The future of food will be more environmentally sustainable and biodiverse, according to industry experts and new research.
Sustainability has been a much-discussed topic inside and outside the food industry over the last few years. Food activists and consumers, too, are increasingly demanding — and voting with their food shopping dollars — that food companies practice better sustainability and environmental stewardship.
Within the industry, a handful of big food companies, most-notably Danone, Nestle, Unilever, PepsiCo and General Mills, are beginning to make serious commitments to environmental sustainability and investing significant sums of money in sustainability initiatives.
A major catalyst behind these efforts is a high-profile study released this year by New York University’s Stern School of Business Center for Sustainable Business and research firm IRI, the findings of which make a strong business case for sustainability. The study is considered groundbreaking because it’s the first major in-depth analysis to reveal the return on investment of packaged food brands marketed on sustainable attributes.
Study: Sustainably marketed food outperforms traditional fare
The NYU-IRI study concluded that sustainably marketed products are responsible for more than half the growth in packaged food products since 2013, according to Tensie Whelan, professor at NYU Stern School of Business and director of the Stern Center for Sustainable Business.
“Products that had a sustainability claim on-pack accounted for 16.6% of the consumer packaged goods market in 2018, up from 14.3% in 2013, and delivered nearly $114 billion in sales, up 29% from 2013,” Whelan told CO—.
“Most important,” she added, “products marketed as sustainable grew 5.6 times faster than those that were not. In more than 90% of the CPG categories, sustainably marketed products grew faster than their conventional counterparts.”
The researchers examined over 36 product categories and more than 71,000 SKUs, which accounted for 40% of consumer packaged goods’ (CPG) dollar sales over the five-year period. The data was provided by IRI, which it collected from bar code scans at retail checkouts in food, drug, dollar and mass merchandise stores.
“Consumers are voting with their dollars against unsustainable brands,” Whelan said. “The legacy packaged goods companies that will thrive are those that accept this shift and are willing to pivot, such as PepsiCo and Unilever. Companies … that are not making the pivot to being more sustainable will lose.”
Consumers are voting with their dollars against unsustainable brands.
Tensie Whelan, professor, NYU Stern School of Business, and director, Stern Center for Sustainable Business
Food companies large and small are responding to the growing consumer trend of sustainability. Looking to grow your business? Read on for more current trends.
Big food follows startups’ lead
Also driving big food companies towards a more sustainable and biodiverse future is competitive pressure from a phalanx of startup and smaller entrepreneurial packaged food companies like Beyond Meat, Impossible Foods, Patagonia Provisions, Lundberg Family Farms, ReGrained and others, all of which are focusing on environmental sustainability as part of everything they do, from product sourcing to marketing.
Sustainability and food biodiversity are only going to become more important to the future of food and the food industry because they offer needed differentiation and a competitive advantage for big food companies in this new era where consumers are desiring unique and tasty foods and are gravitating to smaller brands, Mike Lee, founder and CEO of the Future Market and co-founder/co-CEO of Alpha Food Labs, told CO —.
Rather than a food system concentrated around a few foods, a biodiverse food ecosystem reflects the use of a variety of plants, animals and microorganisms that make meals more interesting and nutritious, while benefiting the planet and driving business, some experts say.
A whopping 75% of the world’s food comes from just 12 plants and five animal species, Lee said, citing statistics from the United Nations Food and Agricultural Organization.
“This concentration around just a few foods ignores the deliciously diverse bounty of tens of thousands of underutilized foods across the globe. It also makes our food system less resilient to threats like disease, pests and climate change,” he explained.
“Biodiversity sits at the intersection of taste and sustainability. Consumers today want new and different foods and flavors. Therefore, sustainability and biodiversity are good business as well as good for the planet,” he said.
Daniel Kurzrock, CEO and co-founder of ReGrained, agrees.
ReGrained is focusing on sustainability by turning the spent grain from beer-making into branded snack food products, a process it calls "edible upcycling," along with working with big food companies, helping them create upcycled food products.
Forty percent of all the food produced in and exported to the U.S. is wasted, with most of it going into landfills, according to a much-cited study by the National Resources Defense Council. This is an unsustainable practice and also bad business, Kurzrock told CO—.
“Wasted food isn't just wasted nutrients and resources, it also represents money being left on — or rather off — the table,” he said. “Tackling food waste as part of a focus on sustainability makes both dollars and sense.”
Rebekah Moses, who leads impact and sustainability for Impossible Foods, the company behind items like Burger King’s Impossible Whopper, told CO— that sustainability is playing a big part in the plant-based meat company’s phenomenal growth.
Moses argues that animal agriculture and associated land grazing is contributing too much to global climate change and therefore is not environmentally sustainable.
“Thirty percent of the land on the planet is devoted to livestock, which is bad for the climate and isn’t sustainable in the long term,” she said.
That’s why Impossible Foods is on a quest to create tasty plant-based meat products that serve up consumers an alternative to traditional meat.
Good taste and sustainability are the key elements in the rapid success of the company’s Impossible Burger, Moses said.
Food futurist Lee said environmentally sustainable food will only be successful if it tastes good, which is something every food company needs to understand if it wants to drive that business.
Lee, who’s currently working at Alpha Food Labs with a couple of big food companies to develop new brands of biodiverse food products, said the trifecta of sustainability, biodiversity and delicious taste will be drivers of the future of food as consumers not only seek out new and unique foods produced sustainably but also increasingly use foods and drink as part of their self-expression.
“Look at what’s happened with craft beer, for example,” Lee told CO—, “It’s become not only a taste phenomenon but also something people will use to self-identify [the brand and type of craft beer they drink] themselves with; it’s a part of many people’s self-expression.” Food is following the same trend, he said.
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
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