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Cultivating a More Sustainable F&B Business Model

Published: November 8, 2021

The food and beverage (F&B) industry has a unique relationship with agriculture.

Dependent on each other for survival, it’s a partnership that relies on the agricultural sector for the raw ingredients and the F&B industry to process how those ingredients end up on our tables. Yet this relationship is currently being tested as biodiversity and climate change impact how we live and consume.

Increasingly, momentum is building around how the food value chain can adapt to reduce any negative impact on the planet and communities. Several major companies in the F&B sector have now signed up to The Climate Pledge, which calls on companies and organisations to become net-zero carbon by 2040. Regulatory forces are also in play. More recently, initiatives such as the Global Methane Pledge, designed to reduce methane emissions associated with agriculture and food waste, are raising awareness and driving the F&B sector to rethink how they connect with the supply chain.

So what steps does the F&B sector need to consider to help cultivate a business model with sustainability at its core so that the transition runs smoothly?

#1 Manage the balance between profit and purpose

The values that underpin the F&B sector are often emotionally charged. What we eat and drink, production and packaging techniques, land use, biodiversity, farming methods and climate change are increasingly sensitive issues, particularly when considering the impact of emissions across the entire food value chain. Whereas in the past, more profits meant increased production, the industry now has to think more carefully about marketing its purpose to a critical consumer base. Pushing the envelope down the line is not the answer. Rather than exerting downward pressure on the supply chain to achieve consumer buy-in, adopting a portfolio of measures that address specific concerns will help manage the balance between profit and purpose so that sustainable values are clear.

#2 Build on relationships to address trends

The F&B sector is in the enviable position of having its own value chain through its long-standing relationship with farming. This ability to tap into what is in effect a circular economy gives the agility needed to solve many sustainability problems without relying on a network of other industries. Farmers can exert pressure on cooperatives and retailers to step up their sustainability efforts. Equally, those same cooperatives and retailers can nudge farmers in the right direction by showcasing new technologies and sustainable pathways. These close relationships and collaborations between farming and the F&B sector are already producing groundbreaking initiatives and give the confidence to farmers to commit to climate targets. Time will tell if these initiatives are enough to quell consumer fears about emissions. In the meantime, building on strong relationships to collaborate on creating, for example, ‘net-zero’ milk or tapping into the demand for plant-based alternatives can address trends and help develop a more sustainable F&B sector. Read more.

Alex Clarke

Alex Clarke

Senior Consultant

Hannes Zellweger

Hannes Zellweger

Managing Director, Sofies Zürich