279 billion according to Yum! accounts).

Business Week reported that the lawsuit centers around ad bias with the plaintiff - the KFC National Council and Advertising Cooperative, Inc (which is a separate entity from Yum! Brands, and represents KFC franchise owners in the company's marketing decisions) - claiming the President of KFC is favoring grilled chicken over its staple fried chicken. The lawsuit was filed in Delaware Chancery Court.

The Washington Post reported a spokesperson from KFC parent Yum! Brands as saying the lawsuit is "baseless". The Post article also quoted a senior vice president from the Association of Kentucky Fried Chicken Franchisees as saying while they needed both grilled and fried chicken, fried chicken accounted for 80 percent of their business.

The KFC battle over 'fried' versus 'grilled' may seem a sidebar, but it shines a light on the bigger picture of the challenge of moving healthy eating innovations from niche to mainstream and from often value-added product niches within companies. Transforming traditional food supply to a more health-orientated one is the heart and soul of food industry social responsibility in this area. But it also questions the extent of food business' role and how food business can address public health issues as they relate to diet, health and well being.

UK Food Policy And Strategy For The Next 20 Years Unveiled

It was a special week for UK food policy. The good news was the unveiling of the UK Government's 20 year food strategy called "Food 2030" at the Oxford Farming conference. The strategy document set out goals for a sustainable, food secure, and healthy UK food economy.

The strategy will be co-ordinated by the Department for Environment, Food and Rural Affairs (Defra) but sets out to integrate food policy across every government department - a feat last untaken during World War II.

Introducing the new strategy the UK's Environment Secretary Hilary Benn said:

"Food security is as important to this country's future well-being - and the world's - as energy security. We need to produce more food. We need to do it sustainably. And we need to make sure that what we eat safeguards our health".

In his forward to the 82-page strategy document UK Prime Minister Gordon Brown writes that Britain can become a world leader in food policy. He says:  "...we face big challenges today which means we need to think differently about food. We can't carry on just as we are..."

All heady stuff and it may have taken a generation - 25 years - to reach this point but this is big news. For example, back in the dark days of UK food policy in the 1980s, UK government regarded food policy as little more than something to do with food labeling and even then didn't do much. So there is a lot in the language of the Food 2030 strategy to welcome.

But reading the strategy there is a dawning realization of how much there is still to do especially to make true on the government's goal that all voices with an interest in the food economy have a proper say and role. 

Unfortunately a lot of the document reads as a re-telling of many of the things underway and the vision could be summarized as the the 'wish list' that has been in public discourse for the past 20 years - about consumers being better informed and able to purchase 'healthy' food and about food and farming becoming more competitive, efficient and profitable. 

Consumers as usual are expected to take 'personal responsibility' for their food choices. The added dimension is all of this needs to take place in the context of 'sustainability' - but the big picture vision and metrics about how a sustainable food system will be benchmarked so we know it when we see it are vague. 

The role of government is also left a little vague. Government's role in the Food 2030 strategy is set out in the language of textbook economics - that is, the role of government is to "correct market failures". Where ever possible change over the next 20 years will be "voluntary", not least in relation to business.

Reflecting on Food 2030 an array of contradictions begin to emerge. For example, a key objective is to get consumers to reduce food waste. An important goal. But at the same time, and central to the strategy, is to increase production. So as consumers use food more prudently yet supply expands it is not clear how this market squeeze will be managed.

There is recognition of the fast emerging new food consciousness, such as local food consumption and fair trade measures - and unbelievably part of the strategy claims it will encourage consumers to 'grow their own food'. Again undercutting the market and production model dominating the overall strategy. 

So does the government see 'grow your own' and local food economies as being transformative or remaining in the margins of the larger food economy? I suspect the latter since the strategy does little to explain the major business restructuring in industrial farming and food business that would be needed to correct the current food system to one that meets healthy eating dictates and local and regional food security. 

Because I am assuming the need for Food 2030 arises from the fact that the current food system is both unsustainable and unhealthy for people and the environment. 

An important supporting document to accompany Food 2030 was the official launch the next day of the UK Government's Food Research and Innovation plans. Here though was the creeping feeling that it was back to 'business as usual' and that different visions of a sustainable food supply might get short shift. In launching the plan the Government's chief scientific adviser (it was left to him not a politician) was reported as saying that GM technology is critical to the challenge of increasing food production. 

