We know the challenges of the pandemic changed a lot in the food industry in 2020 and they continue to impact the entire value chain in 2021. Priorities changed as the focus shifted to getting products produced, processed and available at retail. One of the trends that got pushed aside during 2020 was sustainability.
This has been an issue and do not think it is going anywhere, it is here to stay.
We know consumers and regulators are expecting change.
There are three key areas to focus on:
- Packaging
- Food waste
- Sustainable business practices
Packaging
Consumers do expect food and beverage products to be moving in the direction of more sustainable options. This is a complicated issue. What might appear to be more sustainable because it is compostable is not always the best solution for the entire issue. We also need to be concerned with the raw materials, the process to produce the packaging and even the weight for freight. Another challenge to packaging is the recycling and composting capabilities are different from region to region and in many cases, it is a municipal responsibility. One area might be able to accept some types of plastic for recycling whereas another has to put the same container in the garbage.
One interesting change that has happened because of the pandemic is that there are more products being produced for products sold at retail. Prior to 2020 most of the packaging companies seemed to focus on food service and quick service restaurants. The volume at Subway or Tim Hortons was so big they were working hard to find solutions for this channel. With the shift in volume from food service to retail they seem more focused on packaging for food products sold at retail. If you were trying to explore options in 2019 and could not find something viable, check again. The availability and cost might have changed as more volume brings cost down.
We do see examples where packaging can differentiate and in the case of the English cucumbers from Houweling’s even got them to shelf. If you do have a story to tell with your packaging remember to tell it. Do not assume just because you have researched this and your customers and consumers tell you it is important that they will notice. Share on social media and be prepared to engage in the conversation.
Food waste
Food waste has been an issue in the food and beverage industry for a long time. It became much more of an issue when people started to realize how much food was being produced and never consumed. As you can see in the Macleans magazine image there are issues throughout the value chain.
All of the major retailers in Canada (with the exception of Costco) committed to reduce food waste by 50% by 2025. That is a huge number and one that will not happen easily. Certainly the shift from food service to retail will ensure there is some reduction in food waste. If the retail stores are being operated properly with more volume they should be able to reduce waste. With close to 50% of the issue at the consumer level there will need to be change with package sizes, BB dates and many other components to make a significant reduction in the food waste in Canada.
Producers and processors should be working to find opportunities because you know your customers will be looking for you to play your part. That is not easy given the challenges of the pandemic and all of the other things on your to do list. If possible, establish baselines so you can prove the impact of your efforts and continue to look for opportunities to reduce food waste. If you think of it as trying to improve your marketable yield or reduce waste to lower your cost of goods sold it is a different perspective.
Sustainable business practices
Customers and consumers are looking for producers and processors to implement and support sustainable initiatives. This is a broad topic and one where you can control more of the story. If you are doing positive things share and educate your customers and consumers. People do like some good news these days.
There are examples of this with your customers. Loblaw recently announced the partnership with Loop and also you can find the FlashFood app that helps consumers find reduced products before they are destroyed. Sobeys also eliminated plastic bags from their stores before they were mandated to. When your customers are doing these types of things, they will expect you to do something as well.
One company doing a lot to tell their story is Maple Leaf. They really do make this a point of differentiation and it appears to resonate throughout their business. You can check out their website with this link:
The last 12 months have been some of the most challenging months for the food industry. As we move through 2021 priorities will shift and sustainability will become more important in the marketplace again.
If you missed the third webinar in Perennia's preparing for retail success series, here is the recording:
On March 3rd I will be presenting as part of the “Preparing for Retail Success” webinar series. Getting a food product to the shelf is a major accomplishment, and a lot of work is required. Keeping it on the shelf is just as much work. We will explore the programs required, the investments you need to make, the communication you need to initiate and the results you need to deliver to keep your product on the shelf.
At the end of March I will be moderating a panel of producers and industry experts on "Consumer Trends In Agriculture" as part of the Minister of Agriculture Digital Series.
If you have any questions about how to get your local products on the shelf or in the shopping cart you can always call me at (902) 489-2900 or send me an email peter@skufood.com.
Peter