I entered the fresh produce industry in 2008 through the MDS Graduate Training Programme and have seen firsthand how sustainability is increasingly shaping the way the global fresh produce supply chain serving the UK retailers operates. As we move towards 2050, global supply chains will be increasingly stretched by population growth reaching nine billion at current rates, as well as climate change, geo political factors, reduced credit availability and increased consumer discretion. All the while our food security in the UK will be threatened further by the emergence of new and more lucrative export markets.
In today’s society, we rely heavily on imported produce to satisfy demand. Worryingly, the sustainability of global agriculture supplying this array of fresh produce is under increasing threat. Urbanisation is reducing the amount of space available to grow crops, weather patterns are becoming more extreme and sources of oil and gas on which agriculture so heavily depends are dwindling and increasing in price. Furthermore, water scarcity is widely regarded as the single biggest threat to global food production. Safeguarding supplies is thirsty work. To ensure sustainable food security, the plant breeding industry will consistently need to develop crops more resilient to heat and drought as many pesticides are phased out in the EU. GM crops will also have a role to play in the future due to their potential to increase yields and reduce the reliance on pesticides to control pests and disease.
Both supply and innovation must increase to ensure sustainability. We are steadily emerging from the credit crunch, but the climate crunch is an altogether greater challenge. Growers will need to determine how climate change can help them diversify their product range and become net energy exporters. They will need to turn to technological and mechanised developments that improve efficiencies and storage and allow for more resourceful production through closer analysis of weather patterns and market trends. Closer to home, the often harsh reality of British agriculture is one of evaporating profit margins and rising debts due in part to its share of the annual UK grocery spend diminishing. For UK growers to be sustainable long-term, they must explore the benefits of growing new varieties to escape the commodity trap and be aligned to a marketing desk serving multiple customers with whom it can achieve a fair price by promoting the ethical, environmental, high quality and seasonal message of British produce. Many challenges do, however, remain, such as expected seasonal labour shortages from traditional EU sources and resistance to building glasshouses and polytunnels. We can ill afford to threaten our own food security as rapid climate change will cause reduced crop yields in Asia and Africa with agricultural production already stagnating in mainland Europe.
With regard to product, it is increasingly clear that only fresh produce that is sustainably and ethically sourced, distributed and produced will remain relevant to consumers. All stakeholders must address this consumer-led trend to remain sustainable. As such, despite the commercial pressures in the global food chain and the emphasis on low price, products that are responsibly produced and bring positive change resonate well with consumers and present opportunities. For example, in many countries the only thing farmers are growing is hungry, an image which has led to Fairtrade becoming the most high profile ethical brand on the UK high street.
Fairtrade must, however, improve its supply, quality and assortment to drive repeat purchases, and its growers must be encouraged to focus more on agricultural innovation in order to ease global food security concerns. It will soon be essential for own brand retail products at every entry level to be inextricably linked with ethical and sustainable credentials while premium lines such as organic must overcome media scepticism and deliver a clear, simple and effective message of the environmental benefits it offers to consumers. Furthermore, despite the complexities of the supply chain from grower to retailer and agreeing the true definition of local, UK retailers now view local differentiated products as a fillip for growing consumer loyalty because local is associated with sustaining our agricultural industry, reducing carbon footprint and strengthening local economies. This reality presents a huge opportunity for all stakeholders. Similarly, there are many opportunities for the packaging industry to deliver cost-efficient and sustainable value through creating inventive packaging solutions that extend shelf life and freshness, reduce waste and use more recycled materials.
Further up the supply chain, the retailers now exert enormous power and influence over the whole supply chain with retail supply contracts becoming increasingly sought after among suppliers. In order to deliver both sustainable value and values for money to their consumers, retailers are using their scale to drive savings in their supply chains and are exploring the benefits of cost-saving direct sourcing strategies, despite the short-term challenges of service level, quality assurance and supply versus demand. In response, successful suppliers are gaining critical mass, developing their product assortment and building their own vertically integrated supply chains. The sustainability agenda is also seeing retailers strive to shield their customers from cost price increases with reduced consumer loyalty driving increased retail competition. This is resulting in greater consolidation in the supply base with only those suppliers who can drive economies of scale, innovation and lean management agendas to deliver savings and extra services remaining sustainable. Furthermore, to deliver the best sustainable service, logistics providers transporting goods from producer to customer will increasingly need to have global presence with expert local knowledge. They will need to explore the mileage in transporting multiple customers’ goods on the same vehicle where commercial challenges can be overcome and measure, manage and reduce carbon emissions through using rail and river transport, for example.
In simple terms, resources will dwindle, climate change will intensify and consumers will become more powerful. Fresh produce is becoming an increasingly commoditised category, resulting in service becoming the key differentiating factor. Therefore, only the stakeholders in the global fresh produce supply chain closest to their customers who consistently unlock innovative, value added and sustainable fresh produce solutions without passing on substantial price increases will remain sustainable. Have you found the key yet?
FACTFILE: ADAM HILL
Age: 24
Position: Procurement executive salads, Greencell.
Education: Graduated from the University of Manchester with a BA Hons in French and Spanish; Graduate of the MDS programme 2008-2010
Hobbies: Keen musician - playing piano and French horn at Grade 8 level; Sport - plays tennis and golf and a Manchester United fan.
No comments yet