This page is not available in your selected language. Your language preference will not be changed but the contents of this page will be shown in English.

To change your current location please select from one of Julius Baer’s locations below. Alternatively if your location is not listed please select international.


Please select
Additional e-Services

*The location identified is an approximation based on your IP address and does not necessarily correspond to your citizenship or place of domicile.


Sign up for Insights newsletter


Sign up for Insights newsletter

Prior to the crisis, many people were already concerned about the environmental impact of our food. We fretted about food miles, worried about the carbon footprint of meat, tried to buy local produce, and, increasingly, looked for organic and sustainable foodstuffs.

The crisis has made us think more deeply about how we feed ourselves
As consumers, many of us have been cooking for ourselves as never before. The fun side of this has been social media fads such as competitive sourdough and banana bread baking. The serious side has been the need to plan and prepare three meals a day for ourselves and our families, and engaging with what we eat in a way that many of us haven’t for about 30 years, in part because of the growth in ‘al-desko’ office lunches, ready-to-eat retailers, restaurants, and delivery services.

As a result, many of us are now even more conscious of the food we buy, and our consumption habits are adapting accordingly. Food companies, some of which have long been at the vanguard of ethical shopping, are also responding to these changing habits. There is a further dimension here too. Covid-19 has placed enormous pressure on global infrastructure and supply chains – and, as a result, companies have been looking at what they sell, from the farm to the table.

Take Los Angeles-based Erewhon, which has been described as “the bougiest [fanciest] grocery store in LA”. It is a popular haunt of local celebrities and, according to ‘Los Angeles Magazine’, has “inspired cult-like devotion among those who can afford to pay four dollars for an avocado”. In a market where brutal price competition is the norm, Erewhon’s USP is high prices and high margins for hyper-artisanal food products with backstories that read like upmarket spa brochures.

You might expect Hollywood A-listers to care about what they eat (while remaining price-insensitive), but the desire to be conscious consumers has spread far beyond the West Coast elite. In the UK, the 2020 edition of the Co-op’s Ethical Consumerism Report, which has monitored ethical spending habits for more than 20 years, notes that in the past year “free-range eggs account for the biggest shift in consumer spending on food and drink – up 15.2 per cent”. This is closely followed by plant-based products, which have risen 11.4 per cent. Organic and Fairtrade foods are also up. Roughly a third of shoppers plan to buy more plant-based and Fairtrade foods in 2021 – and 58 per cent say they want to support local shops.

Going vegan is one of the most significant things most people can do to reduce their carbon footprint.

This pattern is repeated around the world
In 2018, the consumer research group Mintel reported that traditionally carnivorous Germany had the highest proportion of vegan launches of any major economy. Indeed, many countries are now far more concerned about how they raise livestock, as factory farms can act as viral reservoirs. A September 2020 paper from the Humane Society called for the world to phase out intensive farming in order to cut the risk of future pandemics.

Unsurprisingly, vegetarianism and veganism have a huge part to play in conscious consumption. Going vegan is one of the most significant things most people can do to reduce their carbon footprint, as, according to the UN, meat and dairy contribute 14.5 per cent of total greenhouse gas emissions. Of these, beef, lamb, and cheese are the three with the greatest carbon footprint – and beef leads by quite some way. This is down to how these animals digest their food and the gases (principally methane) they produce.

The other thing these animals require is large amounts of land, be it for grazing or for the production of their feed such as corn. Particularly in the case of cattle, their grazing land was often previously forest, so they represent a double blow to the environment. This is also why animal agriculture takes up 70 per cent of farmed land.

The good news here is that vegetarianism and veganism are growing almost everywhere – particularly among younger people. The bad news is that meat consumption in many countries is on the rise, although the meats tend to be pork and chicken, rather than beef, which is some small salvation.

Another positive note is the rise of meat substitutes, as epitomised by the Impossible Burger. According to data from Nielsen, early in the pandemic sales of plant-based ‘meat’ grew by 264 per cent – and in late 2020 McDonald’s unveiled the McPlant, a meat-free burger created in conjunction with Beyond Meat. Of course, meat-free burgers are made in factories and are not without environmental impacts, but they are widely reckoned to be better for the planet than beef.

A great deal of the impetus for green change in the energy industry has come from investors.

There are still many contradictions when it comes to eating ethically
Organic food is perhaps the best known of these. Plenty of studies show that, despite the benefits of organic food, once you factor in the greater land requirements, factory farming may actually have less impact on the environment. One of the authors of a 2018 report produced by the Chalmers Institute of Technology in Sweden explains: “Our study shows that organic peas, farmed in Sweden, have around a 50 per cent bigger climate impact than conventionally farmed peas. For some foodstuffs, there is an even bigger difference.”

In these cases, the researchers point out that it could be better to cultivate non-organic crops and leave a hectare or more as wild for every hectare you grow. In a similar vein, it can be more energy-efficient to grow tomatoes in sunny Spain and transport them to many parts of northern Europe than it is to grow them in other parts of the EU, depending on the cultivation method used. For reasons such as these, some have suggested that it is perhaps better to use growth in organic sales as a measure of consumer interest, rather than success when it comes to eating for a more sustainable future.

Norbert Rücker, Head of Economics & Next Generation Research at Julius Baer, points out that on top of all this complexity you have harder to measure factors. Measuring the loss of biodiversity is one. This is related to climate change, but does not necessarily always line up with it. He explains: “While there are credible calculations showing how the planet’s extraordinary variety of species shrinks every year, such metrics lack a clear link to our consumption habits or corporate activity.”

Searching for sustainable solutions
Eating sustainably is clearly complex, but, while the problem takes in numerous interlocking drivers, so perhaps will the solutions. A great deal of the impetus for green change in the energy industry has come from investors who, increasingly, see putting money into environmentally damaging businesses as an unacceptable risk. We could start to see this type of financial pressure in food. Teni Ekundare of the FAIRR Initiative, a London-based collaborative investor network that is helping to identify and prioritise ESG-related issues in intensive livestock supply chains, recently told the ‘Financial Times’: “Unless things are done, there is a risk that [the meat industry] becomes the next oil and gas with stranded assets.”

Would you like to know more about thematic investing and which megatrends should be reflected in your portfolio?

> Contact us