Food security: A look at the here and now – and what’s to come…

Bethan Grylls investigates the instability of the UK’s food system, where the responsibility lies to incite change, and the debate of food price vs production price in this in-depth article.

Hazards, exposure and vulnerability are all increasing, Professor Tim Benton, Chatham House’s programme lead for environment and society, told Food Manufacture.

As such, he cautioned that shocks to the food system “will become more painful”.

This is a hard pill to swallow, given the turbulent times we’ve witnessed over the last three years, but nevertheless, it’s important we acknowledge the difficult times ahead so we can best prepare. It’s important we ‘do look up’.

During a panel around investor-business engagement at a recent Food Foundation seminar, Peter Elwin, director of fixed income and head of the food & land use programme at financial think-tank Planet Tracker, analogised the current global food system like sitting on a branch and sawing away at the section we’re perched upon. At some point we’re going to fall.

Looking at the UK specifically, Professor Benton explained that we’ve locked ourselves into a vicious circle of increasing production, environmental degradation and rising public health costs. As we attempt to address one problem, another becomes exacerbated.    

“Left, right and centre, our food system is not working as well as it should do. Wherever you look, we have problems; plus the fragility of supply chains that have been revealed in last few years,” he stated.

“The big lesson we should be taking from the last few years is that the future is uncertain,” Professor Benton told Bethan Grylls, Food Manufacture’s editor.

Right now, we can’t predict with enough precision what’s going to happen next. We know the climate is changing, but we don’t know exactly to what degree it’ll change, nor do we know the precise impact of animals and plants living together in different ways – we can expect zoonotic disease and an uptick in pests, but how that’ll manifest is unclear.

And it’s not just about looking to our own lands – it’s a well-known fact that the UK is overly reliant on imports, and so events overseas (whether that’s conflicts, forest fires, or something else entirely) will influence Britain’s plates too.

This being said, the general consensus among the industry at least, is that the UK needs to become less dependent on imports and look at ways to nurture its own food and agricultural system. 

And what about that vicious cycle? Well, according to Professor Benton, we need to go back to basics and get the fundamentals right, building in resilience.

Getting the fundamentals right

To achieve this won’t be simple, if we’re to transform the UK’s food system to be more robust, healthier and more sustainable, we need to focus on what it’s grown upon. That means moving to more local systems, seasonality and looking after nature (e.g. soil health and biodiversity). 

Many of the speakers acknowledged the role investors will play in driving political change and meaningful policies in food and drink.

“One obvious way investors can sway policy is through the types of companies they invest in, whether that’s a food company or UK steel manufacturer, and the influence those organisations have on the UK economy, for example pensions. Investors can then suggest by doing ‘x action’, you can improve the investment environment,” Elwin explained.

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Investors can also talk to ministers directly, simply on the basis that the financial sector is extremely important to the UK economy.

“From a UK specific perspective, investors can talk to the government and say, ‘you know we contribute a huge amount to GDP and tax and wealth and all the rest of it – and we think we could be even more successful if you did the following things’, for example,” he elaborated.

“The third possibility is that an investor who is a holder of government debt could talk to The Government – whether that’s an investor in UK or Brazil or whichever country – on the basis that they have an interest in the overall success of the economy and the stability of the political and social system.”

However, despite having an influence over government, it’s arguably the company an investor invests in, that it has more influence over.

“Investors cannot impact the consumer, but they can invest in companies that take action,” highlighted Elwin.

But do investors invest in companies doing the right thing already, or do they push for the right thing to be done?

“The companies that investors put money into really depends on their investment policy – how they’ll be making money,” Elwin noted. “Generally speaking, investors will make money by buying a company where most other people don’t think it’s doing very well in terms of profitability or operations (i.e., management or strategy). Investors are actively looking to spot changes before others do and so buying ‘bad’ companies that turn out to be ‘good’ is an excellent way of making a profit.

“Then there are those investors that follow an index – a so-called passive investor. In this scenario, the investments are predetermined, so you’re then working on the approach of – I want these companies to be better because the overall returns will be higher.”

Planet Tracker, where Elwin works, looks to help investors invest in the right things. Similar to a charity like WWF, the thinktank is looking to inspire positive action, but it does this through capital markets instead of adverts and initiatives. In basic terms, it changes the way institutional investors and banks think about their money.

This, Elwin explained, is achieved by flagging the risks and the opportunities in a way that is ‘digestible’ to the financial market. Elwin’s role, in part, is to simplify academic papers so they have a clear punch line of actionable investment insights which will lead to positive climate action, for example.

“So we want them to either move their money to a better place or if they are a passive investor, influence good action,” he continued.

We all need to work together

However, as Benton pointed out, regardless of who is spearheading transformation, “change will only happen when we all change”. 

