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June 21, 2022

Food majors to miss 2030 carbon-cutting goal, study claims

AlixPartners’ research was based on findings from 235 food and drinks firms in EMEA and the US.

By Simon Harvey

The largest food and beverage companies in developed countries are set to fall short of an industry target to cut their carbon footprint for 2030, research claims.

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What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
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After analysing pledges made by more than 200 food and beverage companies based across EMEA and the US, management consultants at AlixPartners estimate carbon emissions will have been cut by 29% from 2019 to 2030. If that materialises, that would fall short of the global industry goal for a 38% reduction under the United Nations’ 2015 Paris Agreement and the Science Based Targets initiative.

AlixPartners, which came to its conclusion “having analysed the carbon-reduction commitments made so far by the largest western food and beverage companies”, said carbon emissions have so far only been cut by 1% since 2019.

As the world chases a sustainability strategy to limit global warming to 2 degrees Celsius under the Paris accord, and more ambitiously to 1.5 degrees, AlixPartners said food and beverage companies have a “lack of confidence” in their ability to meet carbon-reduction targets.

It said 49% of suppliers, 36% of manufacturers and 31% of retailers claim “to be very confident that they will meet their carbon-reduction goals related to their own carbon emissions (as opposed to those created elsewhere in their value chains)”.

Just Food has contacted the likes of Nestlé, Unilever and Danone in Europe for the food manufacturers’ thoughts on the findings, as well as Tyson Foods, Mondelez International and General Mills in the US.

Nestlé responded via a spokesperson: “At Nestlé, we remain focused on reducing our absolute emissions by 20% by 2025 and 50% by 2030 versus a 2018 baseline. We’ve already left peak carbon behind and are confident in our ability to deliver further significant reductions in line with our roadmap, which covers Scope 1, 2 and 3, in the years to come.”

French dairy major Danone declined to comment.

Andy Searle, a partner at AlixPartners, said: “Consumer-products companies need to determine what they need to do and who within their business needs to act within the next 12 months and then within the next 24 months.

“The ‘doing’ needs to be transferred from the sustainability teams to those in operational roles, and with those in operational roles empowered to take action and goals embedded across the company’s organisational culture. Speeding-up and scaling-up will be vital to driving a successful outcome.”

AlixPartners’ research was based on findings from 235 food and drinks firms in EMEA and the US assessed by the Netherlands-headquartered World Benchmarking Alliance, a body seeking to forward sustainable development goals.

The consulting business also analysed commitments made by the “west’s 13 largest food and beverage packaging companies”, as well as a survey of 200 sustainability and operations executives.

Scope 3 emissions targets, those coming from a manufacturer’s supply chain, unlike internal Scopes 1 and 2, were also found wanting.

AlixPartners said 27% of executives from suppliers, 13% of manufacturers and just 4% from retailers “are confident that they will meet their carbon-reduction goals relating to emissions made by other companies in their value chains”.

The consultants added: “This lack of confidence may have been exacerbated by companies’ limited certainty in measuring upstream and downstream carbon emissions across their value chains. The research findings reveal that only 34% of the executives from the suppliers surveyed feel that they are successfully measuring their downstream carbon footprint.

“Manufacturers show similar uncertainty, with only 25% claiming to be successfully measuring their upstream footprint and only 32% claiming to be successfully measuring their downstream footprint.”

Randy Burt, another partner at AlixPartners, said: “While it is encouraging to see the progress that has been made in cutting carbon emissions since the 2015 Paris Agreement, it is clear that greater collaboration is required across the food and beverage industry if its carbon-reduction goals are to be met.

“Manufacturers, suppliers and retailers alike need to look across their entire value chains to understand and exert influence all the way back to the start of those chains, as well as downstream towards the end-consumer, if they are to make truly exceptional progress on this front.”

Just Food guide: The road to net zero – Big Food’s emissions pledges

Just Food analysis: How ambitious are emissions targets of food manufacturers?

Just Food analysis: The challenges facing food manufacturers on Scope 3 emissions

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Free Report
img

What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

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