DNV: Sustainability Tops the Agenda for Food & Drink Sector

Of all the global economy's industries, the food and beverage sector is one of the most vulnerable to externalities. The sector is attempting to shore up defences as the potential effects of climate change loom.

DNV, a leader in assurance and risk management, has done a great deal of research into the food and drink industry's pursuit of sustainability.

A DNV study reveals that sustainability has become the primary concern for the industry's leaders, overtaking cost-savings and compliance as top priority.

DNV's report, titled The Future of Sustainable Food Supply Chains: Spotlight on Europe’s Food and Beverage Industry, shines a light on the dynamic challenges and opportunities these businesses face today.

The power of technology and regulatory compliance

The alarming fact that a third of global carbon emissions come from food systems underscores the lag in technological adoption within the sector.

DNV underlines how pivotal digital evolution is for turning the tide. With enhancements in supply chain traceability and risk management platforms, transparency is achievable, though it requires reliable, widely shared data.

Michele Munaretti, a Supply Chain Manager at DNV, points out a viable solution: "By attaching connected sensors to goods and materials throughout the supply chain, the IoT can provide much-needed visibility into both sustainability and cost issues."

This move towards digital sophistication has become even more crucial as Europe tightens regulations.

Directives like the Corporate Sustainability Due Diligence Directive (CSDDD) and the Packaging Waste Directive demand more comprehensive approaches, from reducing emissions to addressing human rights, and compel businesses to integrate technology with compliance or risk falling behind.

Consumer influence and the role of retailers

Shifting consumer preferences are a massive force for change in the food and beverage space. Contemporary consumers prioritise sustainability and transparency, often favouring products that mirror their ethical and environmental values.

Retail giants, especially those managing private-label goods, are collaborating closely with suppliers to meet this consumer demand.

Nicola Somenzi, Head of Responsible Sourcing at Ferrero, says: "Once supply chain traceability and visibility are ensured, environmental and social KPIs can be measured.

"But it all starts from identifying and knowing the position of your farmers and their plot of land."

Tracking and managing expansive networks of farmers, as seen in Ferrero’s operations, has driven it towards innovative monitoring setups like satellite imagery to ensure its suppliers uphold sustainability benchmarks.

Barilla follows suit, utilising technology to aid farmers in minimising fertiliser and water use, thus advancing sustainable agricultural methods.

Leonardo Mirone, ESG leader at Barilla, acknowledges the occasional resistance from farmers but asserts the growing attractiveness of sustainable practices as prices for basics like fertiliser rise.

“As costs for raw materials like fertiliser increase, sustainable approaches become more attractive,” he says.

Sustainability through partnerships

Bolton Food provides a vivid example of active transformation.

Famous for its canned tuna, the company not only collaborates with NGOs like Greenpeace, WWF and Oxfam, but has also embraced a DIY ethos to corporate sustainability, purchasing its principal tuna supplier Tri Marine.

This bold move allows Bolton Food improved oversight over its sustainability practices down to remote areas like the Solomon Islands, aligning closely with its ethos.

Luciano Pirovano, Bolton's Chief Sustainability Officer, says: "We have a motto in Bolton Food, which is 'Partnership is our leadership.'"

'An era of significant transformation'

Despite some advancements, the industry’s path forward is laden with challenges. Nearly 70% of companies acknowledge digital transformation's importance, yet the actual adoption of powerful tools like IoT and blockchain trails behind other sectors.

These technologies offer immense potential to elevate operational efficiencies, enhance traceability and cut down on the ecological footprint.

Geir Fuglerud, CEO of Supply Chain & Product Assurance at DNV, says: "The food and beverage industry faces an era of significant transformation as sustainability within the entire supply chain becomes an urgent priority.

"This report is a blueprint for companies to address the challenges ahead, leveraging digital innovation to balance cost-efficiency and environmental responsibility."

To realise lasting change, the sector must commit to a blend of digital solutions, strict compliance with regulations and robust collaborations. The future of food supply chains will crucially depend on their capacity to innovate and adapt to these pressures.

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