ROB CAMERON: The very steps you wish to take to mitigate your impacts are the identical steps which might be going to extend your resilience within the face of elevated drought, warmth, floods, et cetera. You have a extra resilient farm once you’ve acquired a extra pure farm.
STUTI SETHI: If we might do it from scratch, how would we set it up in order that the entire system can profit from the best way that we produce our meals and do it in a manner that works with nature?
ROB: This will not be like opening a brand new manufacturing facility, the place on Day One, growth, the lights are on, you’re making issues, away you go, you’ve acquired manufacturing traces buzzing. No, within the case of agriculture and the pure world, you’re fairly often doing issues at the moment that’ll truly ship a payback in future.
LIZZIE O’LEARY: From PwC’s administration publication technique and enterprise, that is Take on Tomorrow, the podcast that brings collectively consultants from across the globe to determine what enterprise might and needs to be doing to sort out among the greatest points going through the world.
I’m Lizzie O’Leary, a podcaster and journalist…
FEMI OKE: …and I’m Femi Oke, a broadcaster and journalist. Today, how will we safe the way forward for meals?
LIZZIE: If you open your kitchen cabinet proper now—and to be sincere, any podcast, particularly Take on Tomorrow, is all the time higher with a bit snack—you’ll discover meals from all around the world: espresso from Brazil, chocolate from Indonesia, fruit from Nigeria, greens from Spain.
FEMI: I simply smiled once you mentioned fruit from Nigeria. I’m pondering of an incredible massive juicy plantain proper now. It’s fairly wonderful when you concentrate on it. And it’s all attainable because of a mixture of farms, producers, massive corporations, and transport that make up our meals system.
LIZZIE: But this delicate balancing act is beneath menace. Adverse climate, biodiversity loss, world tensions, and provide chain disruptions all imply that the best way we get our meals is susceptible.
FEMI: Exactly, Lizzie. And that raises a query for me. How can we defend our meals for many years to return? To discover the reply, we shall be speaking to Rob Cameron, Global Head of ESG Engagement at Nestlé.
LIZZIE: But first, we’re joined by Stuti Sethi, a thought chief with Strategy&, who spends lots of time interested by the way forward for meals—and what it means for the world. Welcome to the present.
STUTI: Thanks. Thanks for having me.
FEMI: Stuti, are you able to assist us perceive the place are we proper now. How does our meals system at the moment work?
STUTI: Sure. Well, look, I believe you mentioned it within the introduction, proper? We have producers, and that’s farmers and growers. They’re all around the world. Something like 600 million of them. On the opposite hand, we’ve got our customers, and we’re all customers of meals. So we’re speaking about 8 billion folks. And within the center, we’ve got a variety of corporations, and so they may very well be doing one thing so simple as taking wheat and milling it and turning it into flour. Or it may very well be rather more difficult, bringing substances from the world over to make the frozen pizza that you just discover in your shelf. And in that system, you’ve small gamers. You even have 4 very massive aggregators, or merchants, as we name them, who assist transfer these world commodities from the farmers and the growers to among the processing services. And then you’ve, in fact, the CPG [consumer packaged goods] corporations. There’s roughly ten actually massive ones the world over and lots of smaller ones there. And then you’ve retailers. And retailers are usually a very local-for-local enterprise. But on the similar time, there are a couple of massive corporations concerned in that house as properly.
LIZZIE: Stuti, we’re going to return again to you to listen to extra concerning the function of companies, customers, and policymakers in securing our meals methods a bit bit later. But first, Femi, I do know you’ve been digging into this subject with one of many greatest corporations in meals manufacturing.
FEMI: Absolutely. We needed to grasp how companies are making ready for a few of these challenges. So I spoke to Rob Cameron. Global Head of ESG Engagement at Nestlé. And I started by asking him to clarify the challenges going through Nestlé specifically.
ROB: Everything in our meals methods begins with agriculture. We are fully dependent upon agriculture for our firm’s success and for delivering the meals and drinks that individuals take pleasure in around the globe. And agriculture, in fact, relies on nature. And but, we additionally know the pure world is beneath terrific stress. When you have a look at edible vegetation, you recognize, there’s one thing like 7,000 edible vegetation on the earth. Only about 150 or so of them are literally cultivated. And one thing like 60% of the world’s energy come from three vegetation. I imply, if that isn’t a vulnerability, I don’t know what’s. So there are these spots of vulnerability within the meals methods that I believe, you recognize, actually are massive dangers.
