The article reviews the potential of using insects as a food source to complement the traditional food production in order to meet the needs of the increasing world population.
Here are the main points.
The nutritional quality of insects is high. They are a source of protein, fats, minerals (especially iron and zinc) and vitamins.
The production performance of insects out performs the one of traditional livestock, with a feed conversion ratio (number of kg of food to produce 1 kg of insect) ranging between 1 and 2.
There are already 1,400 species of insects consumed regularly in Africa, Asia and Latin America. Among the favourites, they name beetle larvae, ants, caterpillars, locusts, crickets, silkworm chrysalis, scorpions and spiders (although the two latter ones technically are not insects).
In most cases, insect consumption is the consequence of food shortage, but there is also a festive consumption of the bugs. The author mentions that in the old Roman Empire, caterpillars were a delicacy. Of course, in some Western countries, some restaurants offer insects at a premium price for a certain self-proclaimed sophisticated elite… After all, a lobster looks very much like a large aquatic bug.
Another interesting potential for insect is to use them as a raw material for fish feed. Currently, fish feed is made of increasingly expensive raw materials, such as fish meal, fish oil and agricultural commodities, for which they compete with human consumption, use for feed destined to other farm animals. For many fish species, insects are a natural source of food.
There are talks about organizing the first congress on insect as afood source as early as 2012.
Now that the publishing company is working out the final details before the release of the book, time has come for me to spend some time again on the blog part.
During the making of the book, I have been asked about my opinions on a number of subjects. Listing opinions was not the theme of the book, but the blog is a good vector for this. In the course of the coming weeks and months, I will review as concisely as possible specific subjects, present which areas require attention and how I believe the topics will evolve in the future. If you have any request, please let me know.
In addition to these articles, I will develop new topics for seminars and conferences that relate to the book and that offer matter for reflection to the attendees. I also will introduce new modules aimed at improving organization and efficiency of –and within- food value chains. The purpose of these modules will be twofold. They will help participants understand the broader picture, and they will help improving the functioning and the performance of business relationships. This is not only about economic performance, but also about technical, environmental and social performance.
The editing of my book “Future Harvests – The next agricultural revolution” is about completed. All that is left to do is developing the cover and start the publishing.
I have already received orders, even before the book is out. That is quite a good sign. And a great surprise for me.
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Video #1: The Fundamentals (duration 2:37) – Introduction to the background and fundamental principles mentioned in the book “Future Harvests – The next agricultural revolution” to achieve food security for 9 billion people in 2050. Topics such as demographics, the shift in economic power, the control of food and food security strategies are reviewed. Sustainability, innovation, efficient market driven food production and strong leadership are required.
Video #2: The Actions (duration 2:12) – A short review of some of the actions mentioned in the book to achieve the objectives. Solving the water challenge, finding new land for production, urban farming, hydroponics, farming the desert, rebuilding fisheries and developing aquaculture further are all possibilities.
Video #3: The Questions (duration 3:08) – A sample of some of the questions raised in the book. They cover technology, land deals in Africa, improving yields, restoring soil fertility, change in consumer needs, organic farming, risks of conflicts, biofuels or meat are some of the topics presented.
Over the last few months, I have been working quite a bit on writing this book about the future of agriculture.
I must say that compiling in one book a wide range of topics that, without any doubt, will be part of the future of our food production has been an exhilarating experience.
From demographics in full motion to the latest in technology, we can envision many different scenarios to set up the most efficient food production possible, as local farmers, industry NGOs and governments will need to find optimal solutions with the land, the water, the labor force and the capital available to them. Water and soil will be of vital importance, and their proper management is essential for the stability of many countries.
In the future, there will be no room left for wastage and inefficiencies, or we all will be punished if we get complacent. Similarly, we will need to change our thinking and accept that solving future problems will not be about transferring a one-fit-all model to very diverse situations. We might have had the illusion that it once worked, but it actually did not. We will learn from the mistake of the past to perform better. Sustainability is not an option; it is the only choice, because per definition what is not sustainable is doomed.
As food is a necessity, and since when we share between 9 billion people there is less left for each of us than when we shared between 4 billion, efficiency will be paramount. This will affect food prices and social stability. Technology is necessary but it is not the panacea in itself. The most needed resource for the future is strong visionary leadership to help us develop the plan for the next decades.
Let’s prepare ourselves for a deep change and we must accept the idea that we might have futuristic farms run by robots, satellites and computers in some regions as well as local urban gardeners in the heart of the cities, where 70% of the world population is expected to live. We will have small organic farmers and we will have large industrial farms using genetically engineered crops, but we also will have large highly efficient semi-organic farms that will combine the best of both worlds. We still will have specialized farms as well as mixed operations. Hydroponics and aquaponics will grow substantially in the future.
Today’s diet will be revisited and excesses will be out of place. Should we become vegetarians or do we simply need to eat less meat? Will aquaculture live up to the expectation and become the main source of animal protein? You will find out in the book.
Countries will have to think on how to guarantee food security to their populations. If it is not done well, this challenging task might end up in serious conflicts. Foreign and private investment in land and farming will continue in Asia and Africa. If managed properly, they will bring much prosperity to these regions, but if not managed properly, then we can fear the worst.
All these topics and many more will be presented in the book and I hope that it will help readers to understand all the variables that are at play, as well as it will help them get a more objective view of many controversial topics such as GMOs, nanotechnology or in-vitro meat. Once readers will have finished the book, they will be able to figure out whether and how we can feed 9 billion people. Thanks to examples from all over the world in as diverse countries as Uganda, Kenya, the USA, China, Indonesia, India, Brazil, Argentina, France, The Netherlands, Cuba, Kazakhstan and many more, we discover a myriad of different situations and solutions that illustrate human ingenuity to produce food.
However, for now just a few more months of patience as I need to get through the process of publishing.
Hormel Foods issued a press release yesterday about their packaging waste reduction program, and the amount of packaging material that they saved is simply impressive. Reduction covers cartons, paper sleeves, thinner glass jars, plastic trays or shrink-wrap.
Not only this program has a direct effect on the packaging of Hormel products, but it indirectly also saves a lot of resources, such as a significant reduction of paper fiber, less trailers on the road using fuel and less petroleum for plastics of all sorts.
The only detail that do not mention in their press release is the money savings. You can be sure that they would not go through all this effort if it was not bringing significant savings.
Economy meets environment and vice-versa. This only proves that common sense and a clearly defined strategy deliver positive results.
Coca-Cola will start selling its beverages in a special bottle, called the PlantBottle, which is made from PET plastic and from plant-based materials by the end of 2010. A first launch will take place in Western Canada during the Olympic Games held in Vancouver, BC.
In the US and Canada, the bottles will include 30% of plant material, and the bottles are 100% recyclable. The biological material will come from sugar cane by-products, originating from the production of ethanol, mostly from Brazil. Including this material in the PET plastic reduces the carbon footprint of the bottles, and reduces the dependence on oil-based materials. The benefits are both environmental and economic.
The ultimate goal of the company is to produce bottles that will be made of 100% non-food plant-based materials such as wood chips and wheat stalks.
Hopefully what Patrick Holden, director of the Soil Association is advocating in this article will come true.
It is high time for the partisan debate to end, for both sides to recognize that they do not know it all, and they both can learn a lot from each other; and for all of us to make the right changes. Yes industry, there will be changes, and some profound ones that will reshape your landscape. And yes environmentalists there will be changes and you will not have all that you want because eating is not an ideal, it is a necessity.
