Food and beverages

Fair trade, agricultural impacts, responsible marketing and the GM debate are the most pressing issues that companies in the food and beverages sector are grappling with.

Key challenges and opportunities

Ethical sourcing

The fair-trade movement has brought to public attention problems in the supply chains for foods and beverages – for instance, producers in developing and fragile economies receiving an insufficient share of profits, and the concentration of market power in the hands of a small number of global companies in markets for commodities like chocolate and coffee.

In the face of growing consumer demand, some major supermarkets have committed to building Fairtrade and ‘fairer’ trade lines. Food and beverages companies increasingly need to source their products ethically, and generally increase the transparency of their activities through their public disclosure.

Responsible products and responsible marketing

Concerns over obesity and alcohol consumption have shone a spotlight on the commercial practices of the sector. The World Health Organisation projects that, by 2015, approximately 2.3 billion adults will be overweight and more than 700 million will be obese. Meanwhile, alcohol causes about 2.3 million premature deaths per year worldwide. As a result, food and beverages companies are under growing pressure to:

• make responsible decisions over product formulation (such as salt and fat content and the use of additives)
• market responsibly, particularly to children and young people
• label products so consumers can make informed decisions.

The GM debate

The use of generically modified (GM) ingredients and technologies remains controversial. Although most concerns remain largely unproven, in many countries there is significant consumer opposition as well as legislation restricting or banning the use of GM ingredients. Increasing attention is also being paid to how key players use or abuse their market power to influence legislative processes.

As new GM technologies emerge, pressures will mount to allow their use. This will raise questions about international decision making and oversight. Food and beverages companies must offer customers choice and information and be transparent about their lobbying and support for research trials.

Agriculture impacts

Agricultural lands occupy nearly 40 per cent of the Earth’s land surface and the majority of raw materials for the food and beverage sector ultimately derive from farms. Primary production is closely allied with many core sustainability issues such as water availability and climate change. For instance, it is estimated that irrigation accounts for about 70 per cent of worldwide water use. Local access to water resources has become a flash point for conflict. Also, agriculture accounts for 52 per cent and 84 per cent of global anthropogenic methane and nitrous oxide emissions, both potent greenhouse gases, as well as for large-scale CO₂ emissions.

Food and beverages companies will increasingly need to account for their indirect contribution to global social and environmental challenges, demonstrating management strategies to mitigate their impact.

Credentials

• We worked for several years with global brewing giant InBev, providing advice on its approach to corporate citizenship and hands-on support on the writing and production of four successive InBev annual Global Citizenship reports. This included helping the company identify and prioritise its material issues, and report against the GRI G3 guidelines.
• For Bermuda-based spirits company Bacardi, we provide advice on CR strategy, report development and responsible sourcing.
• We have worked with Danish food ingredients manufacturer Danisco to provide independent assurance of its sustainability report, and to advise on its stakeholder engagement strategy.
• We advised a leading spirits distilling group on a responsible marketing strategy.
• We provided independent report assurance for Traidcraft, the award-winning fair-trade champion.