Changing patterns in food supply must be addressed

AbacusBio managing director Anna Campbell is passionate about the agribusiness sector and Dunedin...
AbacusBio managing director Anna Campbell. PHOTO: GREGOR RICHARDSON
I have been reading and listening to reports and podcasts on the impact of Covid-19 on food supply and buying patterns.

It is interesting to note that most of these trends were identified as trends before Covid-19, but the pandemic has massively shifted the dial in terms of the pace of change. We are likely to see many of these shifts sustained in the Covid-19 recovery and beyond.

1. In the United States, Covid-19 has increased the dominance of the large food players such as Walmart and Amazon (which owns Whole Foods). Small grocery chains and independents, before Covid-19, made up 40% of the grocery sector — this is rapidly shrinking. Workers within the large chains are negotiating higher pay and, in general, profit margins on grocery products are decreasing. This will make it harder for small players to compete, especially without the benefits of robotics and artificial intelligence systems.

2. There has been a massive shift in consumer buying behaviour from bricks and mortar to online. Before Covid-19 in the US, less than 4% of groceries were bought online. In the first two weeks of March, one-third of US consumers bought food online, 47% claiming it was the first time that they had done so. I imagine we would see similar statistics in New Zealand. The biggest casualty in all this is the hospitality sector. In New Zealand, local cafes opening in the next few weeks will tread water at best. If we want to keep our local food entrepreneurs afloat, we need to support them for a lot longer than a few weeks.

3. There is a rally call to buy local and we will where we can — but is that possible for all of us and for all of our food? An interesting analysis was published two weeks ago in Nature Food (Kinnunen et al) where they examined staple crops from around the world (wheat, barley, rye, rice, corn, millet, sorghum, cassava and pulses). They showed that 27% of the world’s population could get their temperate cereal grains within a radius of fewer than 100km. The share was 22% for tropical cereals, 28% for rice and 27% for pulses. In the case of maize and tropical roots, the proportion was only 11-16%.

In this context, for most people in the world, living solely on “buying local” is not possible. We have seen this played out in New Zealand in staple wheat production. According to the FAO, global wheat production is expected to reach record levels in 2020. New Zealand, too, has had a good growing year and is coping well with the 500% increase in wheat demand by New Zealanders. Yet with much of our prime cropping land replaced by dairy production in the past two decades, we produce enough wheat only for the South Island. Much of the wheat consumed in the North Island is imported from Australia and unless transport costs from south to north are significantly reduced, this is unlikely to change.

On the global scene, there are reports that the UK (and other countries) are holding back grain to keep for their own supply, helping to push grain prices to season highs. “Buying local” for our full food basket is incredibly complex and costly and there are some serious economic and social considerations which need to be assessed for most products.

4. What we are buying is shifting — we are going back to the basics, desiring products such as wheat, and as we move back into our own kitchens, we have moved back to what we were brought up with in terms of cultural cooking, flavours and ingredients. On top of that, we want to do what we can to be in optimal health, should we contract Covid-19. The relationship of food and health is on the rise as sales of functional foods and nutraceuticals soar — in the words of Ian Proudfood, KPMG’s global head of agribusiness, “consumers are seeking lifestyle solutions to build immunity and minimise risk of contagion’’ and we should expect “functional and nutraceutical to go stratospheric’’.

I have said for a long time that New Zealand food companies need to be innovating in this area — I believe this so strongly I think I will still be ranting in my grave. Let Covid-19 be the innovation catalyst for some big moves in this space from New Zealand food companies and researchers.

5. Finally, governments will look to greater protectionism of their own food supplies and we expect to see significant shifts in food trade volumes and patterns. There are examples of food supply disruption in nearly every traded food type. Using beef as an example, the China export market is opening up for New Zealand beef, not just because China is starting its Covid-19 recovery, but also because Brazil’s beef export port in Santos is an “absolute disaster” and the Argentinian Government has banned beef exports in response to local food security concerns.

Geopolitics will play a role in food supply. Relationships between the heavyweights, the United States and China, are deteriorating. As the US calls for a WHO review of China’s response to Covid-19 and Australia and others join the charge, I wonder what this will mean for the politics of food trade.

As a country, we need to talk about local food, food security and what our place is in a global food system. Our country’s leadership during the pandemic has been recognised internationally. We have an opportunity to extend the conversation from how we are dealing with Covid-19 to what we see as a better model for food supply in the world. Let’s not be afraid to step up.

■Anna Campbell is managing director of AbacusBio Ltd, a Dunedin-based agri-technology company.

 

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