Here is an interesting article about how Uruguay works towards a healthier future.
Not only does the country invests a lot in renewable energy but it works in improving its beef, too.
Uruguay’s 100%-traceable, hormone-free, grass-fed beef farming is offering many answers to the concerns of today’s consumers, and the system rewards the farmers doing the right thing, too! Read the article at http://www.benzinga.com/36898/hamburgers-in-montevideo
Not the largest producer, but certainly among the smartest.
Sweden has started presenting the carbon footprint of food on the labels for food products sold in supermarkets and on some restaurant menus. The Swedish National Food Administration is managing this program.
Last week a survey was published in the US about whether fast food customers were using nutritional information to make their choice. The result was that although they could read how many calories their meal would include, they did not choose for a healthier lower calorie meal.
Apparently, this was a shocker. It was not to me, and this for a couple of simple reasons. First, people do not go to a fast food restaurant to nibble on a knackebrod. Secondly, information disclosed is never enough to make people change their habits, especially if they have a craving for what they buy. Otherwise, why do some people still smoke when they can read in big letters on the pack that it will kill them?
Parents play a crucial role in getting good eating habits
If we want to make people change their eating habits, information is necessary, but by far not sufficient. When it comes to food, we are dealing with many complex issues that have to do with psychology and with taste and a behaviour that we have acquired at a very young and developed as we grow up in the environment that our parents have provided. Further, we all know how skillfully marketing has use these psychological “weaknesses”.
In the US, there is currently quite a debate on health care and obesity is one of the main issues. In many ways, our eating habits are a reflection of our life style and of our society, as I have mentioned in my article “If we are what we eat, what will we eat in the future?” Therefore, trying to induce a change in our eating habits can only succeed if we make broader changes in the way we live.
Next to information, what consumers need is education. Unless they have an understanding of what the data they get really means, how can we expect them to act upon it?
Teaching children about nutrition will help them eat properly
We need to teach children about the basics of nutrition and of metabolism as early as possible, and this education must include their parents, too. There is no big mystery behind what causes obesity, diabetes and other food excesses related ailments. It is quite easy to explain what functions the different food groups fill and how to compose healthy meals, as it is really just a matter of adding up and keeping the right proportions.
It would be highly useful to educate everyone about where food comes from and how it is produced. A program like “Know your food, know your farmer” introduced in the US is useful, but “Know your farming” is just as needed.
What parents also need to understand is that it is their duty to give their children a balanced diet, although it might mean that they, too, should have one, but most importantly, when it comes to decide what is on the table, the children do not dictate what they want simply based on what they like.
Education, though, goes much further than just parents and schools, and retailers, restaurants and the agribusiness need to co-operate more than they currently do, even though some are more active than others in this field. If we want to solve a society problem, the whole society must participate. It is rather interesting to see how the meat industry in the US is reacting to the proposal of a meat-free Monday in school cafeterias. I can understand the resistance to government intervention in telling how people should feed themselves, although when this leads to many health issues, one could argue that if the people cannot make the right choices, maybe someone else should set stricter rules to help them. I also can understand that such a meat-free Monday is a bit threatening to the meat industry, as it means (a tiny little) bit less business in the short-term and maybe quite a bit more if it meant that the next generation might cut on meat consumption. On the other hand, what the meat industry in developed countries needs to realize is that there are plenty of people in other countries who are longing for meat, and these new markets have more than the potential to replace the volumes lost in their domestic markets.
Another great source of information is consumers’ organizations, like the ones I know in Europe. They are independent and they provide many surveys and comparisons on consumer products. They have been very useful in helping consumers gain more awareness about what they consume. Unfortunately, such open and objective information is not directly available in all countries and this is a weakness in the fight for health.
Copyright 2009 The Happy Future Group Consulting Ltd.
Food waste is one of those topics that rarely make the headlines while the numbers that come out surveys are simply stunning.
40% of food production does not reach the plate
Five years ago, the University of Arizona had published a report about the situation in the USA. Their estimate of food waste was almost that 50% of the food produced in the US never gets eaten. Although some losses are inevitable in the supply chain, their report estimated that 14% of the food bought but American households are thrown away, and even 15% of that amount is sent to garbage without even being opened. Not only, this is lost food that could have even eaten, but also the environmental impact of food waste is far from negligible. According to the University of Arizona research, cutting half of the food waste would reduce the environmental impact by 25%, because of reduced landfill use, soil depletion and application of fertilizers, pesticides and herbicides. Recent USDA studies indicate a level of 25% of food that never reaches a plate.
In the UK, research by the government’s waste reduction agency, WRAP, found that one third of all food bought in Britain is thrown away – of which half is edible! I read an amazing statement from Liz Goodwin, WRAP’s chief executive in a 2007 article from The Guardian: ‘If we stopped the amount [of food waste] that we could stop, it would be the same as taking one fifth of cars off the road.’ About a third of the food waste in the UK comes from households, food manufacturers account for about 20%, food service and restaurants for about 15%, and retailers just under 10%.
In Australia, it is estimated that food waste makes up half of that country’s landfill!
At the global level, estimates of food going wasted are that over half of the food produced globally is lost, wasted or discarded as a result of inefficiency in the human-managed food chain, finds a new study by the United Nations Environment Programme released in early 2009.
According to UNEP Executive Director Achim Steiner “There is evidence within the report that the world could feed the entire projected population growth alone by becoming more efficient while also ensuring the survival of wild animals, birds and fish on this planet.” This statement is a nice illustration of what I was presenting in my article The transition from a consumption society towards a maintenance society.
Let’s check if this is correct:
Today’s food production being 100 with waste of 40%, means that we actually consume 60. FAO claims that food production needs to increase by 70% to meet the needs of the population in 2050. This means available food must be 60 x 1.70 = 102, compared with 100 gross production currently. With no waste, Achim Steiner statement sounds consistent and correct!
If this is not food for thought, I do not know what is. Nonetheless, this is definitely a part of what we need to address for the future of food supply.
Copyright 2009 The Happy Future Group Consulting Ltd.
The more as read about new certified sustainable foods sources, the more I start to wonder about how really sustainable they are. As I have mentioned before, I believe that sustainability is the only way forward because, per definition, what is not sustainable has no future, but I am beginning to have doubts about the credibility of some certification schemes.
There are two things bothering me:
I thought that I had heard something about fisheries collapsing all over the world, but it sounds like more and more seafood is sustainable, and in such quantities that large retailers can offer it. Almost every week there is at least one new certified fishery and many more to come from what I hear. Does this really add up?
Sustainable foods seem to follow the same logic as the consumption society that has brought us in such trouble already. The message seems to be: consume more of it because it is sustainable! I just miss the “consume with moderation” message.
Clearly, certifying sustainable food is a business, and definitely a big business growing further. Moreover, the more food programs certified, the more captive audit customers, therefore the more revenue, it produces.
In addition, it is very clear that there is a lot more “green” talk in business and marketing than actual improvement, at this stage.
Sustainability is a very serious matter, and therefore it is of the utmost importance that certification standards are above any suspicion. Only their credibility will allow us to make the proper progress towards a better future.
Funding and accountability to consumers are two important tools to guarantee such high standards and integrity. I like France’s Label Rouge model, because certification is carried out and supervised by the Ministry of Agriculture, therefore funded and accountable to the French people, their consumers.