FEMI: Can you give us an instance of the way you’re adapting or how it’s altering the best way you do enterprise and produce merchandise?
ROB: Let’s simply observe it again to, form of, 2004, 5, 6, with this idea of making shared worth. And this was the belief on the a part of the administration on the time that an organization that already had a close to 100-year historical past at that second, you recognize, if it was going to be round for an additional 100 years, wanted to suppose extra broadly—interested by the way it creates worth and interested by methods to create worth for society by interested by the setting and interested by communities, in addition to interested by shareholders. Then we take it ahead to, I’d say, 2019, when the then-CEO Mark Schneider signed up for the UN Global Compact and the UN settlement on, Can we get to internet zero by 2050? So, we grew to become a signatory of that. And that was a giant shift for the enterprise. And so, what it meant was we needed to publish a net-zero street map, which we did. And once you have a look at that street map, what you’ll see is that there’s a very sturdy emphasis on agricultural footprint—what we’re shopping for and the place we’re shopping for it from. So we’ve acquired to consider how we work with farmers, how we work with suppliers, with a view to drive cuts in our emissions base, as a result of that’s the one actual place we’re going to make an affect.
FEMI: What are you seeing proper now that you just suppose in 5 or ten years goes to pay dividends since you’ve already anticipated a brand new solution to be sustainable?
ROB: This is an space which I believe is an actual subject for a lot of, many companies. If you’re interested by, OK, so we’re drawing carbon out of the ambiance in forests. Well, that doesn’t begin once you plant a tree. In reality, what you’re doing is you’re investing into the long run. Now, this isn’t like opening a brand new manufacturing facility the place on Day One, growth, the lights are on, you’re making issues, away you go, you’ve acquired manufacturing traces buzzing. No, within the case of agriculture and the pure world, you’re fairly often doing issues at the moment that’ll truly ship a payback in future. We spend a ton of cash on regenerative agriculture or on forests. It’s truly fairly arduous to capitalize them. I typically suppose it could make life rather a lot simpler if we might.
FEMI: You simply dropped that phrase regenerative agriculture into your dialog. Almost anyone who makes use of that phrase has a very completely different description. What’s yours?
ROB: We are on the cusp of the most important transition in agriculture because the invention of the Haber-Bosch course of within the early 1900s. That’s the method by which we had been capable of create artificial fertilizers. That’s what led to the large uplift in productiveness in agriculture, however with enormous adverse penalties as properly by way of fossil gasoline impacts. So that’s what we now name typical agriculture. I’d argue regenerative agriculture is definitely a sequence of practices which might be designed to ship the crops that you just want, and on the similar time enhance the setting during which they’re rising. So, we’ve got one thing like 16 separate practices that we might say are steps in the direction of regenerative agriculture. One of these is perhaps, as an example, leaving a margin across the subject for wildlife, you recognize, biodiversity to flourish in a strip of land across the subject. Terrific thought. Does that make the sphere within the center regenerative? No, it doesn’t. It’s a regenerative observe that, mixed with different practices, might get to a degree the place that farm may very well be thought of really regenerative. But I believe we’ve got to be a bit considerate about that. But the practices themselves, they’re usually widespread sense. I imply, they’re issues that I grew up studying about after I was in school many, a few years in the past. Crop rotation, for instance, decreasing the quantity of artificial fertilizers, utilizing natural fertilizers, planting bushes, you recognize, and so forth and so forth. There are a complete sequence of practices that we’ve mapped out, and we’re working with farmers to assist them to place these practices into play on their farms.
FEMI: You’ve mapped out these practices already, however how lengthy will it take for farmers that you just work with to take them up?
ROB: When we launched the net-zero street map, we made very clear that we had been ready to place some cash behind this. So 3.2 billion Swiss francs whole within the interval 2020 to 2025 on the entire of the street map, of which 1.2 billion was earmarked for kickstarting regenerative practices. Now, lots of people would assume that Nestlé is a distant firm that buys on the worldwide commodity markets and has no direct relationships with farmers. It is true that we purchase lots of commodities on world commodities markets, but it surely’s additionally true that we’ve got direct buying and selling relationships with one thing within the area of 600,000 farmers. Many of them are espresso farmers, many cocoa farmers, notably dairy farmers. So that provides us an incredible alternative to work with farmers, to encourage them. And how will we do this? Well, technical help. We have one thing like 2,000 agronomists that may get on the market on the farm and work with farmers to assist them to place these practices into operation. We pay premiums when a product is produced utilizing these regenerative practices. There’s finance obtainable, insurance coverage, and mortgage schemes, and so forth. So, there’s a complete vary of interventions. But one factor is obvious: on the heart of all of it, you must put the farmer. Because in the event you simply flip up on the farm gate and inform the farmer, This is what we wish you to do, otherwise you’re not going to get to do enterprise with us, that’s not what farmers wish to hear.
