Food Trends 2022: Sustainability & the Supply Chain Remain Top of Mind

Feb 7, 2022


Concerns surrounding climate change and sustainability are on the rise, as more consumers are paying closer attention to the personal impact their choices have on the environment. DLL, a subsidiary of Rabobank and a leading provider of financing solutions to the food & agriculture sector, explores what is driving market growth in the food industry and the trends to watch in 2022.

Embracing sustainability
Since the onset of the pandemic, consumers have become more conscious and are paying closer to attention to environmentally sustainable and ethical practices such as waste reduction, sustainable packaging, and the sourcing of products. According to Deloitte’s latest Sustainable Consumer research, environmental awareness amongst consumers has surged in the past year, with 85% making more sustainable lifestyle choices – up 17 percentage points from before the pandemic. In addition, consumers have been calling for more transparency surrounding where their food comes from and how it is made.

According to the 2021-2022 Food and Drink Report from Waitrose & Partners, 77% of respondents are concerned about the amount of plastic in their grocery packaging, and 71% have tried to reduce the amount of packaging they take into their homes. This trend has primarily been driven by members of GenZ (those born between 1997 and 2015), and their focus on sustainability is only expected to rise and continue in the years to come.

Reducing carbon footprints
A carbon footprint is the total amount of greenhouse gas emissions that anything – a person, organization, event or product – has produced. Food accounts for 10-30% of a household’s carbon footprint, while production accounts for 68% of food emissions. Given the impact this can have on the environment, consumers are starting to pay closer attention to reducing their carbon footprint. This is evidenced by the increasing popularity of plant-based and meatless products. Meat products have bigger carbon footprints per calorie than grains or vegetables. That’s because animals like cattle, sheep and goats produce a lot of methane gas. In 2016, they produced 170 million metric tons in CO2e of methane, according to a carbon footprint fact sheet compiled by the Center for Sustainable Systems at the University of Michigan.

A report by Kadence International on food and beverage trends found that the pandemic played a role, as there were several meat shortages and price spikes when meat-packing plants shut down. In the U.S., plant-based meat sales increased nearly 264% in the nine weeks ending May 2, 2020. The demand for plant-based substitutes extends beyond burger replacements—emerging categories such as snacks, dips, sauces, cheese, spreads, and creamers are expected to see double to triple their growth in the following year. For example, in 2021, Oatly—which produces milk, ice cream, and yogurt from oats—priced its IPO at $17 per share following its U.S. debut five years ago, giving it an implied valuation of $10 billion.

Supply chain challenges
As in almost every industry, the food industry is facing challenges as a result of ongoing supply chain issues. The global food supply chain is one of the most complex yet important logistics programs our world needs for sustainability. The main problems facing the supply chain include farming labor issues and shortages, poor communication between participants, increasing regulations, growing demands for grocers, and stress put on the restaurant industry.

Technology is evolving in order to help streamline and address these challenges. For example, supply chain technology systems or inventory management software—which utilize artificial intelligence and machine learning to improve traceability—can help detect spoilage and contamination before an item ever reaches its destination. Other tips to improve food logistics include monitoring tools, sterilization, proper education, and performing an audit trail. By managing logistics efficiently, suppliers can efficiently help to prevent foodborne illness, contamination, waste, loss, or a damaged reputation.

If you have any questions about how financing can support your food business, or needs of your customers, please contact us, or check out our website for more information.