Food transition requires integrated supply chain innovation

Our food system is running aground economically, socially and environmentally. With an increasing world population and unchanging consumption patterns, our current food system will no longer continue to provide food security. In short, work for the food industry, where chain innovation will become a decisive factor. It will be chess on six boards at once.

The most recent edition of Gamechangerz in Food, a platform of Gwynt and GfK, discussed at length the challenges associated with a food system in transition. On balance, there are a number of concrete tasks to achieve a sustainable and high quality food system and an integrated chain approach, see image below:

However, this kind of systemic change does not come without a struggle. In practice, it will be an evolution with intermediate sprints and setbacks. In recent years, for example, we have seen the impact of energy prices on the chain, but the impact of CO2 emissions or water consumption will also become critical boundary conditions within business models in the future.

Transparency and true pricing

Indirectly, this makes the bottlenecks of our current food system increasingly explicit in prices and availability. This transparency in the chain is necessary to achieve a sustainable and fair system. A striking example is that Albert Heijn has also just recently taken the first steps with true pricing, providing insight into the actual impact of a product.

Livestock and cultured meat

It is also notable that solutions tend to serve multiple purposes. Thus, the value of the protein transition lies not only in climate, but also, for example, health and the ethics surrounding livestock production. There is much experimentation with cultured meat, with pioneers such as . Although the approval process is still ongoing in most countries, this technology has the potential to make great strides in reducing impacts on climate, emissions, water and land use.

Impact of legislation

The speed of release is also immediately illustrative of the major impact that laws and regulations have on innovation. The well-known dossiers on nitrogen, sugar and salt covenant place restrictions on innovation, for the benefit of a better environment and health. Similarly, the rejection of the proposal to reduce VAT on fruits and vegetables shows the influence of the government. Meanwhile, the EU’s new policy on CRISPR-Cas is an interesting step. This gives the ability to very specifically modify DNA structure, giving room to discover the unknown properties of fruits and vegetables.

Acceleration of innovation needed

In any case, further acceleration of innovation is very much needed to achieve subsequent breakthroughs. Innovation on purely business grounds remains relevant, but new laws and regulations in particular will raise the bar. That the need for product developers remains high is therefore not surprising, as seen in the growth of the number of development centers.

More innovativeness does not immediately mean better innovations. In particular, the real breakthrough will lie in the method of innovation. Whereas today the focus is mostly on the existing portfolio, innovation should be encouraged from a more integral perspective. In doing so, the effect will also be that real breakthroughs will be found deeper and deeper into the food chain.

Integrated chain approach

This requires direction but also vulnerability. The chain partners need to start investing in collective innovation or an integrated chain approach. Product managers will have to make the move to not only have departments be multidisciplinary, external partners will also be part of the team. Getting a clear picture together of the total impact of the chain and innovating on the themes with the greatest potential for improvement on the basis of a good materiality analysis. If you don’t do this, then solutions will remain suboptimal or, at worst, work against each other.

Role of ingredient suppliers

Our experience shows that within the food chain there is an important directing role for retailers, while in many cases the significant improvements can be achieved through smart innovation with the agricultural and ingredients sector. After all, the transition to mainstream plant-based dairy is a long way off if you don’t consider New Science Park should boost innovation nutrition and health the dairy industry’s perspective. Good to realize, by the way, that the food ingredients sector has a very essential role to play in the food transition. After all, the essence of products lies in the raw materials that make up it, and it is precisely this sector that is able to develop new ingredients from primary raw materials, thereby increasing the positive impact of the overall chain.

Tricky: how to proceed now?

In the already turbulent period in which many food companies are currently facing decisions, changing the food system makes for a tricky topic. What will be my role in the future? As a company, what competencies do I need to develop for this? How do I get all stakeholders on board with this? And what is the right route to develop from current business operations to sustainable revenue models?

In any case, executives of food companies will have to seek each other out emphatically in the coming years. You don’t do this systemic change individually but as a chain. By investing in knowledge, technology and culture, you as a company are able to maintain your own direction and build dor to future-proof.

Article VMT

Authors: Pim Pilon, Senior Business Associate at Gwynt and Bas van Eekelen, Partner at Gwynt

Photo: Freepik