Business Leaders Forum 2023: It’s never been survival of the fittest

“When I entered the food industry, life was a lot simpler,” one delegate said, addressing the room of 40-strong food and drink leaders at our inaugural Business Leaders Forum (BLF) last week. “When you talk about a crisis, you now ask: ‘which one?’”

Indeed, the level of pressure on the sector has never been quite so intense and the discussions had during the forum lay bare the evidence of how many priorities the sector need to juggle. The problem is when ‘priority’ becomes plural, which of those priorities trump the rest?    

The impact of climate change on food and drink manufacturing

“The short-term issue is inflation, the long-term is climate change,” one BLF participant suggested.

Others agreed, with a delegate describing climate change as “the elephant in the room that we still ignore” and that has not yet demonstrated its true devastation.

Another individual interjected, I disagree, climate change is here now; we are dealing with it. We had to deal with 40-degree heat last year, and this summer, it’s set to be higher.”

Thinking wider than Net Zero

“Climate change is affecting us sooner and more severely than most have predicted, and participants [of the BLF] noted that there are already significant impacts on food production,” Neale Powell-Cook, owner of Golden Arce Foods said.

“With this in mind, and the high level of emissions associated with our sector, it appears vital that businesses reduce their carbon emissions as rapidly as possible towards achieving Net Zero. Government regulation in essential areas and the willing participation of retailers are urgently required to make this process happen.”

However, Louise Manning Professor of Sustainable Agri-food Systems at the University of Lincoln emphasised that, “whilst delivering Net Zero emissions in line with current targets is important”, it is also “crucial that food businesses develop their organisational strategies to consider the wider environmental and social impact of their operations”.

For companies to be resilient in the future, Manning believes these strategies need to “extend far beyond developing offsetting approaches to deliver overall net zero emissions”.

New food safety challenges as a result of climate change

The subject of climate change also brought forward concerns around food security and safety. As the climate changes, there is evidence to suggest that mycotoxins are becoming more prevalent in areas which they have not before, at the same time harsher weather conditions can lead to unhealthy soil, floods, fires and failed harvests.

As a few attendees pointed out: How do you manage this, when a low-risk region suddenly becomes high risk? How do you manage this, when a crop is no longer able to grow?

With such scenarios on the table, companies will need to begin thinking five steps ahead and cross-collaboration will be essential.

“We’re in a nervous market right now. We are delaying investments because of uncertainty and that needs to change. I think it’s important that we take a long-term view – as much as we can,” I.T.S owner, Mike Bagshaw, stated.

“The impact of climate change will continue to intensify, injecting more volatility into global supply chains, with extreme weather events hitting livestock and crop production,” Provision Trade Federation’s director general Rod Addy added.

This is not a singular category or company issue, this is a sector-wide issue, another attendee highlighted.

Overall, the group acknowledged that a developed food security strategy is required.

“Climate change is the multi-car pileup down the road, meanwhile we’re trying to sort out the stroppy kids in the car whilst travelling 70 mph towards it,” one person analogised.

“Once we have Covid out of the way and Brexit sorted,” they continued, with an underlying tone that suggested neither would be ‘sorted’ anytime soon, “people think things will return to normal, but things won’t ever return to normal. Things will never be the same as they were in 2019. No matter how quickly we deal with climate impact, we will always be on the backfoot unless we have a strategy implemented.”

Food fraud and trade

Ten years following the Elliott Review (that succeeded the horse meat scandal), the issue of fraud was a key topic for the room and the group discussed this in relation to both climate change and regulation.

“What happens when a crop disappears because of climate change – it becomes more valuable and that’s when fraudsters move in,” cautioned a member of the group.

Indeed, with accessibility issues, whether that’s a result of climate change, price hikes or war, also comes the opportunity for unscrupulous players.

“We have to be concerned about food fraud,” another warned. “As the price of food goes up – and I believe it will continue to do so – then the criminal world will take advantage. It’s perhaps more cost effective to smuggle food than illegal substances.”

Another lure of food and beverages is that the profitability of food fraud is great and the consequences if caught are a lot less than, for example, dealing illegal drugs.

The current legislation is not fit-for-purpose, an attendee contended – with many nodding heads responding.

“We don’t have the facilities at border control posts to control what’s coming in,” they explained, suggesting that this was not a concern for industry but rather UK Government. They insisted that the UK Government needed to act, before adding the caveat that they may not have the capacity to do so. 

Continuing the conversation, an attendee underscored the great work of FIIN (the Food Industry Intelligence Network – another recommendation of the Elliott report), a system by which the industry can determine what’s happening across the sector and ensure integrity.

“The logic there is if the food fraudster looks at the UK and sees the lights on, they’ll move on. It deterred fraudsters to look here [the UK]. Counter to that is the government’s move to completely leave our borders open. Our food sector relies on imports disproportionately. The government is aware but it’s not a priority until the next scandal comes.”

Although it was acknowledged that trade is an important string to the UK’s bow, it was also agreed that Britain needed to become more self-sufficient in the wake of its vulnerability. This will likely mean a push towards local – the next step is convincing the consumer, who have become far too acquainted to strawberries in the winter.

Decision-making

Remaining on the subject matter of regulations, several in the room expressed a concerned that the UK Government may be rushing new law.

