As technology has advanced and populations have expanded, so has the supply chain that produces food, beverages, and ingredients worldwide. That growth has been accelerating exponentially over the last two decades.
One 2016 study reported that “the total shipment value of the food industry (including beverages) of the world’s major 73 countries in 2014 hit $6.04 trillion,” more than double that of 2001. Exports are a huge part of that. Between 2001 and 2011, “the average annual growth rate of the exports of the world’s food manufacturing industry” hovered at 9.6 percent.
But something happened along the way. Consumers started demanding “local” food, at both markets and restaurants. In 2014, local U.S. food sales reached $11.7 billion – a quantum leap over 2008 when consumers spent $8 billion on local food, according to the U.S. Department of Agriculture. The trend has shown no signs of slowing, with some even going so far as to claim that “local” is the new “organic.”
Several factors are pushing consumers toward local foods, such as transparency, economics, and perceived health benefits. But sustainability is perhaps the single greatest catalyst powering the local food chain movement.
But consumer preference is far from the only reason that regulators, suppliers, and manufacturers are pushing for greater sustainability. It’s a matter of balancing limited resources against growing demand. According to the WWF, once known as the World Wildlife Fund, “By 2050, the world’s population will reach 9 billion and the demand for food will double.”
Additionally, “about 1.3 billion tons of food are wasted each year — four times the amount needed to feed the more than 800 million people who are malnourished.”
Finally, estimates suggest that food production accounts for roughly at least a quarter of global greenhouse emissions.
There’s a Will, But is There a Way?
Stakeholders in the food and beverage business don’t need to be convinced. A recent Grant Thornton survey found that 44 percent of companies ranked sustainability as “extremely important or important” in their business strategy. Additionally, nearly 70 percent of companies insisted that sustainability is not only critical to growth but “profitable in the long run.”
A Ceres study reveals that more than two-thirds of the largest publicly traded U.S. companies have committed to cutting greenhouse gas emissions, while more than half have established policies to better manage water use.
Countries and companies have been chasing sustainability for years, but real progress remains elusive. That same Grant Thornton study found that 52 percent of companies found it “difficult to implement.” According to Bain and Co., “seven of the 10 largest global consumer goods companies have set carbon emissions reduction goals that include indirect supply chain emissions, and eight have ambitious sustainability targets that require engaging significantly with upstream suppliers.”
That’s where manufacturers are hitting a wall when it comes to improved sustainability: they can only do so much on their own. They need the help of producers – their suppliers – to make any significant gains toward real sustainability.
Suppliers are on the front line in the battle for sustainability. They’re the ones with boots on the ground, where they face the daily issues of water conservation, implementation of renewable energy sources, and better use of more traditional, non-renewable energy.
For manufacturers, sustainability means producing goods in the least environmentally harmful way while conserving both energy and natural resource consumption. Food processors face several issues in their bid to become more sustainable, such as packaging, food loss, and other renewable energy sources.
TraceGains Can Help
TraceGains’ suite of software solutions can help pave the way for both suppliers and manufacturers to make the transition toward real sustainability.
Supplier Management allows users to manage supplier documentation with unique access to custom dashboards for critical documents including allergens, organic, nutrition, supplier/item risk analysis, and more. Supplier Management directly taps into TraceGains Network, allowing customers to request documentation from all their suppliers with one action. Conversely, suppliers can submit required documentation to all their suppliers using TraceGains’ PostOnce™ technology.
A new sustainability form is available online that allows customers to assess their suppliers to make sure the product they’re sourcing matches not only to safety and quality specifications, but ethical and sustainable standards. This also allows sustainable suppliers to stand out from the crowd and capitalize on their competitive advantage. Request a demo today.
Mike Hubbard, SVP Revenue, TraceGains will present: Accelerate Growth and Time to Market Through AI and Automation at Future Food-Tech San Francisco on March 20.