Insight

Preparing for sustainable licensing in the food and beverage industry

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Matthew Carr

Matthew Carr

Managing Director- Commercial

The time for food and beverage manufacturers to build up their sustainability and environmental credentials is now. With consumers demanding more sustainable products, companies must reduce the impact of their supply chains and prepare for the future, if the wish to stay competeive.

October 14, 2021

The environmental impact of our daily lives is becoming more prominent in the public consciousness – what to buy, what to eat, what to throw away, where and how to travel - and as people become more aware, their purchasing decisions are increasingly being driven by purpose over price.

Transparency and clear communication will be vital facilitators as we move from an era of mass consumption to conscious consumption, and the consumer’s desire for new understanding to inform their decision making will increasingly be provided by law, instead of through the choice of businesses.

I believe it is only a matter of time before the environmental credentials of food and drink items will be required to be displayed on packaging.

Environmental credentials will be license to operate

Brands have always led in this area and marketing the sustainability of a food or drink item is nothing new. However, we are moving at pace towards an operating environment where the possession of environmental credentials is less of a promotional tool, but in fact, a ‘license to operate’ – it is clear just how important it is that the food and drink manufacturing sector catches up with evolving consumer thinking.

It is therefore crucial that food and drink manufacturers have a keen eye on the future, and if they have not done so already, put plans in place to reduce the environmental impact of their factories and supply chains.

A legal requirement for this information to be shared on products will enable retailers and consumers to better decide which products are stocked on the shelves and sold at the tills.

Capex projects being undertaken by food and drink manufacturers to either build new factories or upgrade existing ones should put sustainability front and centre of their plans.

There will of course be investment involved in this, but schemes such as the UK government’s new ‘super deduction’ can help mitigate the costs through tax incentives. What is more, the potential costs and loss of earnings associated with not meeting a desirable ‘environmental standard’ will be enormous over the coming years.

Lower carbon emissions

Striving for lower carbon emissions will be the responsibility of every food and drink manufacturer, even those that operate in sectors that are seen as less environmentally-friendly such as the meat, dairy and fishing industries.

While the products themselves may naturally have a carbon footprint that is difficult to mitigate, action can be taken in the form of reducing road miles in the supply chain, making commuting for staff easier and greener, and seeking out renewable forms of power for factories.

There is always action that can be taken and improvements that can be made.

Consumers more aware of carbon footprint

As consumers become more aware of their own carbon footprint, the grocers and retailers that sell the products could in turn become more strict with their own procurement and buying process.

We may see some grocers choose not to stock any products that do not meet a certain sustainability standard, in an effort to attract a more environmentally conscious consumer. This could potentially reduce the number of sales channels for food manufacturers that have failed to modernise their operations.

Those food manufacturers that are ahead of the curve will be best placed to take advantage of any new laws regarding communicating the carbon footprint of their products. If they are able to remain competitive on price, a ‘gold standard’ environmental rating will carry a huge amount of weight when consumers are making purchasing decisions.

Integrated Food Projects – part if NIRAS Group - works with purpose-led businesses that actively seek to drive down carbon emissions in every aspect of their operations.

This focus often comes from a dedicated environmental individual or team within the business, and their input is integral to the design of any new projects or upgrades to existing facilities.

The time is now

Gone are the days of the environmental portfolio for a big business being the responsibility of a split job role or combined into another team – its importance now demands a dedicated focus from board rooms.

We are quickly nearing a time when sustainability will no longer be a badge worn by a relatively small group of operators offering a differentiator in the market. It will no longer be a ‘box ticking’ exercise for board rooms to adhere to.

The carbon impact of the food and drink manufacturing process will be an integral element of their product’s offering – along with things such as nutritional value and quality of goods. Those that fail to act will be left behind by consumers which, is evolving at an increasing rate.

The environmental credentials of food and drink products will become a license to operate for food manufacturers in the not-too-distant future, and they need to start planning for it now.

 

(This article was first published in FoodBev Media)

Get in touch

Matthew Carr

Matthew Carr

Managing Director- Commercial

Kegworth, United Kingdom

+4401509670850

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