Copyright 2009 The Happy Future Group Consulting Ltd.
This news is a beautiful confirmation of what I am announcing for the future (see my remarks in “Nutrition basics should be taught in school” and “The dining of the future“) about the need and the coming tools that will help people know more about agriculture, food and health, not only the educational tools, but also the software and/or website that will allow them to set up their own diet and make their own “educated” dining choices.
This article reports of Mr. Yiannas (VP Food Safety at Wal-Mart) speaking at the Grocery Manufacturers Association’s Executive Conference in Colorado Springs, Colo., and his views on this topic.
It just shows that there is a new trend coming in the US, as I happened to describe in my article of yesterday (Health and environment as the drivers of food production). There are growing concerns from consumers and the retail will probably be the catalyst for change. Wal-Mart as the leading retailer is going to pave the way forward, just like it does on sustainability. This certainly is going to mean some deep changes in the way the suppliers will have to run their businesses.
Health concerns will gain more importance in the future in the decision process of consumers when they buy their food.
More and more, we can hear and read about concerns and even rejection of the current production systems. Although this bad publicity is not always based on the most objective facts, it has been able to find a growing audience.
It must be true, it was in the newspaper
Since most consumers have little or no knowledge of agriculture and food, their only source of information is in the popular media. On the other side of the discussion, the agri-food industry is not getting through, because its message tends to be too defensive and too technical. Unfortunately for the industry, errors from the past (for example, the use of DDT) or cases from other industries (for example, tobacco) contribute to cast a shadow on its credibility. As I wrote my previous article “Less controversy thanks to transparency”, the agribusiness will achieve much more by opening up and having consumers visit their premises so that they can tell what they saw. They must organize more Open House days.
Therefore, for now, consumers have a certain perception of how food is produced, and it is not so relevant to argue whether this perception is correct or not. Perception simply is reality, and consumers act according to what they believe is true. There is a growing concern about environmental and health aspects of food production. About the environment, you can list very diverse things such as the depletion of wild fish stocks in the oceans, the interaction between aquaculture and wild fish stocks, manure and smell of intensive animal husbandry and impact of manure on soils and drinking water, deforestation of rainforest for ranching of beef or about growing GMOs (Genetically Modified Organisms). On the health side, consumers worry about food poisoning due to bacteria, such as E. Coli, listeria, campylobacter and salmonella, but also about residues of pesticides or antibiotics, as well as they worry about the use of hormones in animal productions. As the discussions get more animated in the US about the reform of health care and the cost of obesity, more and more people are wondering about whether the fast food diet is a proper one. Next to this, animal welfare is a growing concern by more and more consumers.
The answer to many of these worries has started to appear in the last few years with the growth of the organic market segment. When we see the growth and the performance of a retailer such as Whole Foods, there is no doubt that organic foods have a growing audience.
The concerns about the environment are forcing retailers, food service and businesses involved in the production chain of food to make changes. Some of the actions they have taken can be seen as marketing or PR, but they also have become mainstream. Just a look at how many restaurant and supermarket chains have already implemented sustainable seafood programs indicates how serious this change in consumer attitude is. Fast food chains are also actively working on reducing their environmental impact and set standards on where they source their meat, based on environmental concerns, such as no beef from ranches deforesting the Brazilian rainforest.
In the past, we have seen some examples of production methods that had to be abandoned, simply because no solution to cope with environmental problems could be found. This has been the case in The Netherlands where the level of intensification caused such manure surpluses and risks of animal disease to such a point that after many years of looking for viable technical solutions in vain, the government decided that the size of the national herds had to be reduced.
Similarly to what happened in Europe over the last decade, we can expect that much stricter rules in the use of antibiotics will be applied, and I expect a similar trend to a progressive elimination of the use of hormones in animal husbandry. About animal welfare, there should not be any surprise the day that only husbandry systems that allow enough “recreation” area for animals will be allowed. All of the above is going to have an impact on how and where food is produced. Systems will become less intensive, and progressively we will see more techniques to improve efficiency to compensate.
Past Food?
As I also had mentioned in another article (Future price of fish and meat: up), it is simple logic that with more people to feed, food is going to become more expensive. However, the relative prices of various food products also need to go along their relative health benefits. Today, it looks like only wealthy people can afford a healthy diet, as the price of “good” food is substantially higher than the price of what makes a nutritionally unbalanced meal. This clearly does not work in the direction of a healthier population at large.
The way consumers think will define the way we eat and produce our food. Many changes in consumption patterns, in production systems and in product offering are under way. I will get back later with more details on what my views are on this.
Copyright 2009 The Happy Future Group Consulting Ltd.
With the current development of software and technology on the one hand, and all the concerns that consumer express about food, health and environment, on the other hand, I believe that it is only a matter of time before we all can have the information and tools we need to make our own eating (and nutritional) choices.
May I eat this?
Today, we have nutritional information on all food items labels, but few of us use it much. This could soon change.
As many among us have computers at home, we can expect software to come on the market, and maybe even already installed with the computer at purchase, that will allow us to determine and set up our own diets.
Already numerous websites have interactive programs telling you, depending on your weight and life style, how many calories you should eat per day and other websites help you calculate the nutritional value of your meal if you enter the quantities of your menu’s components.
In animal nutrition, optimization programs to compose the feed ration by entering the nutritional value of the different possible ingredients and set limits to the level of inclusion of some ingredients based on nutritional and technical parameters have been in use for many years. Last, but not least, these programs also include the price of the different ingredients, so that the best-balanced “meal” that meets the nutritional needs can be composed at the lowest cost possible.
Therefore, it is just a matter of time before we all can have at home a system that will take into account, or weight, our age, our level of physical activity, our health risks and calculate for us what our meals could be made of and how much we should eat, depending on which menu combination we would like to have for that particular meal or day. The nutritional information could be either from a database or directly transferable from the nutritional value label present on the food packaging we bought.
Following the same idea, I expect most restaurants to present their menus with thorough nutritional information on the side, in a similar way as food labels show, with indication of health benefits or restrictions. There also would be the possibility for a customer to enter their personal information to have the meal tailor-made for them, with probably the relevant price adjustment when needed. All of the above includes of course the drinks as well, as they definitely can contribute to the overall nutritional value of the meal.
Any action encouraging healthier eating will be supported by the government and by health insurances, which should help accelerate the introduction of such programs.
As environment and sustainability are among the main concerns of consumers today, I expect food items in the retail and the dishes on restaurant menus to include environmental information, similar to the ones mentioned and appearing on the label shown in my article “Environmental performance on food labels“. Today, a number of restaurants have already joined programs setup by MSC (Marine Stewardship Council) to indicate they serve only sustainable seafood. Seafood is probably just the first item that will be followed with similar information and programs for other food sources.
We have entered the era of information, and we will eat accordingly.
Copyright 2009 The Happy Future Group Consulting Ltd.
We all have heard about this rule across all industries, including agriculture and food. Eighty percent of the food would be produced on 20% of the farms and vice-versa. If it still applies in the future, it can indicate us how our food production and supplies will look like in the future. Of course, this is always a theoretical exercise, but it is quite convenient to elaborate on our thoughts.
As the population is expected to grow quite strongly in the coming decades, especially in urban areas, this could indicate two dominant trends:
• Further size increase of the largest farms and further industrialization of agriculture and food for global markets, although the number of farms in this segment would not increase strongly.
