Feeding the world
The global food supply chain faces challenges and offers opportunities as the world population soars.
The world’s population is forecast to rise from over 7 billion today, to nearly 10 billion by 2050. This spike, coupled with the changing dietary habits that go hand-in-hand with rising affluence in developing countries is putting a serious strain on global food supplies. With the growing middle class in the developing world increasingly able to afford more resource-intensive foods, such as meat, dairy products, environmentally-challenging livestock production is also on the rise. To feed everyone, the food industry will have to adapt quickly to be able to ensure food security, without straining the environment and using up all our resources.
Nearly three billion additional mouths to feed
Emerging economies will exert the greatest influence on global food demand as they drive 90 per cent of the world’s population growth. For example, the bulk of the population growth will occur in sub-Saharan Africa, where a quarter of the population is currently already undernourished. “Per capita consumption is expected to increase at a rate more than three times the developed world, putting local supply chains under greater pressure,” says Julius Baer analyst Norbert Rücker. Those challenges can only be addressed through an unprecedented collaboration across the entire food value chain.
In dire need of sustainable crop intensification
The best way to tackle the issue of global food security is to ensure sustainable food production systems, notably by raising crop production. Over the past 50 years, crop production has already expanded threefold as a result of higher yields per unit of land and crop intensification. But much more can be done to make the current agricultural systems more efficient, particularly the adoption of new and improved agricultural technologies and management practices. Sustainable crop intensification could easily be reached if farmers in the developing world to some extent had access to crop protection, fertilisers, improved crop varieties, advanced irrigation, modern agricultural equipment or plantation in rotation. And there is great urgency.
Crop production needs to double
With the global population predicted to rise by about a third by 2050, crop production will need to double to keep up with rising demand for grains. Why? The planet will not only need to feed nearly 3 billion additional humans, but also significantly more animals, as the developing world becomes prosperous enough to add more meat into their diets. Data does indeed show a great correlation between fast economic growth and meat consumption. With around 70 million consumers entering the global middle class every year, meat consumption is forecast to rise by more than 23 per cent between 2006 and 2050, on a global basis, particularly in India and China. “These consumers are able to shift their consumption to more resource-intensive and high-value foods, putting additional pressure on crop yields and meat production,” Rücker explains.
Cutting the global food waste
The central activity of the food chain – food production – also requires better waste management. “Nearly a third of all food produced is lost or wasted without ever reaching human stomachs,” Rücker notes. All of the world’s nearly one billion hungry people could be nourished on less than a quarter of the food wasted in the US and Europe. Creative improvements, as well as greater collaboration between governments and the industry’s companies is urgently needed. There are easy steps to reduce our own waste of food: by eating leftovers, cooking your own meals, treating use-by dates as recommendations rather than dates set in stone to throw away packaged food or by buying food that is not cosmetically perfect. As much as 40 per cent of the fruits and vegetables produced in the UK are rejected even before they reach the shops, mostly because they do not meet the retailers’ strict cosmetic standards.
Dependence on international trade
Most countries are dependent on international trade to ensure their food security. Just eight countries produced, on average, 70 per cent of all cereal exports over the past decade. Food availability has nevertheless improved in developing countries over the past decades. “Food availability in the Middle East and North Africa has changed from a low to a very high level, with domestic production remaining very low, contrarily to Brazil which has seen an exponential growth in domestic production,” Rücker says. But food security remains insecure in the poorest countries the most vulnerable to price volatility and productivity shocks, whose population cannot cope with sudden price hikes on imported food. The setting up of cooperative trade policies may be necessary to alleviate the possibility of food shortages in the most vulnerable food-importing countries.
Retailers benefit from the emerging consumers
There has been a rapid transformation of the food retail sector in developing countries, as consumers in emerging economies increasingly buying their food in supermarkets rather than traditional open-air and covered markets. “Retailers continue to focus on the fresh food segment in developing countries, with leading consumer staples providers likely to benefit from this trend,” Rücker adds. Global retailers and their regional competitors continue to push into these lucrative markets to benefit from the existing wealth of opportunities there. They are not alone, the agribusiness sector, which includes agricultural, aquaculture, agrochemical, agro-tech and food producers will also benefit from this trend, as just discussed.
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