Over 65 percent of
consumers
want to make the right spending choices to live a healthier and more sustainable
life, and they’re growing increasingly conscious of the environmental and social
impact of their food choices. This shift towards prioritizing sustainability
mirrors the food and beverage industry’s own recent initiatives, as leading
brands continue to set goals to reduce their carbon footprint and implement
social-impact
programs.
However, amid rising greenwashing
concerns,
consumers and regulators are asking brands to provide proof of their
sustainability claims; and food and beverage companies now find themselves
navigating a labyrinth of certification
requirements.
Common certifications include “Organic,” which assures that the product is
produced without synthetic pesticides or fertilizers; and “Fair
Trade”
— indicating fair wages and ethical treatment of workers. Additionally,
consumers often look for labels related to environmental impact — such as
Rainforest Alliance or Carbon
Neutral. These certifications not only provide
transparency but also empower consumers to make choices aligned with their
values and contribute to a more sustainable food system.
The path to achieving these certifications begins at the farm level, requiring
food and beverage enterprises to take a closer look at their growers'
agricultural processes and encourage them to adopt new procedures and
technologies.
How the food supply chain challenges sustainability goals
the exciting potential of cultivated, fermented and plant-based protein innovation
Join us as Aleph Farms, the Better Meat Co, the Good Food Institute and Plantible Foods discuss the latest advancements in cultivated, plant-based, and fermentation-derived proteins — and how incorporating alternative proteins can help brands significantly reduce environmental impacts, while conserving natural resources — Tuesday, Oct. 15 at SB'24 San Diego.
On a daily basis, food and beverage companies must manage an intricate supply
chain of thousands of growers spanning different regions, ensure profitability,
and meet sustainability goals — all while addressing escalating demand for
quality and safety. Their success on each of these initiatives is contingent
upon gaining unprecedented visibility into the growing practices of their
suppliers.
Popular food and beverage supply-chain technologies, such as enterprise
resource planning (ERP) and product life management (PLM)
solutions, predominantly focus on the logistics and production stages; however,
the often-overlooked foundation of this complex system is the cultivation of
agricultural raw materials, or crops. This blind spot has far-reaching
consequences, particularly for the backbone of our food ecosystem — smallholder
farmers,
or those running farms under 5 acres.
Smallholder farmers produce 30-34 percent of all food
supply
on 24 percent of the world’s agricultural land — and even more
disproportionately for key consumer commodities such as
coffee
and
cocoa.
Their operations are on a smaller scale, scattered across diverse and remote
locations; and larger agricultural enterprises and commercial farming often
overshadow their contribution.
The usual challenges faced by farmers — from unpredictable weather
events
and resource constraints to improper infrastructure and market uncertainties —
are significantly amplified in the smallholder context, and they directly impact
the complex web of global food and beverage supply chains. The current dynamics
between these farmers and food and beverage enterprises presents challenges in
achieving sustainability targets — including securing certifications to build
market credibility. Smallholder growers, despite their crucial role in the
supply chain, are often wary of making operational changes to meet
sustainability certifications — due to concerns related to the potential
economic impact of altering established farming practices, the initial costs
associated with transitioning to more sustainable methods, and uncertainties
regarding market acceptance and premium pricing for certified products.
Additionally, farmers may fear disruptions to their traditional farming routines
and worry about the feasibility of long-term compliance with certification
requirements.
As a result, food and beverage companies encounter challenges in ensuring that
their diverse network of smallholder farmers adheres to stringent sustainability
standards. The process of certification also often involves considerable
paperwork, rigorous audits and investments in training and infrastructure —
creating barriers for both parties. This is problematic when dealing with a
geographically dispersed supply chain involving a variety of local practices,
languages and environmental conditions. These complexities multiply when food
and beverage companies have to deal with several certification programs.
Streamlining sustainability goals & certifications with technology
Complying with various sustainability certifications imposed by third-party
entities can seem daunting. Traditionally, farmers and field agents had to
engage in lengthy surveys about their agricultural and chemical inputs, wages
for farmers, and more — often repeating similar information for different
certifications.
The process, taking months in some instances, proved to be not only
time-consuming but also prone to errors and inconsistencies due to manual input.
The good news is that handling and updating spreadsheets, communicating via
email or — worse yet — handwritten records, and dealing with the complexities of
manual data entry have become relics of the past. While a few companies still
rely on these methods, many are transitioning to automated mobile survey tools
and analytics — which drastically shortens the timeline and reduces manual work,
allowing farmers and field agents to complete comprehensive surveys about their
sustainability practices just once while covering multiple certifications.
For example, a leading food and beverage brand recently reported a reduction in
the certification process from over two months to just a few days by
implementing a digitized software solution to support both the brand and the
farmers. The brand accelerated the process of tracking sustainable farming
practices and paying the increased premium
price
to compliant farmers, both of which were backed by documented evidence; and the
farmers received timely and proper compensation for their efforts. This not only
speaks volumes about the efficiency gains but also the real-time benefits that
companies can reap from implementing emerging technology in the certification
process.
A win-win for food and beverage companies and growers
Beyond compliance, the shift towards emerging technology translates into other
tangible benefits for smallholder farmers. By automating the certification
process, farmers can focus on what they do best — cultivating quality produce —
and reap rewards for their efforts, building greater trust between farmers and
buyers.
Meanwhile, for food and beverage companies, this technological shift provides a
streamlined approach to meet sustainability goals and achieve better visibility
and accuracy for key certifications. The ability to obtain multiple
certifications efficiently not only reduces costs but also aligns with the
growing demand for responsibly sourced food
products.
It's a win-win situation, where companies can assure consumers of the quality
and ethical sourcing of their products while fortifying the backbone of their
supply chain —smallholder farmers.
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CEO at Agritask
Ofir Ardon is CEO of Agritask — a crop supply intelligence company, providing visibility into predictability and sustainability of crop supply for food and beverage enterprises.
Published Feb 15, 2024 8am EST / 5am PST / 1pm GMT / 2pm CET