It’s a giant step. It’s a giant step. I imply, Femi, if I mentioned to you, what I would like you to do is to alter the best way that you just’re working. I’m going to chop your wage by 30%, however I assure you, by altering the best way you’re working, your revenue will enhance in two years’ time or three years’ time. You know, that’s a little bit of a giant wager you’re being requested to make. I’m undecided many people which might be salaried, we’d wish to take that on. But in a way, that’s what we’re asking farmers to do.
FEMI: I’m simply interested by the IPCC, the Intergovernmental Panel on Climate Change. Two years in the past, 2022, they reported that the worldwide meals system accounts for 42% of worldwide greenhouse gasoline emissions. What does Nestlé do about that?
ROB: It’s completely incumbent upon the entire of the agricultural system to begin taking a look at, OK, how are we going to cut back our impacts? We’re not going to get to internet zero with out vital cuts in agricultural emissions. We need to cease utilizing fossil gasoline fertilizers, or at the very least radically cut back using fossil gasoline fertilizers. We want to consider emissions from dairy. That’s an enormous subject. We’ve acquired to consider how we repair extra carbon in soils, how we plant extra bushes, combine extra bushes into our farm system, in order that we’re utilizing farming to attract CO2 down out of the ambiance and repair it within the floor. All of the steps that we’re proposing, have you learnt what the actual magic sauce of that is? It truly will increase farmer resilience. The very steps you wish to take to mitigate your impacts are the identical steps which might be going to extend your resilience within the face of elevated drought, warmth, floods, and hurricanes and storms, et cetera. You have a extra resilient farm once you’ve acquired a extra pure farm. And so for us, while I believe there’s an pressing duty on us, truly, there’s additionally a really, very, very sturdy case to our buyers that that is what we have to do to make sure a resilient provide chain sooner or later.
FEMI: Well, I really feel that you just’re fairly bullish concerning the state of our meals methods proper now. They’re strong, they’re resilient. From your perspective, what is going to they seem like in about ten years’ time? What is that transformation course of?
ROB: So firstly to say, I don’t need you to return away from this that I’m one way or the other bullish about meals methods. I do suppose that meals methods will see this by. But I do suppose there’s an enormous quantity of labor forward of us to make our meals methods, that they’re making a optimistic affect on the setting and delivering protected, nutritious, and scrumptious meals for customers. So there’s rather a lot to do. No query, proper? Now, some forecasters have been notably optimistic about, for instance, precision fermentation, and that that is going to fully disrupt meals methods. Technology, superior applied sciences will certainly come to bear on the meals methods that we’ve got. These applied sciences, that are struggling in the meanwhile to scale from lab to pilot after which pilot to mainstream, will discover their manner by, finally. It’ll take a bit bit longer, I believe, than some are saying. But that’s one of many modifications. I believe superior applied sciences shall be a big affect on meals methods sooner or later.
FEMI: If you’re a enterprise that’s not concerned in meals and are wanting on the instance of Nestlé and comparable corporations, what are the teachings that may be discovered?
ROB: I believe one of many issues I’d level to is—and it goes again to this factor of making shared worth, and—I believe, people-centricity. Having simply mentioned, yeah, expertise goes to make an affect, and it’ll. But I don’t suppose we get anyplace with expertise. We don’t get anyplace with regenerative agriculture. We don’t get anyplace with slicing CO2 emissions, et cetera, et cetera, except we’re people-centric. What about customers? What about farmers? What about staff? What about folks in our worth chain? Thinking about how individuals are going to make the distinction. Because on the finish of the day, that’s what it’s. It’s those who make the distinction. So I believe that form of communities-first pondering, I believe, is extremely essential.
FEMI: Rob Cameron, thanks for becoming a member of us.
ROB: Thanks for having me. Great to speak. Thanks, Femi.
LIZZIE: Stuti, Rob talked concerning the function of regenerative agriculture, however I wish to zoom out a bit bit. What sorts of conversations are you having proper now with purchasers round meals methods? Risks? Opportunities? What is on their radar proper now?
