From droughts to flooding, climate change is having a devastating effect on the food and beverage industry. Unfortunately, the industry is also one of the biggest causes of climate change. From carbon emissions in farming to food waste in factories, the United Nations estimates that around a third of all human-caused greenhouse gas emissions is linked to food and beverage production.
So, is the food and beverage industry doing enough to reduce its impact on the environment? And what more can be done?
Is food and beverage doing enough to prevent climate change?
The short answer here is no. If it were then the industry would simply not be having the impact it is.
“The industry is definitely not doing enough,” Richard Cope, sustainability expert and senior trends consultant for Mintel, told FoodNavigator. “Many brands are focusing on the low hanging fruit, doing things like trying to make packaging sustainable to appeal to consumers.”
Moreover, those efforts to make packaging more sustainable could be creating further problems, not solutions.
“Brands will make a big play about how a product has zero plastic in its packaging, with a move towards paper. But in reality, that might not actually have a lower environmental impact,” says Cope. “Paper still contributes towards land use through forest degradation,”
The industry is also failing consumers with claims, which imply carbon neutral credentials, when in fact they are offsetting their carbon emissions.
“64% of consumers we speak to say they prefer companies to reduce their emissions, rather than investing in offsetting schemes,” says Cope.
And brands would be advised to move away from carbon offsetting sooner rather than later as the EU is in the process of cracking down on carbon neutral declarations.
“From 2026 the European Union is banning carbon neutral claims, when they’re based on a degree of offsetting,” says Cope. “Brands need to take direct responsibility for their emissions and reduce their impact where they can, by transitioning to things like renewable energy in production, electric distribution fleets powered by renewable energy, and to lighter, more durable packaging.”
What more can the industry do do reduce its environmental impact?
A more holistic approach to sustainability in food and beverage is required, taking in all aspects of production.
“Brands need to look at the sourcing stage of their products,” says Cope. “They need to work out what their supply chain looks like, from the very start of the process. They have a responsibility to do that.”
And responsible sourcing is a hot topic at the moment as the deadline for the European Union Deforestation Regulation (EUDR) approaches.
“Responsible sourcing of products is something brands have to prioritise,” adds Cope. But beyond that, all stages of the supply chain, in terms of manufacturing and product storage, need to be addressed.”
What can be done to support food and beverage brands become more sustainable?
The industry needs to work together to affect change, implementing a linked-up approach, rather than each individual stage operating alone.
“Too many individual businesses are trying to face sustainability challenges alone,” Peter Wortsman, partner at agrifood consultancy firm EFFP, told FoodNavigator. “Supply chains have to work more closely together to be resilient and successful.”
Furthermore, brands need to support their suppliers in implementing the necessary changes.
“There is a lot of focus on measurement and reporting, but not enough engagement with farmers to support changes to farm practices where most of the opportunity is,” says Wortsman.
Becoming more sustainable is a huge challenge for suppliers, so how can manufacturers support them?
“First, gain more awareness of the risks in food and beverage supply chains,” says Wortsman. “Then address these risks by considering sustainability as an investment for a more resilient and profitable future. It’s also important for brands to build direct relationships with producers, so they can support them in transitioning to more sustainable practices resulting in a less volatile supply.”
But this is not just preferable, it’s essential for ensuring the future of food security.
“Sustainability needs to be the strategy, not a side issue, if food and beverage companies want to be around in the future,” explains Wortsman.
Sustainability matters to consumers
And while implementation of sustainable practices may increase costs for brands, climate change is fast becoming a major concern for consumers.
“Smart businesses know they have to do this, without passing on the cost to consumers straight away,” says Mintel’s Cope.
However, those increased costs will pay off in the long run as consumer trust grows.
“Consumers might not pay you a premium for it right now, but there’ll be more loyal to brands which are more sustainable,” says Cope. “If you’ve got two brands and both of their food products are equally tasty, equally high quality, equally nutritious, but one offers farmers support and uses regenerative agriculture, that’s going to be the differentiator. In fact, brand reputation is actually one of the big business cases for being sustainable. This is the way the world’s going, if you’re not doing it, you’re going to stick out like a sore thumb.”
Moreover, the costs might be higher now, but governments are legislating to reward sustainable practices so making the change now will be cheaper in the long run.
“It’s going to cost you money in the short term, but the long term, it’s going to save you lots of money,” explains Cope. “If I owned a drinks company, I don’t want to be paying huge landfill taxes because my packaging can’t be recycled and I don’t want the EU to ban me from making carbon neutral claims because I’m basing it on offsetting. The compliance issues and the efficiency issues all make financial sense.”
What’s more, it’s in a brand’s best interest as it is helping to secure future supplies.
“Brands want to guarantee they’ll still have a supply of coffee, chocolate, cocoa, grain etc. in the future, so they need to have to be more sustainable in their supply chain sourcing,” says Cope “Initially that involves changing business models as well as investment in research.”
Companies that can help you become more sustainable:
- European Food and Farming Partnerships (EFFP): Supports food businesses in building collaborative relationships along supply chains, from farm to fork
- Bain & Company: Works across a range of industries, including food and beverage to help build sustainable operations, while supporting innovation and growth.
- Genpact: Aids the move towards more sustainable practices for FMCGs, from supplier through to manufacturing and retail.