The food and agriculture sector is the lifeblood of the Canadian economy. It is a strategically important sector (accounting for 8 % GDP and providing 1 in 8 jobs) where Canada plays a leading global role.
And yet, Canada’s dominance internationally is under threat, and the national food market is undergoing massive change. Sustainability is emerging as a key theme for the food sector and one that brings potential for creating value on multiple fronts – improving economic outcomes, business success, health and sustaining the environment.
But what sustainability means in the sector remains elusive. Here at Stratos, it’s our job to keep up with developments in the field (in this case literally). We track below 5 trends to keep your eye on as food and agriculture sustainability gathers pace in the year to come:
1. Nutrition and Health – A “Generation of Label Readers”
Canadian consumers are more educated about their food than ever before. Agriculture and Agri-food Canada aptly calls this a generation of label readers – health conscious and hyper-aware consumers who pay attention to what they feed themselves and their family.
As this trend gains steam, actors from across the food and agriculture sector are responding. The % Daily Value joint-campaign from Health Canada and Food and Consumer Products of Canada (FCPC) is aimed at helping Canadians make healthier, more sustainable food choices.
The past two years we’ve seen major suppliers and retailers getting on board the health and nutrition bandwagon. The iconic Campbell’s soup brand has made significant strides towards reducing salt content – and hasn’t been afraid to boast about it some excellent new advertisements. That’s been followed by Walmart’s recent launch of their plan to aggressively target health improvements through their operations and supply chain.
Watch for consumer education as the next area for exploration by major food companies.
Key question to ask: What is my health and nutrition strategy?
2. Eco-Efficient Production
Farmers have always been more connected to the earth than most Canadians. That attention is now leading farmers to move to invest in efficiency and sustainable energy and there are signs that it’s starting to reap compelling business returns. Now more than ever, Canada’s food is being grown on farms where resources are not only used to harvest crops for the shelves, but also produce electricity for the grid.
Empowered by rising consumer and major retailer interest, some of the biggest consumer goods names in the business are also aggressively tackling efficiency and renewable energy. Unilever is now the largest commercial purchaser of Bullfrog’s renewable power in Canada, and Kraft, with their Dad’s cookies are an early adopter of a product approach to green energy.
Watch for renewable energy labelling hitting the shelves in the next 12 months.
Key question to ask: What’s my efficiency and renewables market proposition?
3. Connecting the Supply Chain
While many of the barriers to sustainable agriculture are physical in nature, some of the biggest are more about mindset; about how we frame our approach to the food we eat, the products we buy and sell, and how we understand the impact our consumption has on the Earth. And it is here that some of the biggest advances in food and agriculture sustainability are being made, with consumers and business beginning to connect the dots of the supply chain.
Traditionally, retailers sustainability efforts have focused on their operations and their operations alone, from receipt of product to it leaving the door under the arm of a paying customer. But the before and after part to this story matters – and we’re beginning to see significant investments put into the infrastructure and measurement systems that understand lifecycle impacts. The results are potentially transformational – presaging seismic shifts in the way our food system works. Innovation is driving rapid advances on sourcing ethics, sustainable packaging, transportation miles, international safety practices and now health, and is starting to impact both how and what food arrives at and leaves store shelves. The Walmart initiated Sustainability Consortium has been well publicised, but the work of others – including the Consumer Products Forum – is starting to bring this thinking rapidly to scale, bringing a hard business angle to the drive for food sustainability.
Watch for unlikely coalitions of companies and producers working together to advance food sustainability
Key question to ask: Do we have the information we, and our customers need, on our supply chain sustainability performance?
4. “Virtual” Water
While trends around health and energy have been building for a while, interest in water has seen a relatively recent surge. In the food and agriculture sector – water is absolutely vital. Businesses and consumers are just starting to understand that when it comes to water, not all foods are equal. The key to understanding water consumption (which is of course very different from important water quality impacts) is virtual, or embedded water – that is, the water usage built into the production, transportation and sale of individual products.
As water continues to emerge as one of the most pressing business and policy issues facing the sector we expect to see rapid innovation in this space. There are already signs of work afoot – Canada’s food and agriculture producers are asking important questions about the water footprint of their operations. Global initiatives like the Water Footprint Network are gathering steam with impressive corporate sign on, all with the aim of accounting for water usage and improving efficiency.
Watch for the emergence and trailing of water footprinting standards.
Key question to ask: Where are the critical water impacts in our supply chain?
5. Standards Explosion
Standards and certifications are not a new concept in the business of consumer products, but the drive towards sustainable food is seeing a huge growth in standards. Whether it’s local, organic, low salt, carbon neutral – consumers want to know more about their food, and companies are looking to provide third party validation of their practices.
Canadian’s already see a huge range of standards on their products from the Canadian organic standards, to the Local Food Plus initiative letting consumers know what products are from their own backyard, or the Heart and Stroke Foundation’s Health Check label that evaluates nutritional content of food. The growing value attached to sustainable practices though is starting driving organisations to look at how the standards they apply in production can become part of a consumer offer.
In the next year we’ll see Bullfrog Power logos on food products and anticipate work by others to produce consumer offerings around their production standards, letting consumers know about their efforts, setting food products apart from their peers, and driving further uptake of sustainable production practices.
While this interest in sustainable practices is certainly a good thing, proliferation of standards also runs the risk of confusing and crowding an increasingly saturated market place. In parallel to the ongoing growth in this area we expect initiatives to streamline, consolidate and focus consumers and the food industry on the sustainability issues that matter. Grower representatives are already working on this and internationally standards are coming under growing scrutiny.
Watch for new standards and certifications popping up.
Key question to ask: Does third party assurance of sustainability practices add value to our offer?
Matt Loose is a Director of sustainability consultancy Stratos. You can find out more about Matt and the Stratos team at www.stratos-sts.com