Food firms miss commercial opportunities in climate change

By David Burrows

- Last updated on GMT

Related tags: Climate change

Climate change is affecting crops, which puts pressure on raw material prices.
Climate change is affecting crops, which puts pressure on raw material prices.
Food manufacturers are so focused on the risks they face as the climate changes that they are forgetting about possible opportunities.

In fact, while other sectors are already enjoying commercial benefits from climate change, those involved in food remain largely reactive rather than proactive.

That’s the conclusion of a new government report, due to be published on Friday, but seen by FoodManufacture.co.uk.

Commissioned by the Department for Environment, Food and Rural Affairs (DEFRA), ‘Climate Change Adaptation: Risk and Opportunities for Businesses in the South East of England’​ is based on interviews with leaders of global Fortune 500 blue-chip companies and smaller, UK-based companies across the South East in five target sectors. Each one is identified as particularly vulnerable to the impact of climate change: food and beverage, chemical manufacturing, extractive industries, tourism and the built environment.

The researchers, from sustainable behaviour change agency Corporate Culture, found a spectrum of approaches to climate change adaptation – measures which aim to deal with the consequences of climate change, rather than mitigate it – spanning from “long-term proactive planning and resourcing at one end to inertia and inaction at the other”​.

Climate change risks

The report concludes: “Food and beverage companies were more likely to see risks than opportunities as the impact on natural resources and rising commodity prices is an immediate threat that has the potential to severely affect their bottom line. Many companies are adapting by finding new sources of raw materials and developing new supply chains to ensure business continuity.”

Identifying these risks was seen as critical. However, examples of food companies taking advantage of changing weather patterns are “limited”.​ Corporate Culture director of insight Belinda Miller said: “Every food business is doing something in terms of adaptation to climate change as a risk, but very few are doing anything on the opportunities it could provide.”

Miller said benefiting commercially from climate change was “nothing to be ashamed of”​. Those working in the built environment, for instance, are actively developing new consultancy programmes and resources specifically based around climate change adaptation to help drive new product development (NPD) and differentiate from competitors.

NPD from food businesses in response to changing weather is often limited to substitution. Respondents reported increased sales of ice cream during longer periods of warm weather, but that is often in place of hot desserts.

Commercial opportunities

However, some were working on new crops. One business said: “In the supply chain, the opportunity is to identify new raw materials. By fully understanding the cocoa genome, we can find that some strains of cocoa are better adapted. Managing those raw materials that will reduce climate change impacts and help to adapt is important.​”

Miller said businesses needed to see a clear commercial opportunity from adaptation to provide a compelling imperative to take action now.

DEFRA will be using the insights to drive more businesses to climate change adaptation through a behaviour change campaign. Miller said adaptation should be made easy focusing on “what companies can do now without the need for lots of expensive consultants [and additional resource]. The advice also needs to be sector-specific”, she added.

To read more about the impact of climate change on crops, click here​.

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