In depth: Food & Beverage industry shift towards sustainability
A new report by the Intesa Sanpaolo Innovation Center examines the industry trends in Agriculture, Food & Beverage, with a focus on the impact of sustainability, safety and security issues from farm to fork. More broadly, it provides a guide as to how the Agriculture, Food & Beverage industry is responding to heightened attention on the way in which it manages the two interrelated issues of packaging and waste.
The Intesa Sanpaolo Innovation Center, an Intesa Sanpaolo Group company, explores the world of cutting-edge innovation, invests in applied research projects and high-potential startups, and works to accelerate the adoption of the circular economy.
The global packaged food and beverage market was valued at an estimated $3.6 trillion in 2021 – but Covid-19 hit the industry hard, forcing everyone in the supply chain to think again.
Consumers are increasingly looking for healthier, more sustainable products, while new standards such as the European Commission’s Farm to Fork strategy are calling for the industry to embrace the Circular Economy and redesign their food systems.
But as well as mitigating climate change, these trends present many opportunities for the food and beverage industry.
In 2018 Intesa Sanpaolo launched the Circular Economy Lab, designed to help entrepreneurs transform the old industrial system to a more circular model and tap into a market valued at $1 trillion globally. According to a report from Intesa Sanpaolo Innovation Centre, new technologies and innovations are swiftly emerging, particularly in three key areas: Packaging, Waste, and Safety and Security.
In 2019 the food packaging industry was valued at $115.9bn, and is developing at 1.2%. Rigid plastic remained the largest segment, with a 41% market share.
But now demand is growing for sustainable packaging – and 74% of consumers say they are willing to pay more for less plastic.
Single-use plastic packaging ends up in landfill or in our oceans. On top of that, its manufacturing is responsible for 1.5% of global greenhouse gas emissions, which is almost double the emissions of the aviation sector.
These environmental concerns, along with consumer demands, have prompted a search for alternatives.
One option is bioplastics, which are derived from plant or other biological material rather than petroleum, and therefore reduce the dependency on fossil resources. Most bio-based plastics in current use are non-biodegradable – although this is now changing, and the space is attracting attention from start-ups as well as big chemical companies.
Intesa Sanpaolo funds several businesses working towards a Circular Economy, such as IUV, which has created edible and biodegradable films with the aim of replacing plastic packaging and reducing food waste.
Moulded fibre and pulp packaging is biodegradable, compostable, and recyclable, making it a good ecological substitute for plastic. However, as it uses natural resources such as plant fibre and tree pulp, it can disrupt the management of forestry and crop plants.
To increase production, greater collaboration is needed between the agriculture, manufacturing and end-use industries to ensure long-term sustainability of natural resources.
As well as sustainability, digitisation is a major theme shaping the packaging market. The latest innovation is smart labels, which give shoppers a range of information about the product via their phone. This comes as a direct response to concerns about food security amid a sharp increase in online shopping. The food and beverage sector is leading the way, developing smart labels that offer the potential to build loyalty and optimise inventory.
Food waste is one of the biggest problems facing humanity. According to the UN Environment Programme, around a third of the food we produce is thrown out every year, equating to about 1.3 billion tonnes.
Manging waste is not only good for the environment but also good for business: in 2020, revenues from MSW’s organic recycling amounted to $58.7 billion, according to Frost & Sullivan.
Temperature-sensitive smart labels are one method of reducing food waste. Tech company Is It Fresh has used funding from Intesa Sanpaolo to develop printed “freshtags”, which provide sensors that measure the freshness of perishables, and enable the customer to trace the product back to the farm.
Unwanted food can be put to good use, however. Many companies are embracing the Circular Economy to harness food and farm waste. US firm Full Cycle Bioplastics is transforming food waste into bioplastics using natural bacteria, while Livestock Water Recycling in Canada uses market-leading technology to extract clean water and fertiliser nutrients from manure.
It’s not just food waste that’s having a global impact: waste dumped into landfills or oceans is a major contributor to greenhouse gas emissions, as well as soil and water pollution.
Each year, 2.12 billion tonnes of waste is generated globally – a figure that is expected to increase by 70% by 2050 unless we change. Shifting to a Circular Economy can help reduce the environmental impact of production and consumption by rethinking product design and recycling materials.
Food co-operative Fruttagel has done just that – with the help of Intesa Sanpaolo – by replacing its plastic straws with paper ones. “Intesa Sanpaolo helps us in three different ways,” says its CEO Stanislao Fabbrino. “Firstly, making a generous amount of money available to finance the Circular Economy project. Secondly, helping the CSR department of the company to communicate its story. Thirdly, creating an opportunity to build a network of companies along the entire supply chain by encouraging the creation of sustainability projects.”
Safety and security
Circular food systems can also help feed more people with less land – which will help achieve the target of increasing food production by 70% by 2050 and meeting the needs of 10 billion people.
Artificial intelligence (AI) is one way to improve efficiency and productivity – and it also offers the potential to help safety and security across the value chain.
While food safety and security took a back seat for consumers during the Covid-19 outbreak, it remains a priority. Research by the International Food Information Council (IFIC) found that the pandemic has impacted eating and preparation habits for 85% of consumers.
There is now a growing interest in “clean label” food: research by Intesa Sanpaolo Innovation Center reveals that consumer demand for ethical food was one of the top trends for the food and beverage industry in 2021.
The clean label concept is shaping another mega-trend in the industry: protein alternatives. Europe is the centre for the plant proteins market, which is projected to reach $15.6 billion worldwide by 2026.
Wider-scale adoption has been constrained by consumer concerns that some protein alternatives do not mimic meats, and they often use unknown or genetically modified ingredients.
However, advances are now being made to overcome these challenges, and companies such as HI-FOOD in Italy are using a wide range of different sources. The intersection between clean label food and alternative proteins represents a growing opportunity for the food and beverage industry.
A further consumer concern is bacteria. According to Frost & Sullivan, a focus of safety innovation is using DNA testing to detect pathogens and toxins, as well as checking freshness.
In addition to chemical methods, new “physical” food-inspection techniques, which offer a non-invasive alternative, are rapidly gaining ground. One example, developed with funding from Intesa Sanpaolo by a start-up called Xnext, is a new generation of X-ray inspection systems. The technology analyses the composition of a product on the production line and determines its compatibility with quality requirements.
Other emerging technologies include ultrasonic sensing, hyperspectral imaging, miniature spectrometers, and bio-speckle laser techniques, an optical method of analysing the quality of food.
Intesa Sanpaolo will continue to support and fund projects that are at the forefront of sustainability. Massimiano Tellini, Global Head Circular Economy, says that the shift to sustainability relies on sniffing out new opportunities. “In the transition to a sustainable approach, banks are expected to act like a watchdog. Here, we are trying to make a truffle dog – transforming the economic systems we live in.”
This article is based on the Intesa Sanpaolo Innovation Centre's industry trends report on Agriculture, Food & Beverage. All data is from the report unless otherwise indicated.
Download here the abstract of the report and watch the video:
Last updated 7 February 2022 at 17:34:49