The stability and security of the world’s food supply can no longer be taken for granted. Multiple drivers are increasing demand at the same time as supply is being challenged. There is a clear need for change to ensure we all have access to healthy, sustainable and reliable food sources.
But in this instance, the impact of technology may not be enough. We also need to rethink how the traditional food system is managed to ensure it becomes more adaptable, resilient and sustainable.
Demand and supply challenges
Food security is one of the world’s most critical challenges. Several factors have converged to highlight the fragility of the food and agriculture supply chain.
Firstly, demand is increasing. The global population is expected to hit 10 billion people by 20501 and this will create a 56% food gap between the amount of crop calories that were produced in 2010 and the anticipated demand in 20502. However, pressures on food supply are not just about an increasing number of mouths to feed: a rise in living standards and a shift from rural to urbanised populations have led to an increase in the consumption of resource-intensive, animal-based foods.
Secondly, food security also faces supply challenges. This decade, global supply chains have been disrupted by the pandemic, the war in Ukraine and extreme weather. According to the World Bank Food Security Update for December 2023, the prevalence of severe food global insecurity peaked at 11.9% globally in 2020-2022 and has only seen a slight near-term improvement to 11.6% (2022-2023)3.
This represents an important issue because simply increasing the production of food through conventional methods won’t solve these issues. Access to arable land is decreasing, and yield growth has flattened. Food production needs to be delivered in a way that both lowers its environmental impact and remains within planetary boundaries. And rather than merely seeking to increase food quantity, there needs to be a greater focus on the provision of nutritious and healthy foods.
Finally, wasteful practices occur throughout all stages of the food supply chain – in production, processing, retail, and in storage and transport. The UN’s latest Food Waste Index Report 2024 notes that 19% of food available to consumers was lost, in addition to around 13% of food lost in the supply chain4. The scale of food waste greatly contributes to demand / supply imbalances and poses an ongoing hurdle in the food security challenge.
Climate change – a domino effect
Climate change is becoming one of the biggest threats to how we produce food. An increase in weather events combined with climatic changes means many agricultural regions are changing or shrinking, resulting in lower crop yields for farmers.
In 2023, impacts from both La Niña and El Niño, the warming and cooling of sea surface temperature in the equatorial Pacific, tightened the global supply of rice, keeping rice prices elevated throughout the year. Heavy rain in Europe last year led to one of the region’s lowest potato harvests on record, and a recent study suggested that global yields could potentially decline by 18% to 32% within the next 45 years5. Finally, extensive heat and dry conditions in the Mediterranean led to insufficient soil moisture adversely affecting olive trees, resulting in a 50% reduction in Spanish olive oil production and a corresponding jump in prices6.
The domino effect of climate change is having a far-reaching impact on global food security – limiting supplies, driving up food inflation and prompting the implementation of protectionist measures. Adaptive measures are paramount for securing a more resilient food supply.
Technology prompting small-scale change
There are many solutions along all parts of the food and agricultural value chain to address the issues associated with food security. In particular, innovation is providing some novel, disruptive technological options – such as vertical farming, precision fermentation and the development of artificial meat substitutes. For example, in 2020 Singapore became the first country in the world to authorise the sale of lab-grown meat. As a small nation, Singapore imports about 90% of its food therefore investment in agritech is key to ensuring its food security.
However, while the solutions are indeed promising on a small scale, they are a long way from meeting the wider challenge. Here, more simple measures are proving effective. Shortening supply chains and improvements in grain handling equipment and cold storage are having a significant logistical impact on limiting wastage in supply chains. Precision agriculture technology is facilitating more efficient resource management, improving soil conservation, lowering greenhouse gas emissions and enhancing crop productivity. The farming community is also starting to move away from the blanket application of fertilisers and pesticides and becoming more targeted, which can also be enabled by precision agriculture tools.
Sustainable farming practices
Innovation is also addressing how farming can be approached as a whole. Regenerative agriculture is centred around more sustainable ways of farming, that work to enhance biodiversity, improve regeneration and, importantly, develop climate change resilience.
There are various regenerative farming methods. Organic no-till or low-till farming, for example, minimises soil disturbance that contributes to CO2 emissions, contributing to a healthier soil microbiome and limiting the use of chemical fertilisers. Agroforestry involves planting more trees, which can cycle nutrients and bind the soil together to prevent erosion. Crops may then be grown beneath these trees, meaning the plants occupy different levels above and below ground, or livestock can graze beneath the trees to benefit from shelter and foliage, while their waste then improves the nutrients of the soil.
Regenerative agricultural practices can deliver long-term financial benefits for farmers, by improving the quantity and quality of crop yields, increasing climate resilience and also providing new green revenue streams, including rewards for carbon capture and storage in soil. Technologies such as smart irrigation – that uses satellite positioning – could aid regenerative agriculture, as could applications that promote the efficient use of water and the smarter use of fertilisers.
Investing for a more sustainable future
As a key contributor to carbon emissions, the food and agricultural system is both a cause and victim of current planetary changes. Food supply has been impacted in all regions of the world and throughout each stage of the supply chain, and the need for change is clear. Agricultural techniques that lead to ecosystem restoration present appealing opportunities for investors, particularly as some consumers are demanding a more sustainable journey, from farm to fork, for their food products.
Companies offering innovative solutions to the food security challenge are playing a material role in the transition to a more sustainable economy. Our SMaRT Food strategy targets companies across the sustainable food value chain that offer solutions to environmental and nutritional challenges, including the producers of health and natural foods, manufacturers of sustainable packaging and companies facilitating food waste reduction.
[1] UN Department of Economic and Social Affairs, 2017: World population projected to reach 9.8 billion in 2050, and 11.2 billion in 2100
[2] World Resources Institute, 2018: How to Sustainably Feed 10 Billion People by 2050, in 21 Charts
[3] https://blogs.worldbank.org/en/agfood/food-security-trends-2024-and-beyond