• Strong increase of the number of small farms involved in specific value chains and strongly linked with their local economy.
Industrial agriculture This group will continue to be involved in mass production of commodities for global supplies, like this is the case today.
Yet, they will face an increased pressure to adapt to the requirements of sustainability, which technically is quite possible. New systems and more efficient technologies will be the pillars of its growth and development. They will have to find ways of reducing the amount of chemicals in crops and the amount of pharmaceuticals in animal productions
The requirements for capital will be quite high and the sector will be led by increasing larger corporations, by an increasing level of capital by large private investors and, last but not least, by some governments. This agriculture will innovate further and will be developed thanks to this capital. It will use automation and mechanization to reduce the dependence on labor. Mergers & acquisitions will continue in the agricultural sector and a few large blocks will remain, dominating their sectors.
Their mandate will be about more control the natural conditions of production and about reducing to a minimum their impact on air, water and soil, by using less polluting transport methods, water preservation, effluent treatment and soil preservation. They also will have to engage in maintenance of their environment.
The role of this type of agriculture will be to bring to market large amounts of affordable food for the masses, and should play an important role in strategies around food security, which is where corporations and government will interact on a regular basis.
Local food value chains This sector should undergo a strong growth and be build in a market-driven approach. These are the farmers that produce specialty products aimed at serving either a very specific segment of the retail or foodservice market.
This trend, which has been already initiated around concepts such as organic or authentic, will evolve into a more integrated local economy, and the initial concepts will probably become less differentiated as food production in general, be it industrial or traditional, will use more sustainable techniques.
Contrarily to the common belief, this agriculture will be developed thanks to very efficient techniques, but will be centered relatively more about labor and relatively less about capital. In this case, efficiency does not necessarily mean intensification.
We must not underestimate the significance of this part of the food production, as it will play an important role. However, we must not expect this type of agriculture to be the solution to feed the world, and this is not the purpose of the farmers involved in such food production chains.
This type of farming will grow in two different environments:
In “developed” countries to serve a increasing, but aging, population more demanding about the origin and the production methods, and who is ready to pay a premium for the perceived better quality. The angle will be about quality, transparency, sustainability, traceability and as close to zero a use of chemicals and pharmaceuticals. In some areas, it could help strengthening a local economy and local communities.
In emerging countries, the development of a local agriculture, and aquaculture, will be a key driver of economic development for under industrialized and/or under urbanized regions. It also will be a way of slowing down the migration of population to urban centers and limit social problems, by creating satisfying economic conditions and by securing food supplies locally. This farming will be about basic needs, before marketing.
Copyright 2009 The Happy Future Group Consulting Ltd.
The agribusiness and food industry come regularly in the media with some bad publicity. As such, it does not differ from other industries, as criticism comes with the territory.
What is unfortunate is that the agribusiness mostly responds to this in a rather defensive manner, either by attempting to bring rational scientific facts or by denying the facts that their opponents bring forward.
Criticism of food and food quality is not new. When I started my professional life, I had been lent a book about how food in general, and animal husbandry in particular, are perceived. The introduction of this book was a long complaint about the quality of bread, and by then (in the mid 80’s) the arguments presented sounded quite familiar to me. The funny part of it was that in fact this text was, according to the author, a report written in Ancient Egypt, some 3,000 years ago.
Although bad publicity and criticism are obviously no novelty when it comes to food, it seems that the industry has a hard time fighting this battle.
As such, criticism is not a bad thing as long as it is not done in bad faith with the only purpose to bring damage. There is nothing wrong with consumers being concerned about the quality of the food they eat, and about the way it is produced. Being worried about whether and how antibiotics or hormones are used, about the potential problems to the environment linked to intensive production is quite legitimate when you are rather ignorant of production techniques. After all, nobody has ever claimed that any industry was perfect, and business is always work in progress. It is utmost important for all of us to have watchdogs in order to make sure that we do not get into excesses that can lead to irreparable damage.
Let’s also realize that only a tiny minority of people now work in agriculture and that most city residents have a very limited, if any, knowledge of how farms are operated. On the other hand, they have very strong, often idealistic and romantic, opinions on how they think farming should be, regardless of whether it is viable or if it can provide them enough food. Surveys with city kids have shown that many of them do not make any connection between eggs and hens, or between milk and cows and calves. For many, it is not even a clear fact that in order to get meat, one has to kill an animal.
Further, it is human nature to pick on the big guy, as we all love the story of David defeating Goliath. Moreover, bad news, the more sensational the better, always get more attention than good news, like the recent article published in Time. There is nothing like fear to get people glued to their TVs or reading reports in the papers or on internet. These psychological traits are quite difficult to deal with.
The problem with defensiveness, when dealing with bad publicity, is that it always brings the defendant in an awkward position. If this not handled properly, it can very easily come over as suspicious, which reinforces the poor impression.
In my opinion, the only proper way forward about information on agriculture and food is transparency. Only transparency can eliminate (or at least reduce to a minimum) negative publicity. Only by being candid and open about the way food is produced, can the agricultural community inform properly the public.
Remember that issues around food production are highly emotional, as they deal with much more than just nutrition. This is why responding with rational arguments has so little effectiveness. First, emotional concerns must be dealt with as emotions, not merely with cold scientific facts. Only once the emotional connection has been established, it is possible to bring the communication to more rational aspects and facts.
The better informed the public is, the easier it is to also discuss and address issues that come along the way. Candour is only the first step, the clearly expressed will to always improve the way food is produced is absolutely necessary, and this is not about vague promises. It must come with an open agenda of issues that the industry knows about and is (and will be) addressing without complacency. A clear commitment to a plan of actions with defined time lines is the best way to create and restore trust with consumers. And the best way to score in this is by taking the initiative and the lead. The industry and this includes any participant in the production chain and its watchdogs, from breeding to retail, needs to make these decisions, instead of having to react to changes in legislation, which very often is the result of pressure from the public opinion.
Copyright 2009 The Happy Future Group Consulting Ltd.
Sustainability is a bit like quality: everyone talks about it but few give a clear definition when it comes to practical and concrete specifications. Just as importantly, leadership is badly needed to transform the talking into effective action.
As long as the lawmakers remain slow to bring up the change and the clarity to give clear directions, we will need the leadership of some of the most influential players in consumer markets to get things moving.
Even environmental organizations and sustainability bodies have some difficulties to agree with each other. For example Greenpeace does not seem to think that the guidelines from the Marine Stewardship Council offer solid enough guarantees that products brought to market according to these guidelines truly are sustainable. Clearly, this is an area in continuous evolution and the ideal concept is still in the making.
The consumer themselves are both still under informed as well as overwhelmed by all sorts of contradictory messages to know clearly which choices to make, therefore some decide of what to buy either based on philosophical or on financial reasons.
Similarly, many businesses are trying to find their green way as they can, but there again the lack of a strong regulatory frame and the uncertainty of the return on the green investment do not help them. The result is that, although the awareness about sustainability among businesses has grown substantially over the last few years, many companies have taken rather timid steps so far, limiting their actions to the least costly possible and the most PR and marketing-driven. They claim to go green, they communicate a lot about it, but the progress is slow.
