What are the main trends in the sustainable food industry?

Around 20 years ago, private sector sponsored farm sustainability programs began to emerge in many food markets. Companies like Whole Foods sprang up in the U.S. Customer demand pushed food producers to introduce organic, gluten free and other health foods or sustainably grown products. Food brands marketed by BirdsEye, General Foods, Unilever, Nestle, along with food retailers and distributors began to enhance their offering with food marketed as more responsibly or sustainably grown.

More recently the intensity of farm GHG emissions has become a focus of agri-food firms. In 2021 Craigmore committed to developing a net-zero dairy farm by 2035. Fonterra and Nestle slightly stole our thunder by announcing they will develop a commercially viable net zero carbon emissions dairy farm by 2032.1

We expect that biodiversity will be the next major theme alongside carbon. This is emerging already in the financial markets with the launch of the Taskforce on Nature-related Financial Disclosures this year.2

It is not easy farming in the face of these waves of supply chain requirements partly because, when adding a new focus area, food brands do not allow growers to give up earlier gains. As soon as water and carbon outcomes improve,3 a new wave of requirements, like bio-diversity, emerge. Operators like Craigmore cannot rest on our laurels.

Which food marketplaces are leading the way?

The U.K.’s sustainable food journey began 30 years ago when boutique high end grocers Waitrose and M&S incorporated human and environmental health values into their brands. The larger U.K. grocers began losing market share to these disruptors and were forced to adopt their own sustainability strategies.

Other countries with food markets shaped by tastes of middle-class households are following the same path. Leading grocers and food brands in Western Europe, North America and Australasia began to incorporate claims around welfare, human health, environmental health and emissions into their brands. A list of net zero commitments by leading agri-foods illustrates how widespread this has become:

Emissions Reduction Targets

Source: Map of Ag research

What is ethical investing?

The investment industry came later to the same trends.

Ethical investing takes a number of forms, the most widespread being scoring the Environmental, Social, and Governance (ESG) merits of investments – often by external agencies. Closely related are responsible investment policies, which prohibit investors providing capital to sensitive sectors such as tobacco companies or coal miners. Impact Investment Strategies, which seek to make a positive difference are rarer. Impact strategies such as those undertaken by Craigmore involve planting trees and protecting biodiversity as core aspects of the investment thesis. Other such ventures build social infrastructure such as social housing or schools, or invest in renewable technologies, green steel and other low carbon/climate-positive products.

Despite starting late, ethical investing has come a long way. These days 30% of European savers have selected savings products with ESG criteria.4

What do these food industry trends mean for farming?

Farmers in western countries experiencing these trends have been challenged and, in some cases, bruised. Farmers rightly see themselves as hard working guardians of nature and of the nutrition of society. They are suspicious of changes which they often see as having been unfairly imposed on them, while the rest of society continues to enjoy the benefits, for example widespread fossil fuel usage.

Farmers’ fears are understandable. As an active farmer and landowner myself, however, I’m confident that the greening of agriculture will be of net benefit to the farming community. Society is increasingly demanding new and positive services from a finite amount of land. New industries are springing up, such as planting trees on former marginal grazing land. In the hills of the New Zealand North Island and in Scotland this has already doubled the price of the least productive farmland. One positive result is that environmental demands for land use change may help us farmers rein in our habit of industry over-production.

The best land will continue to be used to produce food. On this farmland regenerative techniques are now steadily expanding. These use lower synthetic nitrogen, cover and multi-species crops, zero-till and precision machinery to enable less environmental damage per unit of farm output. In particular, technologies that reduce methane and nitrous oxide emissions per kilogram of produce are beginning to make progress. For example, Craigmore has invested in a tool under development by Ruminant Biotech that will significantly reduce emissions of biogenic methane from livestock. In arable farming, regenerative tools and techniques are being used to reverse a century of carbon depletion and to capture carbon back to the soil. Some growers are seeking to sell these gains as offsets – or to inset other on-farm emissions.

Service businesses are springing up to drive these agendas and to help farmers. At Map of Ag, a sister business to Craigmore, data integration helps farms measure and improve animal welfare, to reduce on-farm chemical usage, and to help deliver on retailer net zero commitments. One of our animal welfare programs has helped Sainsbury’s reduce the incidence of mastitis in their dairy supply herd by 50% over 10 years. We also help national livestock industries to measure and reduce the use of antibiotics and other anti-microbials in farm animals.

These changes will not occur overnight – farming is a large super-tanker to turn around. However, this sustainability journey is now well underway. Farmers who can adjust their farming systems may, in many cases, reap financial rewards as well as enhancing the land in our care.

Our next commentary will be on the impacts of Artificial Intelligence on agriculture.

Forbes Elworthy.

1. https://www.fonterra.com/nz/en/our-stories/media/net-zero-carbon-emissions-dairy-farm.html

2. https://tnfd.global/

3. https://www.craigmore.com/sustainability/reports/

4. https://www.ft.com/moral-money

Published: 5 July 2023