MHA | Food for Thought - becoming a leader in the food industry

Food for Thought - becoming a leader in the food industry

Mark Lumsdon-Taylor · October 27th 2023 · read

Grains Containers on Farm

Climate change, workforce migration, economic uncertainty, health impacts, import and export inflexibilities, the increasing application of tariffs and territorial disruption globally mean one thing for businesses operating in the food and agriculture sectors: the companies that anticipate change will be tomorrow’s leaders.

But where to start?

Let’s look at twelve of the potential risks and opportunities that businesses must consider if they are to move from reaction to action, from follower to leader, beginning with Climate Change.

  1. Climate Change: Let’s not beat about the bush. Climate change is happening, and its potential impacts are far-reaching. Every organisation needs to be assessing the risks and opportunities that climate change brings, taking mitigation action where possible and building strong defences around critical business functions.
  2. Food Scandals: Each scandal results in the industry crying ‘never again’ – until the next time. Recent high-profile food safety and food fraud scandals have triggered public health concerns, resulting in damage to trust in the industry and governments across the globe. The omnipresence of social media means that a slip can become a scandal in the blink of an eye – or the tap of a screen.
  3. Border Restrictions and Impositions: As countries seek to improve their self-sufficiency, meet their greenhouse gas emissions obligations fairly and maintain food welfare standards, the type of tariffs envisaged in France’s CBAM (Carbon Border Adjustment Mechanism) are likely to become more widespread, shifting consumer food price expectations and potentially increasing food inequality.
  4. Changing Food Demands: High population growth and widespread economic development are driving enormous increases in global food consumption, whilst an expanding ‘middle-class’ is increasingly demanding better quality and wider variety. Improved purchasing power has led to a sizeable increase in demand for resource-intensive products with associated implications for agriculture and the environment. In parallel, even demand for standards such as organic and halal are increasing the pressure.
  5. Obesity: An increasingly powerful group is focusing its sights on processed and ultra processed foods and the impact on gut microbes over indigenous diets. One school of thought says the omission of certain microbes from an ultra-processed food diet is a major contributory factor to obesity. The obesity issue is not going away because it impacts global health and puts strain on health services and systems leading to welfare decline.
  6. Integration of Supply Chains: Increasing regulations applied to global food trade means that major food companies are investing heavily in integrating their food supply chains to improve efficiency, food safety and traceability. In parallel, governments across the world are developing policy and strategic imperatives to encourage supply-chain integration to improve quality and mitigate the opportunity for food fraud and food scandal.
  7. Increased (and increasing) Regulatory Standards: Governments across the world, and in particular the United States and China, are adopting stricter regulations for quality standards, supervision and sanctions. That adds complexity which, in turn, can increase the risk of compliance breaches as well as adding costs for companies with multi-jurisdiction operations, supply or distribution chains.
  8. Shifting Global Economic Power: The enormous growth in Asian economies, especially China and India, is already creating major new consumer markets. It is predicted that by 2030, the purchasing power of the E7 economies will exceed that of the G7.
  9. Technological and Scientific Advances: Amongst the doom and gloom is the shining light of technological and scientific advances. They are increasing our ability to identify hazards and risks, as well as helping us to address some of the issues resulting from climate change and globalization. Never before has transparency regarding origins and ingredients been better supported. GPS mapping and DNA labelling, data analytics and more have resulted in companies being better and faster able to spot issues, target recalls and increase accountability. But technology comes at a price – the question is, what price is too high?
  10. Compliance as a Competitive Advantage: The best food companies are setting internal standards that far exceed those required by regulation and law. Exceptional quality has become a powerful means of differentiating them from their competition and generating high levels of consumer trust and brand loyalty. They see this as an investment, not merely a cost. We call it ‘Purpose with Profit’.
  11. Empowered Consumers: Never before, have consumers had access to so much information, and misinformation. The internet exposes the world to food and health issues as well as a plethora of ill-informed claims. Navigating this path challenges companies to be clear, honest, engaging and transparent. With every smart phone offering almost instantaneous access to a world of information, businesses need to invest properly and proportionately in risk-management, communication and crisis response planning.
  12. Population Growth and Scarcity of Resources: As population levels continue to rise and people continue to prosper, it is estimated that agricultural output will need to increase by 70% to support the world’s population by 2050. And that against a backdrop of diminishing amounts of land being available for agriculture due to climate change and repurposing of land for long-term environmental sustainability. Our current consumption is already unsustainable. The opportunity exists for new growing techniques and regimes, revisiting historic methodologies, developing new technologies, making corporate acquisitions, and even reshaping diplomatic relations to share the available water, land and energy the world’s population will need.

The risks for businesses in the agricultural and food sectors are unprecedented, but so too are the opportunities for those organisations prepared to anticipate and build towards the changes that, in some cases, are already upon us.

How does your organisation stack up against our twelve potential risks and opportunities? A strong dose of honesty now, and the support from a knowledgeable advisor, can help you become the leader the future demands.

Get in touch with our experts today!

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