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Sustainable food systems thanks to Covid?

September 20, 2021

reading time: 8 minutes

by Baiyun Chen, LGT

Sustainable food

How Covid-19 and the EU Green Deal are shaping the future of our food system.

The Covid 19 pandemic led to significant disruptions in the food supply chain. After the beginning of the first wave, people soon started to fear shortages: Would supermarket shelves empty? Would people have to buy as much as possible as quickly as possible to make ends meet in the worst case?

These scenarios did not occur. The food supply proved remarkably resilient during the crisis. For example, the state of emergency caused enormous stress in agriculture as well as in the areas of processing, transport and logistics, but suppliers responded quickly and innovatively: For example, they expanded the use of delivery methods like “click and collect” services – order goods online and collect them at defined locations – and online sales. Farmers started using digital platforms to sell their products directly to consumers. Restaurants switched to providing take-out and delivery, with some offering grocery-like services, e.g. meal kits instead of cooked food.

Fresh food
During the pandemic, retail demand soared for fresh food. © istock

Also, we've seen rapid and unprecedented consumer demand shifts as a direct result of containment measures to control the spread of the virus. Retail demand soared for fresh, frozen and packaged foods in the second half of March 2020, and has remained about 15-20% higher than usual.

There is also a strong increase in e-commerce. For instance, first-time users make up 41% of US online grocery shoppers in the wake of the pandemic. It is estimated that Covid-19 will result in a four to five year pull forward in online penetration of the global grocery market and permanently change the grocery retail landscape. These shifts are reshaping dietary habits and consumer behavior over the longer term, which poses an opportunity to accelerate transformations in the food and agriculture sector to build its resilience.

The European Green Deal transforms our food system

The European Green Deal, cornerstone of the EU's recovery plan, is a set of policy initiatives and one element of the fiscal stimulus program launched by the European Commission. Its overarching goal is to make Europe climate neutral by 2050, which entails actions and investments towards resource efficiency as well as a clean and circular economy.

As an integral part of the Green Deal, the “Farm to Fork Sustainable Food Strategy” aims to design a fair, healthy and environmental-friendly food system through ensuring sustainable food production and promoting healthy and sustainable diets.

Covid and Food
There may have been some shortages, but the food supply proved remarkably resilient during the crisis. © istock

First of all, the food industry is required to integrate sustainability into corporate strategies. The “Farm to Fork” strategy aims to reduce the environmental impact of the food processing and retail sectors by taking action on transport, storage, packaging and food waste.

Secondly, a shift towards healthy and sustainable diets is emphasized and facilitated. Mandatory front-of-pack nutrition labelling will be introduced in 2022, and the food supply chain will be highly digitalized to improve the accessibility of food information in order for consumers to make healthy and conscious food choices. Digitalization will also enable farmers to make better decisions regarding environment and climate, by taking up precision farming, artificial intelligence and new green technologies.

EU Green Deal
The EU aims to reduce pesticides by 50% by 2030. © istock

The “Farm to Fork” strategy unveils new opportunities for all operators along the food value chain, but especially for those with sustainable practices. The European Commission proposes to spend EUR 10 bn on research and investment on the food supply chain, such as the use of digital technologies and sustainable management of nature for agri-food.

Organic food production will be in focus as the EU aims to reduce usage of pesticides by 50% and of fertilizers by 20% by 2030, whilst the share of organic farming will be increased by 25%. Moreover, tax incentives are being designed to encourage organic food consumption and drive the transition to a sustainable food system.

Another key area of research will relate to increasing the source and availability of alternative proteins, like plant- and insect-based proteins, as well as meat substitutes.

Key takeaways

  • The Covid-19 pandemic has caused major shifts in food distribution and consumption patterns
  • The European Green Deal promotes investments in sustainable food production and healthy diets
  • We reiterate that food and nutrition is a long-term sustainable investing theme and see further upside potential

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