Yet, some companies take more initiative, show leadership and push to make the whole supply chain evolve to sustainable production systems. A very active sector in this area is the retail. Retailers in the UK such as Tesco or Waitrose, in Canada with Loblaw’s and Overwaitea Food Group, and of course especially Wal-Mart in the USA have definitely made their choice. They clearly understand that the future cannot be anything but sustainable and they are demanding that their suppliers now come with products that meet the requirements of tomorrow. Last month Wal-Mart demanded from all their suppliers to “develop comprehensive programs to promote sustainability and transparency – or else contemplate a future without Wal-Mart as a customer” (read article).
Tesco is now indicating the carbon footprint of milk products on the labels (see article “Environmental performance on food labels”); Waitrose, Loblaw’s and Overwaitea are going for sustainable fish products, adopting for example the SeaChoice specifications as their guideline. Wal-Mart stores have already implemented a number of measures to reduce their carbon footprint by reducing the energy consumption, and they have already have made some of their suppliers introduce different product presentation. For example, they were the first to demand laundry detergent to be more concentrated and packed in smaller containers. This saved water, it saved energy used to transport useless water, and it saved plastic used for the jugs and for the pallets on which the product was transported. Today, concentrated laundry detergent in smaller jugs is the standard. Without Wal-Mart pushing for the change, we probably still would use the old product in the old packaging.
Copyright 2009 The Happy Future Group Consulting Ltd.
This article addresses a number of very interesting and valid points, such as the possibility to move to better farming environment, or getting farms closer to consumer markets.
Having the ability to change location has several advantages. It allows finding areas where water quality is better as this varies with seasons and climate conditions. It also can allow farms to move away from the routes of wild fish and substantially reduce risks of disease and parasite contamination and spreading. Being closer to consumers market also has the advantage of reducing the amount of transportation and have the fish brought to market faster, therefore fresher, theoretically.
However, this article does not address a number of important aspects of fish farming. Going far offshore brings some organizational issues, such as rotating the crews working on farms, or dealing with rough weather. Probably some fine tuning would be needed to organize feed deliveries to such farms as well and the mobility must not happen at the expense of the life of equipment or the functioning of cameras and computers used for management purposes. As such, nothing that cannot be resolved, but it would come at a cost as well. Then it is to the farmers to weigh the pros and cons and make their decision.
Nonetheless, this is an interesting idea that shows that this industry is in full evolution and is adapting to the future.
This is quite an interesting development, as it would allow consumers to make their purchase decision based on the environmental impact of what they buy. It also would make retailers and producers more aware of their own business decision, be it for sourcing products or choosing their markets.
Of course, an other very important next step will have to be consumer education about carbon footprint numbers and how to read them, but this learning process was also necessary with nutritional information.
I see this as a very good initiative to identify and segregate sensible products from the not so sensible ones. Very likely, we will see more labelling about environmental information in the future, and not just for food products, but all consumer products.
A recent study from the UK concluded that organic foods are not nutritionally superior to “regular” foods. Of course, it did not take long for reactions to be published. The pro organics reject the protocol used and therefore the conclusions. The pro “industry” reacted satisfied. All of this is not surprising, and for a simple reason: people choose their foods greatly based on psychological reasons. Let’s face it the debate around organic food is largely about lifestyle and choices.
However, is the result of this survey a surprise? Not really, because in terms of nutritional value, the differences in production systems are not that different. When it comes to food safety, especially residues of chemicals, then it probably is a very different story.
What can affect the nutritional value of foods are the growth period and the timing of the harvest. Produce that grows fast and that is harvested before full ripeness contains relatively more water and therefore there can be a dilution of nutrients per kg of product. This is also true for meat products.
I do not believe that the real debate between” organic” and “industrial” should be so much about nutritional value as it should be about food safety. As consumers get more educated and have more choice, they will give the preference to something more natural and harmless, simply because it is common sense and the safe thing to do. On the other hand of course, agriculture must be in a position to offer affordable products. Organic foods are more expensive and this is what limits its market share to mostly well-off city residents.
If organic foods want to become the standard to feed people, it will have to work on its production costs and price. Retailers are playing a very important role in this, as they more and more dictate to suppliers how food should be produced. This is currently very obvious with seafood and the requirement set by supermarkets to buy only sustainable seafood.
My expectation for the future is that retailers will get more involved in agriculture and will impose on suppliers more restrictions on what kind of products they may use for crop treatment, more restrictions for better animal welfare. The market standards of the future will become “sustainable”, “natural” and “traceable”; not for emotional reasons, but for rational reasons. There will be pain to accept for producers to meet these requirements, and in the end the commercial negotiations will decide what the market price of “natural” foods will be.
Copyright 2009 The Happy Future Group Consulting Ltd.
With a world population increasing strongly and an agricultural area that will not grow accordingly, the law of offer and demand clearly indicates that agricultural prices will increase in the future. This is true for agricultural commodities such as grains, but the increase will be even stronger for animal products, such as meat, poultry, dairy and fish.
This will be the result of an increasing and very likely quite aggressive competition between the need to feed people with the basic commodities, the need to feed farmed animals and possibly for some time the need to produce biofuels.
Since it takes more than one and even several kilograms of animal feed to produce one kilogram of meat, the feed conversion ratio (FCR) will affect by which factor the price of the various animal products will increase.
Efficient productions like chicken will be successful and will remain quite competitive pricewise against other sources of animal proteins, thanks to its low FCR, to its low water use and to the good agricultural value of its manure. In the aquaculture sector, efficient productions such us tilapia and pangasius have a bright future ahead, as they can help feed a large population for an affordable price. In general, aquaculture has the opportunity to fill the huge gap left by depleted wild fish stocks, although it will have to solve some issues in order to be successful (see my article titled “The lessons of intensive animal husbandry to aquaculture“). In terms of price, the scarcity of wild fish will make these quite expensive for the future.
Less efficient species such as pigs and beef cattle will see the price of their products increase relatively much more. Pigs also have the disadvantage of producing low quality manure, which will limit the level of intensification. However, pork plays an important role in some cultures, and therefore, it will still show a reasonable volume growth, with geographical variations.
A high FCR species such as beef cattle will probably undergo the most dramatic change. Higher feed costs, linked to a relatively high capital need will probably push a number of farmers to shift to other more efficient productions. Highly intensive systems such the feedlots will also undergo major changes, as regulations on the use of antibiotics and hormones will make them financially inefficient. Further, their high impact on the environment because of the manure will also work against them. I do not expect the 99-cent beef burger to be here for all that much longer, burgers will continue to exist, but just quite a bit more expensive. On the other hand, I can see good possibilities for specialty beef products, such as grass-fed beef, but customers will have to pay the right price for it. Grass is the animal feed that we all seem to underestimate, yet it covers vast areas of very often fragile soil, and cattle is one of the few species that can transform it into high value protein.
In the aquaculture sector, a carnivore species such as salmon will also meet its own limitations. Although, salmon feed has shifted from mostly fish oil and fishmeal to a much more complex mix of vegetal oils, this production will see its production costs rise strongly. I expect salmon to become a luxury product again.
What will a higher price mean?
There again, simple economics tell us that this will influence the level of consumption per capita. The price increase will moderate the level of consumption and the price differential between the type of protein, as well as health concerns, will cause a shift between the respective consumption of the different products. In Western countries, people consume quantities of animal products that are substantially higher than what they actually need, and this has led to many health issues. The decrease in consumption will help make people healthier, and reduce the burden of health costs in that part of the world.
