Why food companies need to drastically shift their businessmodel
- Business Model Innovation
How do we feed 10 billion mouths in 2050? This is one of the great social challenges of our time. One thing is certain: with our current food system, we are going far beyond the limits of our planet.
A wrap with grasshoppers as an appetizer. Without sugar, salt or fat. As a main course, a lab-grown hamburger is on the menu, supplemented with kohlrabi, from a vertical farm just outside the city. And the dessert? It’s a creamy mealworm pudding with oat milk. Pure dairy as people still ate it at the beginning of the 21st century is hardly available anymore. Welcome to the year 2050, a whole new food system. The food revolution that started more than thirty years ago has radically changed the way we produce and consume our food.
We need more planets
Ok, this is just a scenario. It’s not certain to what extent it is really heading in this direction. However, scientists all over the world agree that we drastically need to change our entire food chain. In the year 2050 there are about 10 billion(!) mouths to feed. We already know the current food system is no longer tenable. Let this short list of facts and numbers sink in:
- With the annual food consumption, we already need 1.7 times the Earth to meet our needs.
- Agriculture takes up 40 percent of the earth’s surface and is one of the main causes of deforestation
- About 20 percent of the CO2 emissions caused by humans can be attributed to this intensive agriculture.
- Two-thirds of this comes from livestock farming, the source for the piece of meat on your plate.
Food is wasted en masse
Numbers like these make you think, don’t they? But it gets even more serious when we tell you that a significant portion of all the food produced doesn’t end up in our mouths at all. About 1.3 billion tons of edible food is lost every year. This happens partly during the production process, partly due to food that has passed its best before date. To produce this amount, we need 1.4 billion hectares of agricultural land. By comparison, that’s an area the size of China. In addition, we are wasting 250 cubic kilometers of water in this way, enough to fill Lake Geneva three times. Added together, food waste is responsible for 6 percent of individual CO2 emissions.
The obesity epidemic
And there’s another reason why we can label our food system as broken. This part of the story is about our most precious possession: our own body. Much of the food people put in their mouths is loaded with fat, salt and sugar. The result of that? An obesity epidemic of unprecedented scale. In a country like the United States, 70 percent of the population is overweight. Doctors see this as one of the biggest threats to our health. It causes chronic inflammation in the body and makes people more susceptible to diseases. It is also one of the most expensive health care costs. The corona pandemic has once again shown that countries should invest more in the health and fitness of its citizens.
Meat substitutes on the rise
Besides this obesity epidemic, the consequences of our broken food system are not yet really visible. There is food in abundance, it is cheap and the environmental consequences stay out of sight. But not everything is business as usual. A growing number of companies is realizing that something has to change. Both large corporates and startups are experimenting with new ways or food production. Thanks to Beyond Meat technology, a veggie burger is now on the McDonald’s menu. At the beginning of this year, Domino’s launched the vegetable Vegeroni Pizza. And the Swedish company Oatly has scored a worldwide homerun with its plant-based alternative to cow’s milk. The CO2 footprint of Oat Drink is 80 percent lower than the animal counterpart. Eliminating food waste is the main goal of PeelPioneers. The company has just built the largest peeling factory in Europe, in the Dutch city ‘s Hertogenbosch. Here the company process 120,000 kilos of fruit peels a day into plant based oil, used as ingredients for cleaning products and pulp, that is used as supplementary feed for livestock.
Significantly invested in vegetable
You can mention that these are relatively small-scale initiatives, accounting for only a few percent of the market share. And looking at today’s numbers, that is correct. Yet we are now seeing the first patterns of exponential growth. For example, vegetable consumption in Europe has increased by almost 50 percent in the past three years. The expected scarcity of meat will probably accelerate this development. There are markets where meat consumption is still increasing. The demand for chicken, pork and steak is growing faster than we can produce. As a result, it is expected that the price of meat will increase considerably. More people will therefore switch to plant-based alternatives. Almost all major brands invest in these kinds of products. A company like Unilever wants to increase its annual sales of plant-based meat and dairy products fivefold in the coming years, to a turnover of €1 billion by 2027. Competitors such as Nestlé and Danone are also investing millions of euros in production lines for vegetable products.
A good value proposition
Developing a profitable business case for sustainably produced food requires a lot of know-how. You need technical development power, the right partners, knowledge of the market and a clear picture of your customer. All these pieces of the puzzle will ultimately lead to a good value proposition. The examples in this story show that the technology is here now. Moreover, consumers are no longer surprised by vegetable chicken wings on the shop shelf or sugar-free bars at the checkout. Do you want to take serious steps in this as a company and benefit from the exponential growth of sustainable food within the nearby future? Developing a product without sugar, less fat or based on vegetable ingredients? Do not hesitate and contact specialist Demian Sepp. We do everything we can to make your concept into a successful business case.
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