Our industry tries to make headlines with sustainability, but in reality are we really considering the issue seriously enough?
First of all let’s consider what we actually mean by “sustainability”, I suspect for some it means “how do we make even bigger more efficient manufacturing units”, for some it’s “how do we grab a few green headlines” and for some its just “how do we continue increasing market share”
Let’s turn the argument around and consider sustainability in the context of having a broad, viable confectionery industry in, at minimum, ten years time. To do that we have to think about a number of change issues:-
- What will the “next generation” consumer be looking for
- What changes will have taken place in ingredient supply
- What changes will regulatory bodies and consumers (rightly or wrongly) be trying to force on us
- In what direction should we therefore be leading the industry
The Consumer
Assuming current trends continue our “next generation” consumers are going to be:-
- Much less affected by “conventional” advertising and almost entirely influenced by social media and opinions expressed by social media champions, whether well informed or otherwise.
- Excited by innovation, novelty and improvements in “performance”. Every other aspect of their life is going to be one of almost constant change and adaptation
- Buying choices are going to be strongly influenced by environmental concerns (real and imagined) on the one hand and mistrust of “big industry” on the other.
- Looking to new, more convenient, commercial models which fit their lifestyle and aspirations rather than commercial channels which seek to impose their model on the consumer. Speed, convenience and service levels are going to be critical.
- Demanding that they are provided with healthier lifestyle choices both in terms of their own diet and that of the ingredients used in food manufacture
Anyone who doubts any of this might care to look at the fate of the department store chains, conventional “high streets” and even shopping centres where a refusal to understand and adapt to what the consumer demands is fuelling the virtual demise of conventional model retail.
Ingredients
As an industry we are locked in to historic attitudes to ingredients in a way which cannot continue. Even if we try to ignore change, environmental and social changes are going to make current models very difficult if not impossible to maintain. We need to have a very hard look at the resource, environmental and social issues of every one of our ingredients and to plan ahead for change.
The industry is critically dependant on raw materials which are extremely vulnerable to resource availability and climate change, particularly cocoa, nuts and (dried) fruit.
Although both sugar and milk have significant environmental impacts the confectionery industry usage of these products relative to their global production is relatively small. The same can be said of glucose (ie starch derived) syrups, all be it to a lesser degree. It is also unlikely that these particular products are going to be replaced in the broader confectionery industry to any major degree.
Alternatives to sugar currently have significant issues in terms of consumability and cost and whilst this sector may grow it will continue to be relatively small unless there are seismic shifts in consumption patterns.
Chocolates which contain (mainly dairy) milk account for about 70% of global sales so the demand for dairy milk solids is likely to remain although the dark chocolate market sector is likely to increase, which in itself has other implications. This is heavily skewed by age and location, with the younger age group (<45) consuming almost 90% milk chocolate in the huge American market.
Dairy milk is an important flavour component of milk chocolate and although there are niche markets for products based on non dairy milks these will remain small due to product characteristics, cost and failure to really supply a preferred differential. Large scale replacement of dairy milk with, for example almond or other nut milks, has significant environmental impact.
Methane “production” by dairy cattle is of course a concern and is the focus of research programmes. However it is likely that the mainstream dairy industry will address this as long as the cost is not too high. Dairy milk production is not highly profitable in most major producer areas, so a significant “on cost” due to feed changes is unlikely to be welcomed by the producers – or probably the consumer who likes to think (not unreasonably) of cows in fields of grass rather than being fed industrially produced foods.
Cocoa
Cocoa has a number of issues which have serious potential long term impact. It is a “fussy” crop, requiring precise growing conditions and large amounts of water and fertiliser. In addition it requires significant amounts of labour for harvesting and primary processing.
Climate change in the medium to long term is going to have a significant effect on the locations which can grow cocoa effectively and may well reduce the areas suitable for cocoa growing very significantly. Transfer to locations which may become suitable will be less than easy with land, water and labour availability all potential issues
- About 85% of cocoa bean requirement for chocolate is purely to provide fat, yet the cocoa tree is an inefficient fat source, requiring many times the amount of land, water and agricultural labour to create a tonne of fat than more specialist crops such as palm. Technically it is currently possible to produce fats of identical properties from other sources and if the regulators, the industry (and the consumer) could be drawn away from its preoccupation with cocoa butter a much more ecologically defendable and long term sustainable situation could be achieved.
- Cocoa has unique properties as a flavouring agent which is its key role in chocolate and cocoa products and a shift in emphasis from tonnage to quality to provide primarily flavour would certainly reduce the long term sensitivity of the industry to climate and environmental issues.
Nuts
Whilst nuts have many of the same issues as cocoa in terms of climate change making current growing areas less suitable, they have another very important issue which is water usage, as they tend to be grown in relatively “dry” areas but require water irrigation on a huge scale.
Fruit
Regulatory and Consumer Pressure
Our products are generally high in energy content per gram and in any cases this is where part of their attraction lies. Products are designed to be indulgent, satisfying and pleasing to the purchaser, consumer or recipient.
Another issue is the basic business model of the major industry players which may be summed up as “tonnage”. The competitive pressure on pricing plus the outfall from consolidation (generally justified on the basis of cost reduction) has lead to:-
- Very little true product innovation
- A move towards ever larger centralised manufacturing units
- Pressure to reduce ingredient cost
Larger packs, multipacks etc. come from this. When pressure is exerted to reduce energy content this has been reacted to by reducing unit size … but then packing two units in a single wrap so often increasing the energy content of the pack whilst obtaining a headline reduction in reduced unit size.
The real answer to this (justified) pressure to reduce energy content must be “product intensification” where a much smaller unit size delivers the same level of (or even greater) satisfaction. This has been achieved by both artisan and some premium producers, manufacturing products with a higher flavour level, better environmental credentials but a significantly lower “energy per eating experience”.
Results to date as to the acceptability of the approach of adding fibre and increasing cost per gram seem at best to be mixed. In spite of attempting to retain the same identity, many current products are less satisfactory and the consumer is reacting appropriately