Why should the F&B industry invest in sustainability?

The need for improved sustainable food production has never been clearer than it is today. We continue to live with a pattern of extreme weather events, and food insecurity is becoming more pressing for communities around the world – according to data from World Bank, the most-affected countries right now are in Africa, North America, Latin America, South Asia, Europe, and Central Asia.

As the global population grows and climate change intensifies, the food and beverage industry has a key role to play in reducing emissions and increasing food security. We have to prioritise sustainability.

3 reasons why F&B needs to invest in sustainability

We’re years beyond the point when sustainable practices were an optional, nice-to-have feature for a food company. Sustainability for this critical industry requires focused investment from businesses and government bodies – but why?

1. Sustainable practices can help to reduce waste. An estimated one-third of all food produced by the F&B industry goes to waste – and Boston Consulting Group (BCG) estimates the economic value of all that food waste is USD $230 billion.
   
   On a small scale, strategies such as reducing portion sizes and implementing systems to utilise food waste as animal feed or compost can help to reduce waste.
   
   And at an operational level, better visibility over supply chains and inventories – for example, using AI and digital twin technology – can help to ensure that the right amount of food is produced and distributed.
   
2. Better sustainability in food production can help to protect natural resources. Food and beverage businesses rely on water and land to grow crops and make products. By reducing the volume of natural resources required, and ensuring companies only take what they need, we can protect the environment and free up more wilderness space – in which plants and animals can help create a more balanced environment.
   
   Water conservation is particularly critical right now, as many parts of the world face another year of drought. Europe’s groundwater levels are worryingly low in 2023; and African countries including Ethiopia, Somalia, and Kenya are experiencing the worst drought in four decades.
   
   There isn’t enough water to waste – so F&B needs to adopt methods to reduce water demands, and track consumption accurately.
   
3. Sustainable food businesses can boost the F&B industry financially. Consumers are becoming ever-more environmentally conscious, and a growing number of people are willing to pay a premium for sustainable products. So implementing strong, transparent sustainable practices can enable F&B companies to differentiate themselves from their competitors. Attracting future-minded consumers could lead to a growth in sales and profits.
   
   One knowledge-collaboration project by McKinsey studied over 40 companies across a range of industries, with the purpose of developing a set of practical recommendations to help businesses capture value from sustainability. The researchers found that the leading companies pursue sustainability “because it has a material financial impact.”
   
   It creates business opportunities and drives profits.

And sustainability is good for F&B’s public image

Consumers care about sustainability. A growing body of evidence shows that the majority of global consumers are more likely to buy from a company that demonstrates positive sustainability practices – from Simon Kucher’s Global Sustainability Study 2021, to Deloitte’s 2022 Sustainability and Consumer Behaviour survey; and many more.

The F&B industry can tap into the growing market for low-impact consumer goods by investing in sustainability, and showcasing efforts clearly and transparently. It’s not just about doing the right thing – it can also attract new customers and strengthen brand loyalty, increasing the lifetime purchase value of each customer and (by extension) the ROI on customer acquisition.

Food is inherently tied to our environment. So this industry has an opportunity to lead the way – moving the needle on sustainable production and profit, and working towards a better global future.

If you want to discover new practices, technologies, and partners to help establish industry-leading sustainability practices in your food and beverage business, join us in Riyadh for InFlavour 2023. Register now.

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