Environmental protection and sustainability have been hot-button issues for some time. Driven largely by consumers who want healthier options that don’t cause damage to the planet, sustainability is having a significant impact on the global food supply chain.
On its website, the World Wildlife Fund (WWF) says, “By 2050, the world’s population will reach 9 billion, the global middle class will grow from 2 to almost 6 billion, and the consequent demand for food may at least double. So how can we produce enough and good quality food for all these people without destroying the planet, and jeopardizing our future?”
This is an excellent question that many supply chain partners are struggling to answer. From seed to factory to store, here are some of the ways businesses are working to build a more sustainable food distribution network.
How the Food Supply Chain Works
The food supply chain involves a complex system of synchronized actions, individuals, and processes that manage and distribute food from the point of being a raw material to the final stage of being consumable products.
Farmers are the initial food producers. They provide food products in a raw state, such as vegetables, fruits, grain, and meat. These materials are shipped to processors, where they are transformed into products like consumer packaged goods or processed meat.
Distributors move and store these products in large warehouses and distribution centers. From there, the food makes its way to consumers via grocery stores or restaurants.
What is Sustainability in Food Distribution?
Sustainability in food distribution is about reducing food waste and lowering the effect the food supply chain has on the natural environment as products move from farm to table. Sustainability benefits more than just the environment. By limiting water and energy consumption, lowering food waste, and creating more sustainable business models, businesses can become more profitable.
Sustainability requires an industry-wide commitment to achieve the highest impact. Inefficiency in one area can lead to higher costs for companies further along the supply chain. For both business and environmental reasons, more and more organizations in this sector are looking for ways to improve their sustainability efforts.
Consumers Prefer to Support Eco-Friendly Brands
Scientists worldwide agree that the planet’s climate requires immediate action to avoid catastrophic consequences. And consumers have taken these warnings seriously. According to a survey by The Economist, consumers believe that companies have as much responsibility as governments to focus on positive environmental changes.
There has been a 71% increase in online searches for sustainable goods over the past five years. Consumers are more interested than ever in giving their support to brands that are doing something to combat climate change. According to a McKinsey & Co. survey, 66% of respondents say they consider sustainability when making a purchase. While quality and affordability are still important factors, many consumers are willing to pay slightly more for products from brands that focus on sustainable matters.
Current Issues With Sustainability in the Food Distribution Network
Most supply chains, the food distribution networks included, have operated on a precarious foundation. When the COVID-19 pandemic hit, those foundations crumbled, and supply chains have continued to struggle.
One of the ongoing issues with the food supply chain is that it remains too fragmented. Participants aren’t linked in any meaningful way. Governments are also creating more regulations that apply to food safety, and there are some fraud issues where bad actors try to misrepresent items or processes in the food supply chain.
Steps to Building a Sustainable Food Distribution Network
Sustainability has become an overriding goal of many food supply chain participants for a variety of reasons. Consumers want to support more sustainable brands. But studies also show that practicing sustainability leads to higher profits. Here are some of the ways businesses are building a more sustainable food distribution network.
On the Farm
At the agricultural level, farmers are implementing a variety of solutions, including using renewable energy sources, water conservation, and even vertical farming. Water is a major consideration since about 39 percent of all freshwater used in the U.S. is for crop irrigation. Farmers are looking at ways to use water more efficiently using things like drip irrigation and data to control releases.
Processing and Manufacturing
T
echnology has always been a game-changer in food production. It makes operations more efficient and cost-effective. Now it is also improving sustainability by adding traceability throughout the supply chain.
By using technology like RFID scanning, food processors and manufacturers can monitor where raw materials are as well as key data about them, such as temperature and humidity levels. Better processing equipment and machinery at this stage of the food distribution network can help lower energy consumption and reduce food waste.
Transporation and Distrubtion
Transportation has always been an essential element of the food supply chain. Things like cold storage add a complication to this process. But leveraging technology can help supply chain participants be more efficient. For example, RFID data can alert transporters that there is an issue with temperature levels in time to prevent massive food spoilage. Advanced insights can help transporters create more efficient delivery routes, reducing their fuel consumption and carbon footprints.
Warehousing and Fulfillment
It takes a tremendous amount of energy and resources to operate a warehouse or major distribution center. And even more when cold or frozen storage is a requirement. Warehouses can use motion-sensored LED lighting to save a ton on energy costs.
Warehouses can also continue to leverage the power of RFID tags to optimize the picking and packing functions of order fulfillment. Instead of having to search for items and scan them by hand, a warehouse management system (WMS) will give the item’s precise location, and RFID tag readers will record the movement of the products automatically in the system.
The evolution of supply chain systems is bringing more transparency to the food production process, lessening heavy administrative and compliance burdens, improving financial results, and minimizing environmental impacts. Food supply chains must become more sustainable through direct cooperation between producers, logistics companies, and retailers to create more resilient systems.