“We often say it’s down to consumers to choose healthier food, or it’s down to retailers to sell healthier food, or it’s down to manufacturers to make healthier food, or it’s down to farmers to grow healthier food.

“Actually it’s down to the whole system to be incentivised in the right way and a lot that comes down to government; where do you put your subsidies in, how do you build the right infrastructure, those are all public planning decisions, making the right sorts of food more available at the right prices,” Professor Benton said.  

“We need government to intervene and people and the market actors to license that change to give way to it – but it won’t happen without government.”

Expanding on the role of the investor, Martin Bowman, senior policy and campaigns manager of Feedback projects, added: “We have an investor community, but we also have a range of private companies. It’s about everyone stepping up,” added Bowman. “It’s no use doing something at one end of the chain and by the end of it it’s lost. The supply chain is made up of lots of small entities. We need to make sure we work across the entire supply chain and strengthen the weakest.”

Stuart Lendrum, Iceland’s sustainability & packaging leader and head of product and process, offered the private company view, accepting that while the private sector has a part to play, it cannot address these challenges alone, at least not at the pace required.

He likened it to Iceland’s move which saw it eliminate palm oil from its shelves (at least until recent difficulties, which led to its temporary return to ensure its customers could have access to certain items). The palm oil ban made an impact, certainly, but it didn’t change the world, Lendrum admitted.  

Continuing to explore the role investors have in influencing change, he recommended that they “take the time to understand the pressure on consumers and business”.

He explained: “They need to get under the skin and behind the numbers and its wider supply chain.”

Mandatory health reporting

Many of the speakers, including Lendrum, praised the Food Data Transparency Partnership (FDTP) and suggested it will pave the way for significant change.

The FDTP was inspired by the Dimbleby Report, which recommended that UK government should introduce mandatory business reporting in a variety of areas.

Since then, the Government has committed to mandatory reports related to health metrics, which should be introduced by the end of this year. These metrics will be developed in collaboration with industry and other stakeholders via the FDTP.

Following the Government’s announcement to follow through (in part) with this reporting, the Food Foundation set out the following recommendation: “For maximum impact and to avoid imposing undue additional burden on businesses, the FDTP should seek simplicity and alignment with the methodologies and metrics utilised by established voluntary schemes, and learn from examples of existing successful business reporting.

“It will also be crucial that the Government retains its ambition for reporting to be mandatory rather than voluntary and backs up new mandatory reporting requirements with strong implementation mechanisms, including requirements for the reported data to be publicly accessible, and the introduction of robust accountability mechanisms.”

During the panel, Bowman added that Feedback was keen to push food waste into the mandatory reporting agenda too – a recommendation that was set out in Dimbleby’s food strategy.

The timing has to be right

Discussing government intervention around health, Lendrum raised caution over introducing restrictions at the right time. He noted that Iceland was in agreement with HFSS for example, but that it would be unwise to remove multibuys at a time of high inflation.

“Ensuring consumers can eat is a higher priority,” he affirmed.

“When governments do intervene, their actions need to be well-thought through.”

He added that fiscal incentive can only go so far in helping address the issue of health.

“You can make burgers more expensive and carrots cheaper, but people will still eat burgers if they want them.”

Food is too cheap

Food Manufacture raised the issue of food prices with Professor Benton, following the reveal at our Business Leaders Forum (BLF) that the price of food did not reflect the cost of production.

“Every time we do the ‘right thing’ there’s a cost”, one of the attendees said at BLF earlier this year.

“Food prices do not reflect the cost of production, nor do they reflect the cost of environmental and health consequences – the externalities of the system,” the Professor told Grylls. “In the long run, it means more expensive food, but it doesn’t mean everything has to go up in price.”

Unlike Lendrum, Professor Benton saw the value in skewing prices in favour of healthier food.

“You can make fruit and vegetables cheaper and unhealthier and environmentally damaging foods more expensive.”

He added: “Right now, food is cheap enough for it to be economically rational to waste it.”

This was a point that was also flagged at BLF by a delegate: “We have been blessed with cheap food, no wonder we [the UK] have such a throwaway culture. We’re one of the most competitive retail environments in the world.”

The determining factor for food prices in the UK was also debated at BLF, as one attendee suggested it was a result of a distorted set of agricultural markets, while another said it was competition between manufacturers and retailers.

“The cost of bread per kilo in the UK is about two thirds less than the US,” a BLF delegate commented. “No government is going to intervene and rise prices. If you need to set a higher price, you have to be brave and go for it.”

Whatever the right move is, the risks coming up are increasing volatility, and an increasing need to get things right from a health and sustainability perspective…and that calls for a major food systems transformation.

Is change coming? Probably. Is change needed? Definitely.