In developing countries, the situation is different, as consumption trends show an increase of consumption of animal products, from rather low levels, though. In these countries, consumption per capita will increase, but will not reach the levels that Western countries have shown, simply because prices will be too high to get to such levels.
The decrease of consumption per capita that we will see in developed countries does not mean that the meat industry will get into trouble. Less average consumption per capita in the West will be more than compensated by the growth in emerging countries, where population numbers are significantly higher, and this will lead to a higher global demand of animal products. The main change is that the consumers will be distributed geographically rather differently than they are today. This also means that production will be located in different areas than today.
Just as a teaser: if Western countries consumers were to reduce their meat consumption to just the necessary maintenance needs, it would free volumes enough to cover the maintenance needs of meat for the whole population of China!
Copyright 2009 The Happy Future Group Consulting Ltd.
It presents the future of animal productions quite along the same lines as I think.
Efficiency, innovation and location will become the key components for the future.
Efficiency will act as a “natural selection” between the species farmed, as an increasing need for protein combined with a limited volume of feedstuffs and water will decide what productions can grow the most and which ones might not be able to do so. Poultry is definitely a winner thanks to its low feed conversion ratio and to its relatively high water use efficiency, pork is uncertain, and cattle will have the toughest time, although cattle is the only production that can transform cellulose into animal products, so the production systems will likely change and offer a different kind of future for beef.
Location of production will follow the location of the consumer markets. With a population increasing strongly, as well as their standard of living is improving, Asia will become a very active production area. This probably will also be the result of a need to reduce transport costs, as well financially as environmentally speaking.
Innovation, as I have mentioned in previous articles, will be a key driver for the future of animal feed and of animal productions. I am quite glad to read that the industry is fully aware of this need, and also that they see their future in “creating value” more than just “cutting costs”.
Although the conclusions of this forum are quite encouraging and positive, the next step might be the challenging one: how to turn these great ideas into systems that will work and will ensure the long term future of the production side as well as of the consumption side? It will all be in the proper planning and execution that this will succeed.
Albert Vernooij, author of the Rabobank report ‘Changing Industry Landscapes’ says “The global feed-to-food value chain has switched from being supply driven with a long-term sustainable share for each link in the chain, to being demand driven. This is placing the retail and food service sectors in the leading positions, and farmers and abattoirs (slaughterhouses) have become the weaker links”.
Certainly the retail and food service, because they are the closest to the final consumer have the best position to connect to market demand, but I disagree with his statement that the value chains are demand driven. Most of meat products are commodities and retailers and food service companies buy at the lowest price a rather undifferentiated product. Most slaughterhouses and farmers are still purely production driven, or more accurately put, volume and cost driven, instead of being profit and niche driven. Only very few value chains are really market driven, although most are marketing driven, but that is not quite the same.
This might sound contradictory, but one of the effects of globalization could very well be a new impulse for the development of a local economy, with energy as the main driver.
Let’s review a few things! One driver of globalization has been the search for low wages, therefore making corporations relocating their manufacturing units to the emerging countries. Another pillar of globalization has been the ability to transport goods across the world at a low cost, as energy has been in fact quite cheap. A clear effect of the success created by the above is an economic boom in the emerging countries, where employment has risen and where the standard of living has increased, on average. Currently, we are going through this difficult economic situation, but in the future, we very likely will face an increase in the price of oil. This is the energy effect that I just mentioned. Higher energy costs and food prices will drive inflation higher, although not to alarming levels. Nonetheless, this will be pushing wages up in the emerging countries, while unemployment will stay high for a while in the West, where the main consumer markets are. Therefore, we can expect to see the wage differential between those two groups of countries shrink, while transporting goods will become more expensive. In such a situation, it is not unreasonable to think that some manufacturing will come back closer to the Western consumers market. In addition, in the same time, emerging countries should have been able to develop a middle class that will drive domestic consumption, and thus sustain a certain level of economic momentum, even if their exports decrease in relative volume. An interesting consequence of the above would then be global trend towards a more local economy. The currently emerging countries would produce to satisfy their domestic markets and exporting lower surpluses, while the Western countries would repatriate some of the production units back home since it might be cheaper to produce and to transport goods that way to satisfy their own consumers.
Agriculture has followed the same pattern as other industries, and regions have specialized for the foods that they could produce at the cheapest cost. Of course, the cost of production and of distribution to consumers depends largely on the price of inputs, such as energy, fertilizers, animal feed, etc, but from a pure financial, and also climatic, point of view, it could not make sense to try to produce everything everywhere. Thanks to cheap fuel, the model was to go to global trade and transport foods over long distances. This is quite a change compared with the local agricultural model that dominated until the nineteenth century.
This search for the lowest cost of production will not go away, for a very simple reason. The overwhelming majority of the world population has a limited budget and keeping food affordable is an absolute necessity. We have seen during the sharp food price increase of 2008 that it would not take much to create a panic and riots, because even a slight price increase is almost unbearable for most people, especially in developing countries. This is quite a contrast with the wealthy Westerners who claim that cheap food is a bad thing, and that agriculture should be local and small-scale.
Another aspect that is not addressed very often is the actual carbon footprint of food transport. In the partisan debate, most of the arguments focus on the number of miles travelled, but they rarely look at the qualitative aspect of the transport. Depending on whether we transport food by road, by rail or on water, the results vary greatly. For instance, in Brazil, only 5% of exported products were transported by waterway in Brazil, compared to 61% in the U.S. Conversely, 67% of Brazil’s exported products are transported on highways, compared to just 16% in the U.S. In the European Union, almost 90% of the external freight trade is moved by water, and short sea shipping represents 40% of trade within the European Union in terms of ton-kilometers. As you can imagine, the consequences for the environment, as well as in terms of transportation costs differ greatly.
There are also significant differences between transporting fresh foods or frozen foods. A study carried out by Astrid Scholz, Ulf Sonesson and Peter Tyedmers on salmon showed that consuming frozen salmon transported by sea was the better environmental choice for salmon. To illustrate this, their conclusion was “If seafood-loving Japanese consumers, who get most of their fish via air shipments, were to switch to 75 percent frozen salmon, it would have a greater ecological benefit than all of Europe and North America eating only locally farmed or caught salmon.”
Another important parameter in the environmental impact of the distribution of food is the filling rate of the transportation unit. An efficient fleet of trucks that organize back transport for other goods is more efficient than a small truck used by a farmer to bring his products to the city’s farmers’ market 400 kilometers away and who drives back empty.
As you can see, in the choice between global or local, we need to think in pragmatic terms because the reality is more complex than it may seem at first.
Copyright 2009 The Happy Future Group Consulting Ltd.
