One of the biggest challenges facing global food companies today is satisfying the demands of today’s consumers.
“(There) are the three key questions every consumer is asking…,” said Hans Johr, corporate head of agriculture at Nestle, one of the world’s largest food companies.
“What is in my food? Where does it come from? … How was it made?”
“If you are not able really to answer these questions, you have a problem with credibility and you have a big problem with trust.”
Johr was in Saskatoon last week to attend an international conference hosted by the Global Institute for Food Security (GIFS).
He said Nestle and other large food companies are continuously assessing their business practices to ensure they conform with consumer values.
Today’s food consumers are concerned with issues such as animal welfare, employment standards, sustainable and ethical production practices, organic or non-genetically modified production systems and local food procurement.
Adding to the challenge is that consumer values often vary significantly from country to country and from region to region.
Consumer preferences are further fragmented by differences in socio-economic status, cultural values and age.
Johr said younger food consumers in particular are demanding more information about their food and are more likely than their older peers to pay a premium for food that is produced in a manner that conforms to their value systems.
“The consumer’s behaviour is changing so massively quickly…,” he said.
For global food companies like Nestle, trends in consumer behaviour can have huge consequences on business practices.
Acceptance of new technologies, such as genetic modification of food crops, is an example.
In Europe, consumer attitudes toward GM foods continue to influence regulatory policies and have potential to disrupt global trade and supply chains.
New technologies, including gene editing platforms, such as CRISPR, have the ability to boost global food production on a massive scale but only if they are accepted by consumers.
A recurring theme at the GIFS conference was the need for scientists, researchers and technology developers to do a better job of reaching out to consumers.
Food buyers around the world must be convinced that innovations are safe and beneficial.
However, deployment of new technologies without consumer acceptance could have costly and unintended commercial consequences.
“We have to be extremely careful in how we use science and new technologies,” Johr said.
“If you do not have consumers accepting these new technologies,” trade barriers will follow, he told an audience at the conference.
“These trade barriers are extremely efficient (at disrupting trade) and will probably, in the future, be even bigger than they are today.”
Johr said concerns over trade disruptions linked to consumer attitudes and differences in food regulatory policies have prompted many food companies to re-examine their food procurement practices.
Sourcing food locally from growers whose production practices are known, accepted and endorsed by a recognized certification body is becoming more common.
“In the world food system, local is becoming the new global,” Johr said.
“And that is mainly due to the behaviour of consumers.”
Johr said the Sustainable Agriculture Initiative platform (SAI) was developed largely in response to consumer attitudes, which encourage sustainable production practices.
According to SAI, sustainable agriculture is defined as “the efficient production of safe, high-quality agricultural products in a way that protects and improves the natural environment, the social and economic conditions of farmers, their employees and local communities, and safeguards the health and welfare of all farmed species.”
Nearly 100 food companies have now signed onto the SAI platform including large multinationals such as McDonald’s, Kellogg’s, Unilever, Pepsico, CocaCola, Cargill, Bunge, Danone and Louis Dreyfus Commodities.
Canadian members include McCain, Pulse Canada and Grain Farmers of Ontario.
When attendees at the GIFS conference in Saskatoon were asked if they had heard of the SAI platform, only three individuals raised their hands.
“It’s the best kept secret in Saskatoon,” said Johr.
Additional information about the SAI platform can be viewed online at www.saiplatform.org.