So back to the industrial 'hi-tech' productionist model of food and an approach challenged by many as far from 'sustainable'.

The chief scientist also mentioned the use of new nanotechnologies as part of the future of 'hi-tech' food. It was unfortunate because by the end of the week the thorny problem of 'trust' in UK food was making headlines centered on nanotechnology. The problem of food industry secrecy and lack of accountability was back in the news Friday when the UK's House of Lords Science and Technology Committee criticized the food industry as being "too secretive" about its use of nanotechnology. Lord Krebs, committee chair, was reported as saying: "...we are not clear what is out there in use at the moment". 

If Food 2030 is to work - and it needs to since as the Prime Minister said the food system can't carry on as it is - some of the 'softer' values, such as trust, authenticity, ethics, democratic discussion and social innovation, will be of equal importance and in need of their own strategies to be part of establishing a sustainable food economy and food secure country.

Green investing: managing ecological risk in the food sector

Of all the many New Year 'lists' that have appeared over the past couple of weeks, one of the few that made me think of the bigger picture and avoided superficial marketing fads was from Portfolio 21 based in Portland, Oregon.

They produced a green investing 'top 10' guide for 2010 - Portfolio 21 manages a global mutual fund investing in green companies - so their investing advice does not apply directly to the food industry, but in my view is especially relevant to future risks facing food and beverage companies.

For example, they suggest going beyond looking at whether companies say they care for the environment, but look for the substance and relevance of what the company is doing. They write: "Greenwashing has no place in a company that is serious about its future". Much of the content of this blog reports on just this issue - how much or how little 'greenwashing' is going on in the food sector.

Portfolio 21 also cautions investors to pay attention to the company business model to ensure companies are adapting to gain competitive advantage within ecological constraints and as a result are they going beyond 'business as usual'. This is a key issue - in what way is the future of food about having to redefine and implement new business models or will it be a case of tweaking existing practices?

In food there is a real risk the 'tweakers' will become the long-term market losers. As Portfolio 21 say, as far as the ecological crisis is concerned the future is now. They remind us that ecological limits are not going to happen someday, they are happening right now. They write: "From an investment perspective, we cannot afford to be in denial or hope and wait for a technological solution to solve the ecological crisis".

With this in mind, it is interesting to question which food companies are really managing ecological risk and opportunity compared to those that seem more involved in damage limitation (or even denial). 

The Impact Of Climate Change On The United States

Often times it is all to easy to take comfort in the thought that climate change will affect someone else or someplace other than our own communities. It is hard to picture our own quality of life changing, especially for the worse. 

Yet an authoritative new study, published last week, challenges any complacency we might have sitting comfortably in the rich world. The new report from the National Oceanic and Atmospheric Administration (NOAA), part of the U.S. Department of Commerce, says that climate change in already having visible impacts in the United States.  

The report - Global Climate Change Impacts in the United States - warns that climate change impacts are expected to become increasingly severe for more people and places as the amount of warming increases.

The report, first commissioned in 2007, offers an objective scientific consensus about how climate change might further affect the United States and confirms previous evidence that global temperature increases in recent decades have been primarily human-induced. The report shows how climate change in the U.S. is already affecting water, energy, transportation, agriculture, ecosystems, and health.

So what does the report say about our ability to produce food. Well the experts conclude that U.S. crops and livestock production will be increasingly challenged. While many crops show positive responses to elevated carbon dioxide and low levels of warming, higher levels of warming often negatively affect both growth and yields. There is the potential of increased pests, diseases and extreme weather all impacting agriculture, which means lower yields and some key crops not performing as well in certain regions as they have in the past. Particularly problematic will be the stresses caused by climate change on livestock production.

In addition, impacting both agriculture and livestock production, will be climate change stress on water resources in the United States. While water is an issue in every region of the U.S., it will hit some harder than others, especially in the West (also the heart of the country's horticultural industry).

The report does not set out to offer policy solutions, but to highlight the need for early and what the NOAA calls 'aggressive' action. 

The most striking lesson for me, from reading the section of the report on agriculture, is the urgent need for food business to assess and detail the business 'risks' climate change poses to their operations, particularly in relation to their supply chains, and their exposure to the agricultural and livestock value chains most likely to be impacted by climate change. 

A further area, already undertaken by some food and beverage businesses, is for food businesses to explain the short- and long-term actions being taken or developed to adapt or mitigate against these 'risks'. The sooner the better, if this report is anything to go by.