Food production that doesn’t cost the Earth

  • 18 April 2019 (7 min read)

Key points

  • One-third of all food produced globally is destroyed
  • Food trends are evolving as consumers assess their shopping habits
  • The protein market could see radical change as clean technologies develop

The impact of unsustainable food production has put the planet in a delicate position. But, attitudes are changing, awareness is growing, and new clean technologies are providing the potential for change.

What is sustainable food?

There is no official definition for what constitutes sustainable food, but we broadly understand it to mean food that is produced with the intention of limiting its carbon footprint, water intensity and land use; while protecting soil quality, biodiversity and avoiding deforestation.

What’s driving the need sustainable food production?

The need to create more sustainable food and invest in sustainable farming practices is being driven by several factors.

Often appearing at the top of this list of factors is food waste. According to the United Nations (UN), one third of all food produced globally is wasted1 , contributing to 8% of total global greenhouse gas emissions. To put that into perspective, if food waste was nation, it would win the bronze medal for its impact on global warming, being beaten only by the United States and China2 .

Globally, we are demanding more of the Earth’s natural resources to produce food that is ultimately destroyed. Livestock farming uses approximately 77% of agricultural land3 , and, according to the UN, animal farming contributes to more greenhouse gas emissions than all the cars, lorries and planes in the world4 . As demand grows, the impact of high meat-based diets is beginning to take it its toll, and the need to consider more sustainable farming, food production and supply practices is growing.

The water scarcity challenge highlights the importance of making this shift. The Earth’s population is estimated to reach 9.8bn by 20505 , but available water resources will remain flat at best. As it stands, 70% of fresh water globally is used for agriculture6 , and if we are to conserve water resources for future generations, the current levels of water usage in food production is not sustainable.

Change is coming… slowly

Food trends have started to evolve as consumers, governments and companies become more aware of the impact of unsustainable food production.

In recent years we have seen more consumers embracing vegan, vegetarian or ‘flexitarian’ diets in a bid to reduce their meat intake, resulting in 70% of the world’s population reducing their meat consumption or cutting out meat altogether7 . Further to this, the plant-based food market is growing at an exponential rate, and is anticipated to reach US$5.2bn8  by 2020.

It is not only diets that are changing. Consumers are beginning to look more closely at what they are buying and how far their food has travelled.

The sale of Fairtrade products globally reached $9.2bn in 20179  as consumers continue to change their shopping habits, and images of severe deforestation and displaced orangutans have prompted consumers to question the use of unsustainably sourced palm oil.

Consumers attitudes towards the aesthetics of fresh produce is also changing. Approximately 26% of produce that doesn’t meet supermarket standards is destroyed before it reaches shelves, but, with 81%10  of consumers surveyed across the UK, US, France and Germany stating that they would purchase imperfect fruit and vegetables, we could start to see more ‘wonky veg’ in our local stores.

New technologies springing up in the sustainability movement

Growing consumer awareness and changing demand is driving the industry to adopt new and innovative technologies that provide solutions which address the need for more sustainable farming and food production.

To help tackle global food waste, new apps are being developed that link farmers directly to businesses and consumers. These apps allow farmers to negotiate their own prices dependent on how ‘ugly’ the produce is and helps to break down the supply chain by allowing consumers to liaise directly with farmers and collect produce themselves, potentially cutting down on the carbon footprint of the food produced.

Developing a more sustainable food production system won’t come from apps alone, and consequently, new forms of protein are beginning to surface.

This has led some experts to algae. Typically seen as the green stuff the grows in ponds and lakes, algae could soon become a major source of the world's protein. Growing ten times faster than terrestrial plants, it doesn’t require fresh water, can provide more iron than beef and, due to its versatile nature, does not compete with other crops for land. Already being used by some ice cream manufacturers and in protein powders, the power of algae in still in its infancy, but with the technology and scalability of this market developing, the algae products market is anticipated to reach $5.2bn11  by 2023.

It’s not only algae that’s shaking up the protein market, ‘clean meat’ start-ups are beginning to make serious headway. Often referred to as ‘cultured meat’, this is meat produced in laboratories using in vitro cultivation of animal cells. The technology has come a long way in a short time. In 2013, the first clean meat hamburger was debuted in London at a cost of approx. $330,000. Mosa Meats now aims to sell its clean meat at $10 a patty by 202012 . Those championing clean meat highlight that it requires less land and water than traditional animal farming, and, due the environment the meat is grown in, mean that it is not exposed to pathogens.

It’s not just algae and clean meats, could insects provide the answer to sustainable food? Watch here

The Earth is not beaten yet

We know that the earth is in a precarious position, but we still have time to reverse the damage that has be done. Mindful of the commitment of corporates to making the transition to sustainability and spurred on by the burgeoning interest of their customers, we believe that now is the time to invest in the clean economy and these new innovations.

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    Disclaimer

    This website is published by AXA Investment Managers Asia (Singapore) Ltd. (Registration No. 199001714W) for general circulation and informational purposes only. It does not constitute investment research or financial analysis relating to transactions in financial instruments, nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services, and should not be considered as solicitation or investment, legal or tax advice, a recommendation for an investment strategy or a personalized recommendation to buy or sell securities. It has been prepared without taking into account the specific personal circumstances, investment objectives, financial situation or particular needs of any particular person and may be subject to change without notice. Please consult your financial or other professional advisers before making any investment decision.

    Due to its simplification, this publication is partial and opinions, estimates and forecasts herein are subjective and subject to change without notice. There is no guarantee forecasts made will come to pass. Data, figures, declarations, analysis, predictions and other information in this publication is provided based on our state of knowledge at the time of creation of this publication. Whilst every care is taken, no representation or warranty (including liability towards third parties), express or implied, is made as to the accuracy, reliability or completeness of the information contained herein. Reliance upon information in this material is at the sole discretion of the recipient. This material does not contain sufficient information to support an investment decision.

    All investment involves risk, including the loss of capital. The value of investments and the income from them can fluctuate and investors may not get back the amount originally invested.

    Some of the Services and/or products may not be available for offer to retail investors.

    This publication has not been reviewed by the Monetary Authority of Singapore.