A decade of major change to come in our food system

Our sector sits at the diner end of an enormous value chain, which provides over £250bn of food to UK consumers each year, of which around 38% is spent out-of-home.

Over 40% of that food is imported. Indeed, over recent decades trade in food has now become truly global. In 2021 around three-quarters of the food that humans consumed globally came from just 12 plant and five animal sources, with just three crops — wheat, rice and maize — accounting for 51% of the calories found within our global diet.

Since 1945, driven by population growth, farmers, manufacturers and distributors alike have focused on maximising efficiency and economies of scale. This has raised productivity in an extraordinary way, kept costs relatively low, and (literally) saved millions from starvation. So why on earth do we have a food system that is in a deeper state of crisis than I can remember at any time in my career?

The scientist and writer Ben Goldacre got pretty close with his catchphrase: “I think you’ll find it’s a bit more complicated than that.” While we were busy building efficiency, we were at the same time wreaking havoc with other fundamental human needs. These are now biting back, with the challenge reframed to fix these other human needs whilst retaining much of the efficiencies gained.

It’s my view that there are three themes emerging from this that will drive major changes in the food system over the next decade or two. They are (in summary):

Restoring nature

The food system has been causing deep damage to our environment. Overall, it contributes more than one-third of GHGs, mostly through deforestation, transportation and methane.

Our global focus on just 17 key nutrition sources is depleting biodiversity and raising the risk of disease/climate related supply catastrophes. Even without animal proteins there are over 300,000 plants that are fit for consumption, so it’s not like we lack choice. And our choice to replace natural soils with nitrogen fertilised earth (laced with pesticides) may deliver cheaper food, but it lacks nutrition and impacts nature in a highly negative way.

Since the pandemic there has been a rapid increase in demand for regenerative farming, with, for example, Compass committing that 70% of the top five food categories (dairy and cheese, fruit and vegetables, pork, beef and chicken) will be sourced from regenerative agriculture by 2030 and Honest Burgers switching to regenerative sources for all its burger patties.

This style of production seeks to regenerate land, soil and water, as well as enhance the wider environment and improve the nutrient density of food produced.

When measured on delivered price alone it costs more than similar products farmed intensively, but it enhances flavour, nutrition and of course nature. With less than 3% of UK production currently produced in this way it is early days but expect there to be a bow wave of demand for regeneratively farmed product in the years ahead.

This is but one of many changes we will see from within food production. We are already seeing measures to change the use of relatively unproductive agricultural land to more environmentally friendly use, such as re-planting trees and re-wilding. The agri-tech sector is now overflowing with new technologies aimed at more efficient and greener farming, including pioneering work in animal feeds and supplements aimed at reducing methane emissions naturally.

There are promising developments in the production of Biochar (a charcoal-like substance that’s made by burning organic material from agricultural and forestry wastes in a controlled process called pyrolysis) which contributes to the mitigation of climate change by enriching soils and reducing the need for chemical fertilisers. And, of course, vertical farming is at last beginning to happen at scale.

Our health

As Henry Dimbleby stressed in his recently published National Food Strategy, 80% of processed food sold in the UK is unhealthy. Because there is a bigger market for unhealthy food, companies invest more into developing and marketing it. This in turn expands the market further still. The bigger the market, the greater the economies of scale. Highly processed foods – high in salt, refined carbohydrates, sugar and fats, and low in fibre – are on average three times cheaper per calorie than healthier foods. This is one reason why bad diet is a particularly acute problem among the least affluent.

The UK is now the third-fattest country in the G7, with almost three in ten of our adult population obese. The way in which our diet is (literally) weighing on our national budget for the NHS will, in my view, eventually result in some deep and widespread changes including investment in education in food, and possibly more restrictions/taxation on fats and sugars for food producers throughout the value chain.

Geo-politics

For an extended period it seemed geo-politics would only play a limited influence on the availability and cost of our food and drink in the UK. But that ended with Brexit and latterly with the war in Ukraine. The full impact of Brexit has yet to be seen or properly evaluated, but analysis from the London School of Economics indicates that the increase in UK-EU trade barriers led to a 6% increase in food prices in the UK over the period between the end of 2019 and September 2021 in comparison to the years immediately before December 2019. As I write the planned abandonment of parts of the Northern Ireland Protocol threatens a UK-EU trade war, with protectionist consequences.

For much of the post-war period we struggled to produce enough calories to feed the world, but broadly speaking this is no longer the case. What we have now is increasing distribution problems, and geo-specific production challenges often generated by too much geo-concentration – the Ukraine and Russia grow most of the world’s sunflower seed and a significant proportion of global wheat for example.

So expect to see an increasing focus on UK food security from government, with a strong possibility that the cost of food goods will become less stable between UK grown and imported product. Increasing numbers of food businesses will be looking more critically at the cost and risk of imported product too. And food producing nations are definitely entering a new period when governments intercede on food export trade policy, retaining a proportion of production for home consumption, or even banning exports.

These three themes will dominate the food system in the years and decades ahead. These are very strong headwinds and it remains to be seen whether the system can adapt both well enough and fast enough. Of one thing we can be certain – we will be living through an the most exciting period of dynamic change in the way we produce food for generations, perhaps ever.