The Global Food Supply Chain in Flux

Current models are unsustainable, but new innovations offer promise.


Yet, “Sourcing will only become more complicated as the restaurant chain’s expansion continues,” states the article. “Lebanon, for example, requires that imported products come directly from their country of origin; if the Cheesecake Factory uses shrimp from Mexico, the shellfish must come to Lebanon directly from Mexico.”

In the U.S., the food supply chain is under pressure to deliver fresher, healthier food in greater quantities. More shopping is also taking place online, notes Elliott Grant, CTO and founder of HarvestMark.

“Millennials are more likely to shop through a variety of channels—and they aren’t going to drive to a store just to stand in line; they will happily shop online to get the choices they want and wait for a delivery tomorrow. Currently, bricks-and-mortar retailers carry a few thousand fresh produce SKUs in their stores. Online grocers could carry 100,000,” he writes in Fresh Produce 2020: How four forces are creating unprecedented opportunities for value creation and capture in the fresh produce industry.

And while food supply chains are getting longer and more complex, they are also getting shorter and simpler in some respects. A recent survey by consultancy A.T. Kearney found that 70 percent of shoppers polled are willing to pay more for locally sourced food based on their desire to “buy local” and support environmental sustainability. Nearly 30 percent said they would consider switching stores if locally produced food was not offered. Those surveyed also indicated that they would spend more for locally produced food if grocers provided better education on the origin of the food.

 

An intelligent response

Few would argue that a measured and meaningful reduction in greenhouse gas emissions is absolutely necessary in order to feed the planet in the coming years. At the same time, the food industry and various agencies are mobilizing to address the many challenges, whether it’s how to reliably and sustainably produce more food and/or to reduce food waste.

In 2007, General Mills launched the General Mills Worldwide Innovation Network (G-WIN) to encourage collaboration between other food companies and the academic community to address threats to natural resources (water, arable land and energy) as well as food safety and food waste. Jeff Bellairs, senior director of G-WIN, has been helping to promote the group’s agenda via the press and speaking engagements, most recently at the Food Vision conference in Cannes, France this month.

At a U.S. State Department conference this year, attendees from the federal government, non-government organizations and the private sector gathered to discuss ways to fight post-harvest food loss in developing markets. Jose Fernandez, Assistant Secretary of State in the Bureau of Economic and Business Affairs, highlighted the success of the U.S. Agency for International Development’s (USAID) “Feed the Future” program in Rwanda, which was instrumental in establishing a massive storage facility in that country that will help reduce post-harvest losses in beans and maize. In addition, a State Department grant was awarded to a U.S.-India partnership for solar powered refrigerated storage vehicles. This was an important development considering that India’s poor cold chain infrastructure leads to spoilage rates of up to 18 percent for fresh produce. USAID is also working with food company Land O’Lakes to assist dairy cooperatives in Uganda to become more competitive.

Technology is playing a bigger role in food production, too. The Dutch company TerraSphere uses satellite and UAV (unmanned aerial vehicle) imagery to give farmers detailed information on their crops, which can be used to make precise decisions regarding the application of fertilizers and pesticides.

Throughout the developed world, more attention is being spent on issues such as reducing food waste with smart labels that monitor freshness, better packaging, portion control and overconsumption by consumers, and more responsible merchandising by grocers.

There have also been radical advancements related to food production. For example, San Francisco-based startup Hampton Creek Foods is attracting some high-profile interest from Silicon Valley venture capitalists, and even Microsoft’s Bill Gates, over the company’s Beyond Eggs product. The non-dairy egg substitute is made of plants, is about 19 percent cheaper than eggs, has a longer shelf life and is safer for consumers than the real thing. Most importantly, it consistently passes the taste test among those who try it.

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