The days of our consumption society are numbered. We are going to have to find another economic system to prosper in the future as it is part of solving the climate change and CO2 emission issue. Over the last 60 years, all our economy has been based in encouraging consumer demand for goods that have been produced with relatively very cheap energy, very cheap raw materials and as cheap labour as possible, with as cheap credit as possible. This has lead us where we are, which is a group of very wealthy nations wasting very precious resources, to the point of exhaustion and suffocation. Although some still try to resist and deny the obvious, this system is no longer sustainable and we must rethink what should drive our economy. In an earlier article, I made a reference of how previous generations used to be very cautious about what and how they consumed. The positive side of the last 60 years has been the incredible progress we have made in science, knowledge and technology, which offers possibilities unthinkable for the previous generations I was referring to. We understand our world and how it functions like never before. We have all the technological solutions to solve the climate issue, but the key is the will and the determination to change and to act. This cannot happen as long as we keep thinking the economy in terms of growth only. Growth will not go on for ever, simply because our space and our resources are limited. As there are more and more people needing more and more energy, food and other goods, the law of offer and demand will rule. Prices will inevitably go up and consumption will slow down. A new time has come. The priority must now be quality, not quantity, we must think about having enough, not having always more. This thinking is not a nostalgia to a past that also had its limitations. It is not about rejecting a market-based economy. It is about looking at the market that has always been here, but that has been pushed in the background for the easier approach of just producing more and selling it. What we will have to bring to market is not so much products as services. These services are the ones that are directly related to making all the natural and industrial cycles run harmoniously in a durable way. Just to name a few examples, I would mention all activities that are related to cleaning the damage we have caused, and recycling activities will become more and more important in our whole economy. In the same way, water treatment is going to be a crucial activity, even more so than it has been so far. Clean industries producing durable goods and services will prevail. This change will also make some jobs disappear and some appear or even reappear. As usual change always brings opportunities. It is to us to recognize them and to take them. The time has come to make the transition from this consumption society, based on wasting resources, and with no future, to a maintenance society, where wealth, and not growth, will be the economic success indicator. By acting today, we can ensure this process to happen in a smoother way than if we wait until we have no choice anymore.
Copyright 2009 The Happy Future Group Consulting Ltd.
Sometimes success stories do not happen at once. This is my feeling about cod farming. Cod products are in good demand, and unfortunately, wild stocks are in serious trouble, which leaves a huge opening in the market. So far, farmed cod producers have not delivered good financial results and opinions diverge according to whom you listen. Culprit seems to be the “market”, but this is generally a very vague and inaccurate explanation.
Feed companies initiated cod farming, as an extension of the feed business, but not as a standout business. Moreover, the volumes that have been planned initially answered to a production driven approach, and not to a market-driven approach. Production was set up for quite significant volumes, without building up a solid sales plan from an already established market position for cod products. If you read my previous articles “Be always market-driven” and “The consumer must be the focus point of value chains“, you can understand why such an approach delivered poor results.
Recently, I was browsing through the web site of one of the farming companies and, although they claim to have set up a value chain, they have not quite done so. Their value chain needs to integrate much more strongly the marketing/customer end, and I think that they need to rebalance their bargaining position with feed suppliers and customers, in order to obtain a fairer distribution of profits. Today, there are people making good money out of cod farming, but the farmers are not. Once they refocus their marketing mix to the right countries and the right type of customers, which they will have to do with a reduction of production volumes, then they can grow the business with and for the cod market by being in the driver’s seat.
Considering the demand for white fish and the depletion of the supply of the natural competitor (wild cod), cod farming’s future can only be bright. It would not surprise me if, in the future, cod farming could surpass salmon farming in production volumes. But first, one step back.
Copyright 2009 The Happy Future Group Consulting Ltd.
The past 50 years have seen, at least in the Western world, the development of the consumption society. The emphasis has been on consuming always more, by having an apparently unlimited quantity of increasingly cheaper consumption goods available. This trend happened in the agriculture and food sectors just as well, and followed a rather simple patter, actually. Mass consumption has been coupled to mass production, thanks to intensification, technical and technological progress and, last but not least, marketing.
Technical progress improved yields and productivity, while marketing was aimed at creating more, and new, needs. Our food has become standardized, industrialized, and processed in a wide variety of forms. As the emphasis moved to lifestyle and convenience, which came along with the rise of mass distribution, cheap energy and suburbia, we lost the connection between ourselves, the origin of our food and nature. Food became just things you buy at the supermarket, already packed in plastic and cardboard.
Now, we have come to the realization that this high production of waste, be it packaging material, be it blemished product that do not look good anymore while still perfectly edible, be it the overproduction of manure and its minerals, or be it the massive use of antibiotics and pesticides is not sustainable. Of course, much progress has already done to reduce this waste and there is a growing trend towards organic and traceable, but at this stage it not clear yet whether this is a true change in our behavior or whether it has more to do with a social status and marketing issue.
However, what the current situation might be, the fact that we understand that we cannot keep on intensifying and wasting the way we did, will inevitably bring a more fundamental change in how we consume in the future.
Some people predict such changes as the astronaut diet made out of pills, the use of a computer to tell us what and how much of it we should eat based on our activity level, or the tissue culture to replace meat, and many other scenarios. Will any of those ever happen? Who knows?
Personally, I believe that food as a very strong psychological connotation. We associate food with experiences and, although there are differences between cultures, that emotional bond will stay.
Clearly, the consumption society with all its excesses is coming to its end, and maybe the current economic crisis, which also originated in the excess of having it all at any cost, could very well be the turning point.
The next evolution is probably going to be a balanced approach between consumption, which we need to some extent, and the necessity of preserving what keeps us alive. There will be different graduations of this balance between geographic regions, but sustainability is the only way forward, as I mentioned in my previous article (Sustainability: as natural as balance).
Intensification is showing its limitations, waste of manure and of packaging are also hitting a wall, energy is getting more expensive and makes the production and the transport of food more expensive, too. This will reshape how we want to consume our food, how and where it is produced, how it is presented to us.
We still are in a society where some people get obese by eating lots of food as quickly as they can, while they have less physical activity than the previous generations, thanks to automation. That food is produced on intensive farms and feedlots where the animals grow and fatten as quickly as possible, as they eat lots of food, while not having much physical activity. Similarly, in our society meat producers use hormones to boost growth and carcass quality, while body builders and sport professionals use steroids and growth hormone to boost their performance. Interesting similarities, don’t you think? We are indeed what we eat.
So, in a conservation society, should we expect the farms to be led by the need to preserve? This almost sounds like the farms we had at the beginning of the twentieth century. I think that there will be some of it, but the efficiency of production as well as the efficiency of preserving the environment will be much better, thanks to new technologies. We will have high yields, and at the same time, we will have highly efficient systems to use water, to recycle waste and preserve the fertility of our soils and the balance of our oceans.
Copyright 2009 The Happy Future Group Consulting Ltd.
Here is an article (Sustainable Aquaculture: Net Profits) about a fish farm in Andalusia, Spain, which has a different angle than industrial intensive fish farms.
Of course, this farm is an example showing a very specific situation in a very specific environment, and providing seafood to the world population might require more intensive systems. Moreover, not everyone can afford to buy the pata negra category of food.
This is an interesting article, that shows that when you want to be market-driven, opportunities will come your way.
Here is the story of Canadian beef that might be sold in the EU, if the producers are willing to change their production system (by going hormone-free). While this means higher production cost, the sales price that they get makes them actually make a higher profit margin.
Regardless which link in the value chain you represent, it is essential to always consider the “big picture”. In this picture, a key element is the end of the chain: the consumer.
As the final user, the consumer will always drive the activities and the profitability of the whole value chain. Although the interaction is left over to the retail sector, the consumer’s quality requirements will trickle down along all the links of the chain. If I take the example of meat for instance, what the consumer wants will have implications all the way back to genetics, and breeding companies know how critical it is for their survival to be able to anticipate these needs, as choices have to be made several years in advance. If you are a breeder, your end product is the consumer product, not just the animal that you produce. If you are a feed company, you do not simply produce feed for the farmer, you are an important element in the acceptance (or rejection) of your direct customer’s product. Your feed becomes eventually the consumer’s choice.
