Agribusiness, Food Innovation, and Sustainable Consumption
By now, in some shape or form, you’ve stumbled upon a news article or ‘aesthetically-pleasing’ infographic emphasizing the importance of sustainable consumption. Despite on the surface, appearing as merely a buzzword companies and corporations throw around as a marketing ploy, sustainability, and the measures society takes to withstand the effects of climate change will ultimately determine the trajectory of future generations. Implementing sustainable practices \has increasingly become a key driver across industries. For example, Noel Quinn, the CEO of HSBC, states that “The climate crisis may not be reversible and that’s why I think banks, and financial services more widely, have taken on board the need to make rapid progress and catch up on the work that’s needed around sustainability,”. One industry, in particular, is addressing its direct effect on the environment head-on.
The food and beverage service sector plays one of the most significant roles in the economy’s overall stability. In fact, the food, agriculture, and adjacent industries contributed nearly 1.2 trillion to the United States’ GDP in 2019. As the means of collecting and consumption of food has changed over time, it is inevitable that preexisting food systems need to adapt to modern-day circumstances.
With the rising severity of climate change, various regions of the world are experiencing increased food insecurity. Issues of inadequate food supply and quality have been exacerbated over the last 18 months as a result of COVID-19. Due to the many external disruptors affecting food production, transportation, and storage, alternative and innovative food solutions are needed to help withstand the emerging issue.
The Business
Conditions such as extreme weather and widespread water scarcity are causing harm to crops and livestock—making it more difficult and expensive for farmers/food producers to generate sufficient food supply. This has caused an increased necessity for companies to step in with voluble solutions to help mitigate these external factors. B2C trends, specifically in the areas of food usage and utility are rapidly evolving and companies are facing increased pressure to implement ESG strategies. ESG criteria, or Environmental, Social, and Corporate Governance is a framework that can be used to evaluate a firm’s awareness of both social and environmental factors. Investors are becoming more critical of the impact of their portfolio companies and are eager to put money into causes with positive impacts.
The Individual
Due to the severe effects of climate change, more individuals are becoming increasingly aware of the impact their direct consumption has on the environment. It is estimated that roughly a third of human-made greenhouse gas emissions derive from our food systems. With copious amounts of greenhouse gas emissions and rampant climate warming, the severity of the climate crisis is now more apparent than ever. This has caused an increased demand for more environmentally conscious products, packaging, etc. Many consumers are reclaiming the power their dollar has in the larger economic system and are actively changing their purchasing habits to better reflect the values they seek in companies.
The Solution
One common question still remains. “What can we do to help combat climate change?”
The main solution to this problem, in relation to the food industry, is to make significant transformations within the three stages of the food supply chain—the first being production. Farmers and scientists alike are actively seeking innovative ways to minimize the damage agriculture has on the environment. Companies such as GreenForges are developing alternative methods to traditional agricultural practices. Going forward, improvement to the process in which soil and land are cultivated will play a large role in the impact of food production on the environment. With the transportation sector making up 29% of the United States’ total greenhouse gas emissions in 2019, stagnant progress in the transportation of food and related items will have detrimental long-term consequences. With the vast expansion of the global food trade, finding ways to either reduce or repurpose CO2 emissions from transportation goods will be crucial in slowing down the effects of climate change. Ma Yanhe, a microbiologist at the Tianjin Institute of Industrial Biotechnology is paving the way for innovation in the context of reaching carbon neutrality—with the development of synthetic starch from CO2 gases. Approximately 108 billion pounds of food is wasted every year in the United States—equating to more than $160 billion of wasted product. With the rise of food spoilage and scarcity, sufficient food cooling and storage will be imperative to reducing food waste. The current condition of the environment is the result of centuries-long negligence of the environment—thus the climate crisis will not be solved overnight However, reforming the way in which food is utilized and perceived will ultimately cause an uptick in both the supply and demand for sustainable food solutions.