The benefit of fresh thinking was highlighted – certainly new law can give way to new opportunity – but the sheer amount of work placed onto civil servants was also flagged, with one attendee saying it’s too much to manage in the timeframe given.

Conversely, there were also concerns about simple decisions taking too long – and the reason for this was debated, with one person suggested that the loss of EFSA (European Food Safety Authority) has hindered decisive action in the UK.

Dismay over vet checks were also thrown into the mix, as the room voiced their frustration about food being wasted (therefore adding to sustainability, food security and cost woes) due to delays. With a shortage of vets and no suitable storage facilities at ports, long waits often mean spoiled food. Moreover, as one delegate pointed out, these checks only apply to exports (food going out of the UK) and not imports (food coming in). “There’s no level playing field.”

As a result of the checks, one attendee said that the sector is losing companies because it’s not cost-effective.

There seems to be a consensus – at least at BLF 2023 – that the government doesn’t understand the challenges faced by the food manufacturing industry.

Commenting on this, Paul Milner, Director of PMMS, told Food Manufacture: “There was a feeling [in the room] of complete lack of involvement and comprehension about what is involved in the manufacture of food in the UK by our representatives in Parliament – those same people who encouraged us all to be celebrated for the amazing work the industry carried on performing through the dark days of Covid lockdowns.

“Without their awareness and interest in how food gets to everyone’s tables everyday, it’s unlikely they’ll be able to provide any sort of strategic framework to support and develop something as vital as the whole food supply chain.”

The good news is that the F&B industry is a powerhouse of innovation. As one attendee stated, with the government being in such disarray, being able to come up with our own answers is the way forwards – and that’s why forums like BLF are so important.

Technology will help but therein lie challenges

“What is certain is the food sector will face further black swan moments,” Sterling Crew, Chair of the Food Authenticity Network’s Advisory Board, noted. “A term that is used in economics to describe events that are, like the bird not known in the west until the discovery of Australia, unpredictable or unforeseen. At the moment it feels that we are facing a whole flock of black swans. With more appearing just beyond the horizon.”

So with so many ‘swans’ to contend with, how can we proceed?

The last few years has certainly done a good job in highlighted the fragility of our food system in the UK, but that has also forced businesses to put more thought into supply chains and sourcing. This intense period will surely give way for an intense period of innovation. After all, as one attendee stated, “necessity is the mother of invention”.

Much of the room agreed that the F&B industry has been slow to invest in technology and therefore, weren’t as au fait with it as other sectors. It was added that there have also been few use cases in food and drink to use as a reference point.  

“It’s not always innovators who aren’t successful, but rather early adopters,” one attendee mused.

Product strategy director at Columbus IT, Kevin Bull, showed optimism about the role technology will play in the future: “It’s been said before, but data really is one of the most valuable assets that a business can own. However, until recently it has been challenging to extract real value from that data. Modern data processing and AI tools simplify the task of bringing together information from many sources and getting fresh, timely insights into real world scenarios.

“For example, crop yields can be predicted from in-field sensors, consumer demand trends can be identified from POS data, risks in supply chain failures can be identified and manufacturing equipment up-times, and therefore productivity, can be driven upwards through predicting the need for maintenance. These actionable insights can be used to deliver real business benefits through improved supply chain planning and through business process automation.”

Another delegate added to this, saying that although seeing is believing, proof of concept is rising and change is coming. Whilst another individual assured that the government were very interested in technology and were putting much investment into this “exciting” area.

Reflecting on the tech portion of the discussion, Milner said: “There were some great ‘best practice’ examples of the measures being implemented to try to drive manufacturing efficiencies, drive down energy use and reduce food waste – including innovative use of AI and live data capture to drive immediate on-line performance improvements, and the use of ’smart bins’ to analyse, identify and segregate different types and sources of food waste from production lines.”

The challenge, according to one attendee, lies in automation’s inflexibility; as such, there will always be an element of human interaction needed.

Another delegate expanded on this, saying the difficulty was differentiating between substitution and complementarity tech.

Of course, this is the entire concept of Industry 5.0 and our sector will need to learn – perhaps more quickly than it wants to or anticipated – how tech and humans can collaborate. One imagines that predictive AI will be employed to resolve certain inflexibility issues and repetitive tasks saved for the tech, whilst humans focus on more fulfilling responsibilities. 

We must be able to pivot

“Covid constraints, CO₂ shortages, Brexit bureaucracy and shipping disruption seem to be fading into the distance through the 2022 rear view mirror,” Milan Shah of Virani Food Products told Food Manufacture, as he reflected on the key talking points of the morning. “While we focus on navigating the obstacles remaining on the 2023 road ahead - tight labour markets, ingredients and energy costs still somewhat dependent on the evolving outcomes of war, less abundant capital markets and continued currency volatility as well as regulatory uncertainty.

“However, the challenging contours of the longer-term landscape remain unchanged: productivity is in secular decline, climate change and anti-microbial resistance grow ever urgent, food security now eludes even more mouths, and we need to come to terms with our relationship to accelerating rounds of technological innovation. Of course, therein also lie the opportunities.”

Indeed, there were a lot of challenges raised at BLF 2023, but what is clear is that if food manufacturers want to survive and thrive, they’ll need to adapt and work together.

As a delegate stated: “Charles Darwin never said it’s survival of the fittest, he said it’s survival of those who could adapt to change.”

A big thanks to sponsor Columbus, whom without, this brilliant event would not be possible.