STUTI: I truly suppose purchasers are taking a look at this from a number of completely different views now. There is that this form of fast query that comes up as a result of there’s lots of regulation coming their manner, notably in Europe. So, it’s, lots of it’s across the reporting and the way do they handle a few of that. But what I additionally see, notably interested by issues like regenerative agriculture, is that corporations have actually massive sustainability targets. And in relation to meals methods gamers, usually, the most important supply of emissions is the meals system and their crops and their farms. The different facet of that’s actually understanding the chance to the provision chain. This is about local weather modeling and attending to know which crops are literally going to be in danger sooner or later. Also, this 12 months, we’ve seen the volatility in espresso costs. You’ve seen olive oil getting actually costly, and these items have actually made corporations go, Hey, I must do one thing and take into consideration this. Another key factor is that as a result of one thing like espresso has actually been, the best way that I see it, the canary within the coalmine, corporations begin to see, Hey, that is the form of crop that takes eight years to fruit. So if I would like to take a look at my very own worth chain, the place are the most important dangers? Another crop that form of makes you suppose in that manner is hops. Hops solely develop inside a sure longitude and latitude. So in order for you beer sooner or later, you might want to make it possible for it’s going to be local weather resilient. So that’s a very massive space. Another factor that I see is lots of corporations are taking a look at, can they supply a value-added service in serving to farmers transfer in the direction of extra sustainable, regenerative agricultural practices?
FEMI: If we’re specializing in the way forward for meals and methods to make our meals methods extra strong, what are technological options that you’re seeing which might be impressing you? I’m pondering AI, clearly. What else is there?
STUTI: When it involves the meals system, we’ve got lots of options already. And I’m going to begin first with mechanization. So, 45% of Indian agriculture is mechanized at the moment. And in the event you examine that to Western Europe, we’re speaking about 70%. So, there’s nonetheless a giant function for less complicated options like tractors. And then again, if I believe extra concerning the issues that you just’re pondering of, so, actual new applied sciences like AI, we’re speaking about, you recognize, on the farm degree, it’s using information about soil, about crops, about climate, and possibly probably serving to farmers make higher choices in that house. It’s among the buzzwords that you just may hear, like vertical farming, precision agriculture, even little robots that may plant seeds into the bottom. But the large subject right here is that lots of these applied sciences are usually not but at scale, and there’s lots of funding required to get them to the best price degree. I believe, possibly, probably the most fascinating one for me proper now, which is admittedly tangible, might be using AI in actually decreasing meals waste. Thirty p.c of the meals that we produce by no means will get consumed. So, if we are able to use expertise to do issues like dynamic pricing on the retailers so that individuals purchase it earlier than it goes to waste, or you’ll be able to have a look at how one can preserve the best situations in transport, these sorts of issues, I believe, get me possibly probably the most excited, since you see it actually tangibly and rapidly.
FEMI: One of the roles that you just do is planning technique. If you had been to speak to policymakers and enterprise leaders about constructing a greater meals system, what would you inform them?
STUTI: I believe what must occur is much more determining these options collectively and discovering new methods of funding the modifications we’d like. When it involves farming, for instance, lots of it’s sponsored, proper? And there’s lots of agricultural coverage that exists across the globe as a result of farmers are a very essential a part of every nation’s panorama. I believe there’s a massive function for presidency there. You know, they’ll make these choices round what to incentivize, what to subsidize, what to penalize. And you see that there’s already some experimentation with this, proper? There are sugar taxes in Brazil. Denmark goes to check out a carbon tax on dairy and on beef in 2030. And I ponder how a few of these issues are going to play out. I see that there’s a very sturdy piece there that governments can management. And it’s that blend, proper? It’s that actual stability of how do you make it possible for farmers can even have an excellent and profitable livelihood? And on the similar time, how will we begin this shift to a greater meals system? The massive downside with lots of these items is, Hey, if I’m the primary mover, I’m taking up a price and I may not see the outcomes of that funding for fairly a while or someone else takes the profit. So creating that degree taking part in subject and making it simpler to additionally take these sustainable steps is a giant a part of it as properly.
LIZZIE: Building on {that a} bit, once you’re speaking about being the primary mover, steps that don’t repay instantly, among the practices that Rob talked about have an extended time horizon, and I ponder how a enterprise chief can take these steps and convey their shareholders, a really key constituency, together with them when possibly there isn’t a right away payoff to indicate rapidly.