Understanding the consumer is what makes successful value chains, and there is very little acceptable concession from that statement. Many companies fail because they do not listen or understand the consumer market. Pretending to do so, with help from new product development, sleek communication or fancy marketing concepts may help for a while, but it will not stand the test of the consumer. This is why commodities always sell at market price: they do not represent anything to the consumer; therefore, the only differentiation with your competitor’s commodity is the price.
Your product will flow towards the consumer market, and your information must originate from there as well. When building a value chain, always spend time understanding the final link, because it is the strongest and most powerful link!
Copyright 2009 The Happy Future Group Consulting Ltd.
Futurism is sensible thinking about the most likely and logical evolution that will take place in the years to come.
It requires analysis, understanding of the past, vision and intuition for things to come. Therefore, it is neither having a crystal ball, nor writing science fiction.
Of course, instead of predicting the future, there also is the possibility of helping shaping it...
Posted by Christophe Pelletier 
There is a growing concern about environmental and health aspects of food production. About the environment, you can list very diverse things such as the depletion of wild fish stocks in the oceans, the interaction between aquaculture and wild fish stocks, manure and smell of intensive animal husbandry and impact of manure on soils and drinking water, deforestation of rainforest for ranching of beef or about growing GMOs (Genetically Modified Organisms). On the health side, consumers worry about food poisoning due to bacteria, such as E. Coli, listeria, campylobacter and salmonella, but also about residues of pesticides or antibiotics, as well as they worry about the use of hormones in animal productions. As the discussions get more animated in the US about the reform of health care and the cost of obesity, more and more people are wondering about whether the fast food diet is a proper one. Next to this, animal welfare is a growing concern by more and more consumers.
This group will continue to be involved in mass production of commodities for global supplies, like this is the case today.
This sector should undergo a strong growth and be build in a market-driven approach. These are the farmers that produce specialty products aimed at serving either a very specific segment of the retail or foodservice market.
In emerging countries, the development of a local agriculture, and aquaculture, will be a key driver of economic development for under industrialized and/or under urbanized regions. It also will be a way of slowing down the migration of population to urban centers and limit social problems, by creating satisfying economic conditions and by securing food supplies locally. This farming will be about basic needs, before marketing.
As such, criticism is not a bad thing as long as it is not done in bad faith with the only purpose to bring damage. There is nothing wrong with consumers being concerned about the quality of the food they eat, and about the way it is produced. Being worried about whether and how antibiotics or hormones are used, about the potential problems to the environment linked to intensive production is quite legitimate when you are rather ignorant of production techniques. After all, nobody has ever claimed that any industry was perfect, and business is always work in progress. It is utmost important for all of us to have watchdogs in order to make sure that we do not get into excesses that can lead to irreparable damage.
In my opinion, the only proper way forward about information on agriculture and food is transparency. Only transparency can eliminate (or at least reduce to a minimum) negative publicity. Only by being candid and open about the way food is produced, can the agricultural community inform properly the public.
As long as the lawmakers remain slow to bring up the change and the clarity to give clear directions, we will need the leadership of some of the most influential players in consumer markets to get things moving.
Having the ability to change location has several advantages. It allows finding areas where water quality is better as this varies with seasons and climate conditions. It also can allow farms to move away from the routes of wild fish and substantially reduce risks of disease and parasite contamination and spreading. Being closer to consumers market also has the advantage of reducing the amount of transportation and have the fish brought to market faster, therefore fresher, theoretically.
This is quite an interesting development, as it would allow consumers to make their purchase decision based on the environmental impact of what they buy. It also would make retailers and producers more aware of their own business decision, be it for sourcing products or choosing their markets.
A recent study from the UK concluded that organic foods are not nutritionally superior to “regular” foods. Of course, it did not take long for reactions to be published. The pro organics reject the protocol used and therefore the conclusions. The pro “industry” reacted satisfied. All of this is not surprising, and for a simple reason: people choose their foods greatly based on psychological reasons. Let’s face it the debate around organic food is largely about lifestyle and choices.
What will a higher price mean?
This might sound contradictory, but one of the effects of globalization could very well be a new impulse for the development of a local economy, with energy as the main driver.
Although some still try to resist and deny the obvious, this system is no longer sustainable and we must rethink what should drive our economy. In an earlier article, I made a reference of how previous generations used to be very cautious about what and how they consumed. The positive side of the last 60 years has been the incredible progress we have made in science, knowledge and technology, which offers possibilities unthinkable for the previous generations I was referring to. We understand our world and how it functions like never before. We have all the technological solutions to solve the climate issue, but the key is the will and the determination to change and to act. This cannot happen as long as we keep thinking the economy in terms of growth only. Growth will not go on for ever, simply because our space and our resources are limited. As there are more and more people needing more and more energy, food and other goods, the law of offer and demand will rule. Prices will inevitably go up and consumption will slow down. A new time has come. The priority must now be quality, not quantity, we must think about having enough, not having always more. This thinking is not a nostalgia to a past that also had its limitations. It is not about rejecting a market-based economy. It is about looking at the market that has always been here, but that has been pushed in the background for the easier approach of just producing more and selling it. What we will have to bring to market is not so much products as services. These services are the ones that are directly related to making all the natural and industrial cycles run harmoniously in a durable way. Just to name a few examples, I would mention all activities that are related to cleaning the damage we have caused, and recycling activities will become more and more important in our whole economy. In the same way, water treatment is going to be a crucial activity, even more so than it has been so far. Clean industries producing durable goods and services will prevail. This change will also make some jobs disappear and some appear or even reappear. As usual change always brings opportunities. It is to us to recognize them and to take them. The time has come to make the transition from this consumption society, based on wasting resources, and with no future, to a maintenance society, where wealth, and not growth, will be the economic success indicator. By acting today, we can ensure this process to happen in a smoother way than if we wait until we have no choice anymore.
So far, farmed cod producers have not delivered good financial results and opinions diverge according to whom you listen. Culprit seems to be the “market”, but this is generally a very vague and inaccurate explanation.
Once they refocus their marketing mix to the right countries and the right type of customers, which they will have to do with a reduction of production volumes, then they can grow the business with and for the cod market by being in the driver’s seat.
Technical progress improved yields and productivity, while marketing was aimed at creating more, and new, needs. Our food has become standardized, industrialized, and processed in a wide variety of forms. As the emphasis moved to lifestyle and convenience, which came along with the rise of mass distribution, cheap energy and suburbia, we lost the connection between ourselves, the origin of our food and nature. Food became just things you buy at the supermarket, already packed in plastic and cardboard.
We still are in a society where some people get obese by eating lots of food as quickly as they can, while they have less physical activity than the previous generations, thanks to automation. That food is produced on intensive farms and feedlots where the animals grow and fatten as quickly as possible, as they eat lots of food, while not having much physical activity. Similarly, in our society meat producers use hormones to boost growth and carcass quality, while body builders and sport professionals use steroids and growth hormone to boost their performance. Interesting similarities, don’t you think? We are indeed what we eat.
Regardless which link in the value chain you represent, it is essential to always consider the “big picture”. In this picture, a key element is the end of the chain: the consumer.
Christophe Pelletier