Sustainable Food Chains

There’s an emerging conversation among supply chain leaders at major food and ingredients companies about the concept of “food miles,” and how the extended supply chain is reaching a point where we could face a situation where the food chain becomes unsustainable in certain parts of the world.

As the global economy becomes increasingly interconnected and new markets arise in the developing world, there has been a shift in the way food products reach consumers. More products are traveling greater distances than ever before because less food is being grown and produced close to the populated areas of the world where it is being consumed. The impact to food supply chains can be summed up in three words: They’re getting longer.

Complex Situation

Long food supply chains are actually far from a simple matter because they tie into a number of social and environmental issues, including the global carbon footprint, product quality and sustainability, too. 

“Food miles are a concern that all quarters of the industry will need to address in order to maintain a sustainable food supply chain,” notes Siva Narayanan, director of international operations and warehousing at Solvay, a leading industrial products company and provider of ingredients for consumer products. “The additional carbon footprint created by the longer supply chain is the enemy of food production. Our industry is committed to reducing our carbon footprint, yet by extending the length of the supply chain it puts pressure on that goal.

“Secondly, the differential between the dates available for consumption and the expiry dates [shelf life] is becoming narrower. At some point, it becomes extremely difficult and expensive to maintain a reliable supply of safe products. We are already experiencing problems because of a practice called ‘slow steaming’ where the container ships slow down to save on fuel costs. This may help their bottom line, but it does not help the food miles situation.”

Other industries have dealt with longer supply chains by balancing transportation flows between different transport modes, often using air freight to move high-value, short-shelf-life products to market. In the high-tech industry, the full-price shelf life of a new chip or memory device is short because the next, better version is only months away. But those products are also very lightweight and high value. The same can’t be said for a pallet of fruit, or a truckload full of dairy products.

Moment of Truth

Ocean freight handles the lion’s share of intercontinental food shipments. Container vessels carry huge volumes of products at price points that make a global food chain highly competitive to locally produced goods. Over time, globally sourced products will put local suppliers out of business.

But what happens when it reaches a tipping point?  Imagine the following:

  • Political pressure on the environmental cost of the larger carbon footprint could lead to laws or penalties for long food chains.  That makes food more expensive for those who can least afford it.
  • Spoilage and short-shelf-life concerns force producers to add in preservatives, which could lead to all kinds of unknown problems and political fallout.
  • Growing consumer markets in the developing world place enough demand on a food supply chain that is already so long and stretched so thin, that suddenly supply can’t meet demand.

The food industry will need to begin thinking like its counterparts in other industries. Supply chain practitioners in pharmaceuticals, retail, apparel, automotive and hi-tech industries have begun to up their game in terms of the way they run their global operations. These companies have adopted advanced practices around processes and technologies under the umbrella of “operation excellence” to compete and differentiate in the global arena.

Supply chain technology has advanced to a point where companies can now get their own global operating platforms via the cloud versus having to spend countless millions of dollars and years of implementation time to get a handle on what’s happening across their value chains. 

Twenty years ago, Walmart launched its own satellite communication system to better collaborate with partners and efficiently get product to a growing network of stores. It blazed a trail and proved operational excellence was key to sustained global growth and success. 

The food industry needs to look at its counterparts and adopt those best practices. Sustainable food supply chains can exist, even in a world of long food miles. 

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