Major challenges in the food industry  

Introduction  

The food industry has faced various challenges over the past year. Rising inflation, environmental challenges, and supply chain issues have left the sector reeling. A growing population makes it even harder to meet the demand for food and resources¹. This article will break down the myriad of problems affecting the food industry. 

Supply chain issues  

The Russian invasion of Ukraine in February 2022 continues to affect global food industry. Firstly, Ukraine has traditionally been a major global supplier of grains and fertilisers, but since the start of the war, the production and export of Ukrainian crops has declined². Many companies have been forced to reformulate recipes (and therefore packaging) to account for the unavailability of some ingredients. Secondly, gas is essential in the production, manufacturing and transport of food. The invasion has sent the price of gas skyrocketing³, with the increased costs being passed onto the consumer⁴.  

Rising costs  

The UK has been experiencing a cost-of-living crisis since 2021, making it difficult for many families to afford basic needs such as food, clothing and heating. The initial inflation occurred because of the Covid-19 pandemic and subsequent lockdowns⁵. As the country began to recover from the pandemic, Russia’s invasion of Ukraine, caused further inflation, and the cost of living continues to increase⁵. Since 2020, the price of a wholemeal loaf of bread has increased by 43%⁶. Rising costs have forced people to cut their food budget, and switch to cheaper calories. As a result, many people are consuming less fruit, vegetables and wholegrains, and more processed, high fat salt sugar (HFSS) products⁵. This emphasises the health gap between those of high- and low-socio economic status. 

The cost-of-living crisis has driven many families to become reliant on foodbanks. The Trussell-Trust reported a 50% increase in emergency food parcels, compared to pre-pandemic¹. Despite generous donations from foodbank supporters, supply is not meeting demand. Foodbanks themselves must purchase food and resources, but with the increasing cost of food, this places risk on the survival of the charities⁷.  

HFSS regulations 

These new regulations pose restrictions for the promotions and placement of HFSS foods and drinks, within retail stores and online⁸. In response, some manufacturers have had to reformulate their products, improving the health profile, so that they comply with regulations. Despite us having national healthy eating guidelines, the food system in England promotes a diet high in processed, HFSS foods, being easily accessible, affordable and convenient. The regulations focus on tackling the source of the problem, the food environment and the food system.  

The HFSS regulations hope to concur health benefits due to reduced exposure and intake of HFSS foods⁹. However, the expected drop in sales of unhealthy foods because as a result of the HFSS regulations are difficult to quantify and analyse due to the cost-of-living crisis and inflation. It’s also worth noting that there are some grey areas in the regulations. For example, nut-based bars, which are naturally high in fat fall under the regulations despite nuts being a healthy ingredient, whilst plain nuts and seeds are excluded⁸. This can cause confusion for the consumer when marketing messages and regulations do not align.  

Climate change 

Rising global temperatures are leading to more extreme adverse weather events, including droughts, heatwaves, fires and floods. Some food systems are unable to continuously adapt to these vast changes, and extreme weather patterns can damage crops, livestock and fisheries around the world¹⁰. The inevitable loss of biodiversity makes agricultural systems more vulnerable to damage and failure, which is further destroyed by the extreme use of pesticides. Irreversible damage to our ecosystems poses an existential threat to long term food security¹⁰.  

Consumers are increasingly aware of the impact of climate change on our food system and are therefore searching for food products/ companies which align with their sustainability values. In a bid to address this, more companies than ever before are actively working to improve their carbon footprint. Many of our clients at HRS are fully committed to sustainability. For example, Danone has committed to reaching net zero emissions by 2050 and are developing and promoting the regeneration of agriculture¹¹. Nestle is also committed to reaching net zero emissions by switching to 100% renewable energy and working with farmers to grow food more sustainably¹². 

Conclusion  

Our rising population demands more food than ever before. The food industry is also facing added pressure of global geopolitics. This is having a significant impact in the UK and globally, as food manufacturers pass on rising costs to the consumer. As a result, we’re seeing increased levels of food poverty, poorer dietary choices, and more pressure on the already stretched healthcare system and supply chains.  