STUTI: In the tip, you might want to have the imaginative and prescient and you might want to create that imaginative and prescient in your shareholders on why you might want to do that and what are among the massive points that you just’re going to face. When it involves the meals system, I believe there’s now fairly clear proof that we have to make these modifications. And you should utilize resilience as a key level on this. And possibly, step one is even simply beginning with the tutorial facet, proper? On ensuring that you just perceive what your local weather threat publicity is and what the publicity is upstream in order that your shareholders begin to perceive that threat as properly. And you’ll be able to present, Hey, these are the actions we have to take. The timeframe and the payoff, truthfully, it’s going to essentially depend upon every particular person firm. So how they make these choices is admittedly tied up with the place they see these alternatives. But I do wish to say right here, I imply, take into consideration the vitality transition and the best way that it panned out in electrical automobiles, proper? We knew about this expertise for a really very long time. The present corporations didn’t take motion. It took a brand new participant like Tesla to return in, and so they have made a mint off of it, proper? So these alternatives are there, and we have to see who figures it out.
FEMI: As we take into consideration securing the way forward for meals, it’s a dialog that we’re all concerned in. Nobody opts out as a result of it’s not our enterprise. Because all of us need to eat and all of us use the meals methods. But in the event you’re a non-food enterprise, how must you be interested by the way forward for our meals methods? What’s related?
STUTI: I believe there’s rather a lot, truly. So we’ve actually spoken, I suppose, extra concerning the core meals corporations, proper? But supporting this complete system, you’ve banks, you’ve insurance coverage corporations, you’ve acquired manufacturing corporations which might be offering these tractors we spoke about someplace earlier. Yeah. So there are literally lots of completely different gamers round this complete house. On the buyer facet, there’s additionally healthcare, in fact, as a result of what you eat has an impact on what your well being appears to be like like. There’s the infrastructure facet of this, as a result of in relation to meals methods, Hey, in case your meals will get caught in a port, you’ve acquired lots of waste occurring. So I believe there are lots of completely different roles to play right here. And the extra that corporations can truly discover these new methods of working collectively, I believe, the extra possible we’re to get this transition and this alteration to essentially happen.
LIZZIE: Stuti, when you’re interested by the way forward for meals and meals methods, what are you most excited by?
STUTI: I believe it’s the concept of us rethinking this method and redesigning what’s now fairly difficult, truly. So I believe sooner or later, I began wanting into the journey of a typical tomato, and also you notice that these items are going forwards and backwards throughout the globe to get to the place they’re. So if we might do it from scratch, how would we set it up in order that the entire system can profit from the best way that we produce our meals and do it in a manner that works with nature? That’s what will get me excited.
LIZZIE: Stuti, thanks a lot for speaking with us at the moment.
STUTI: Thanks for the dialog. It was lots of enjoyable.
FEMI: I acquired such a transparent thought of futurism from listening to Rob and chatting to Stuti, as a result of I believe we regularly take into consideration expertise, our future in expertise, and so they had been interested by one thing so primary that all of us need to do, which is eat and our meals methods, however projecting how we have to be interested by them. And there was that second the place Stuti talked about, if we don’t make hops local weather resilient, the place’s the beer going to return from?
LIZZIE: Where’s the beer? I wasn’t simply the one individual that perked up at that. I used to be like, Oh!
FEMI: Maybe that’s how we needs to be speaking about the way forward for our meals methods, as a result of that may actually hit house about how essential our meals methods are.
LIZZIE: I believe there have been two particular issues that caught with me. This was an episode with lots of actually intriguing specifics: Rob speaking about how few edible vegetation we truly domesticate and eat was actually fascinating to me.
FEMI: Shocking!
LIZZIE: Truly surprising. And then the concept Stuti put ahead that you may use AI to do one thing like cut back meals waste by injecting dynamic pricing, proper? At the tip of the day, come get your tomatoes, corn, what have you ever, and it’s low cost as a result of we don’t need it to go to waste. That’s sensible. That’s so easy.
FEMI: Well, that brings us to the tip of this episode. For extra prefer it, faucet, comply with, or subscribe in your podcast app. You’ll get each episode as quickly because it’s launched. And if Take on Tomorrow helped you concentrate on what you are promoting in a brand new manner, please go away us a overview—that may assist others to seek out the present.
LIZZIE: Next time on Take on Tomorrow, is it time to fully reinvent what you are promoting?
GUEST: Nobody can predict what’s going to occur within the subsequent decade, however I believe the one factor that we are able to all agree on is doing what you’ve executed for the previous ten years will not be going to work.
LIZZIE: Take on Tomorrow is delivered to you by PwC’s technique and enterprise. PwC refers back to the PwC community and/or a number of of its member corporations, every of which is a separate authorized entity.