References 

1. Oxford Martin Programme on the Future of Food. Challenges facing the food system [Internet]. [Cited 2023 Oct 12]. Available from: https://www.futureoffood.ox.ac.uk/food-system-challenges#:~:text=Food%20production%20will%20increasingly%20be,scarcity%20and%20wider%20biodiversity%20issues.   

2. European Council, Council of the European Union. Infographic – How the Russian invasion of Ukraine has further aggravated the global food crisis [Internet]. 2023 [Cited 2023 Oct 12]. Available from: https://www.consilium.europa.eu/en/infographics/how-the-russian-invasion-of-ukraine-has-further-aggravated-the-global-food-crisis/#:~:text=Ukraine%27s%20grain%20exports%20are%20still%20suffering%20from%20the%20war&text=The%20EU%20established%20what%20are,all%20agricultural%20exports%20from%20Ukraine 

3. UK Parliament. The effect of the war in Ukraine on UK farming and food production [Internet]. 2022 [Cited 2023 Oct 12]. Available from: https://commonslibrary.parliament.uk/research-briefings/cdp-2022-0147/  

4. European Parliament. Russia’s war on Ukraine: EU food policy implications [Internet]. 2022 [Cited 2023 Oct 18]. Available from: https://www.europarl.europa.eu/RegData/etudes/ATAG/2022/729368/EPRS_ATA(2022)729368_EN.pdf 

5. The Food Foundation. From purse to plate: implications of the cost of living crisis on health [Internet]. 2023 [Cited 2023 Oct 12]. Available from https://foodfoundation.org.uk/sites/default/files/2023-03/TFF_Cost%20of%20living%20briefing.pdf 

6. Sky News. Cost of living: The most popular branded foods that have soared in price over the last two years [Internet]. 2022 [Cited 2023 Oct 18]. Available from: https://news.sky.com/story/cost-of-living-the-most-popular-branded-foods-that-have-soared-in-price-over-the-last-two-years-12747429 

7. The Trussell Trust. Five ways the cost-of-living crisis is impacting food banks [Internet]. 2022 [Cited 2023 Oct 12]. Available from https://www.trusselltrust.org/2022/09/28/five-ways-the-cost-of-living-crisis-is-impacting-food-banks/ 

8. GOV.UK. Restricting promotions of products high in fat, sugar or salt by location and by volume price: implementation guidance [Internet]. 2023 [Cited 2023 Oct 12]. Available from https://www.gov.uk/government/publications/restricting-promotions-of-products-high-in-fat-sugar-or-salt-by-location-and-by-volume-price/restricting-promotions-of-products-high-in-fat-sugar-or-salt-by-location-and-by-volume-price-implementation-guidance  

9. Muir S, Dhuria P, Roe E, Lawrence W, Baird J, Vogel C. UK Government’s new placement legislation is a ‘good first step’: a rapid qualitative analysis of consumer, business, enforcement and health stakeholder perspectives. BMC Med. 2023 Jan 26; 21(33). Available from: https://bmcmedicine.biomedcentral.com/articles/10.1186/s12916-023-02726-9   

10. UK Parliament. Impact of climate change and biodiversity loss on food security [Internet]. 2022 [Cited 2023 Oct 12]. Available from https://lordslibrary.parliament.uk/impact-of-climate-change-and-biodiversity-loss-on-food-security/  

11. Danone. Our climate actions [Internet]. 2023 [Cited 2023 Oct 18]. Available from: https://www.danone.com/impact/planet/climate-actions.html  

12. Nestle. What is Nestle doing about climate change? [Internet]. 2023 [Cited 2023 Oct 18]. Available from: https://www.nestle.com/ask-nestle/environment/answers/nestle-climate-change#:~:text=Share%20this%20page-,What%20is%20Nestlé%20doing%20about%20climate%20change%3F,more%20sustainably%2C%20using%20regenerative%20agriculture.