FOOD SAFETY AND WASTE MANAGEMENT

FINANCIAL MARKET ANALYSIS

According to the World Health Organisation (WHO), unsafe food causes 600 million cases of foodborne illnesses worldwide and 420,000 deaths. Of these cases, food poisoning is one of the main causes, followed by allergies. Technology is helping the food industry to reduce health hazards and also to facilitate waste management.

What tools are used to manage food security?

Food safety is a major concern for most consumers. Common measures to limit the risk of food poisoning include quality control, staff training, the manufacturing process, monitoring of recalls of unsafe products, the use of food additives and allergen labelling (see Fig. 2).

Tests are used to detect contaminants and pesticides, product composition and purity, accuracy of product labels, compliance with regulations, etc. Food safety testing companies play a vital role in the global market to protect consumers and give them confidence in the products they buy. The global food safety testing market will reach nearly $30 billion by 2027, and is growing at a CAGR of 7.6%. Agilent, Bureau Veritas, Eurofins Scientific, Intertek, SGS and Thermo Fisher are among the major companies active in this sector. They provide testing, inspection and certification solutions.

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Cold chain compliance in the food manufacturing process, transportation and preservation must also be monitored to ensure consumer safety. The global food cold chain market is expected to grow at a CAGR of 8.8% between 2020 and 2025. Fresh or perishable food and the resulting losses are a growing concern, from the procurement of raw materials to the presentation of finished products on retail shelves. Significant changes in ambient temperature as a result of climate change are having an alarming effect on the cold chain infrastructure, resulting in a growing need for resilient solutions.

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The demand for frozen foods and products requiring special handling and temperature tolerances has grown by leaps and bounds. Globally, the demand for perishable foods is expected to continue to grow due to increasing urbanisation and the growing middle class in emerging countries.

According to the Global Cold Chain Alliance (GCCA), global cold storage capacity reached 719 million cubic meters in 2020. Much of the development has taken place in emerging markets. In China, cold storage capacity increased by 38% between 2008 and 2018 and is still growing at double-digit rates (see Fig. 3).

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Traceability reassures producers, distributors and customers alike

Food traceability is a relatively new concept in the field of food safety. According to the International Organization for Standardization (ISO), traceability is the "ability to trace the movement of a food through one or more specific stages of production, processing and distribution". The principles governing the design and implementation of a food traceability system are developed in ISO 22005:2007.

On 15 November 2022, the Food and Drug Administration (FDA) issued a food traceability rule to facilitate the identification and rapid removal of potentially contaminated food from the market, in order to reduce the number of foodborne illnesses or deaths. The new rule is part of the US Food Safety Modernisation Act (FSMA).

Traceability helps to reduce food fraud, adulteration and mislabeling. It also allows businesses to be flexible enough to respond effectively to disease outbreaks and other environmental emergencies. But the importance of food traceability is not limited to public safety. For a food company, investing in traceability can improve risk management and limit the exorbitant costs of recalls (see Fig. 4).

IBM Food Trust has developed software for the food industry to help eliminate supply chain inefficiencies, prevent food waste, improve food safety, enhance brand image and drive growth.

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Walmart is asking all its green leaf suppliers to join the IBM Food Trust network, not only to reduce the cost of potential recalls, but also to prevent illness. Real-time visibility of the supply chain would ensure that products reach the shelves as soon as possible, maximising shelf life and reducing waste. It would also allow them to identify inefficiencies and support sustainable agriculture.

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Artificial intelligence says it is ready to tackle supply chain challenges

Food and beverage companies are looking to streamline their supply chain, automate processes and increase visibility. Artificial intelligence (AI) can help them do this by solving many problems such as high container storage costs and route optimisation. Indeed, AI can speed up data analysis, provide end-to-end visibility and help streamline processes throughout the supply chain by processing large amounts of information from different sources. With better visibility into food expiration dates, temperature requirements, vehicle capacity, port congestion and real-time vessel locations, shippers and manufacturers will have more information to improve decision making and reduce disruption. Strategic asset planning and route optimisation using AI will help the food industry meet ever-increasing orders. Artificial intelligence (AI) has the potential to revolutionise all functions of supply chain management by enabling organisations to optimise processes, reduce costs and increase efficiency (see Fig. 5).

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The future is bright with the imminent breakthrough and commercialisation of exciting advances in autonomous trucks, the internet of things (IoT), drone order fulfillment and blockchain.

IoT and blockchain will soon help to track products through the supply chain and create a digital product history. This will be available not only to shops and the food team, but also to the consumer. This will increase customer confidence in accessing product data in a form that they understand.

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Waste management is an integral part of the product life cycle

Parisians will agree that waste management is essential.

According to the Food and Agriculture Organization of the United Nations, nearly 1.6 billion tons of food are wasted worldwide each year. In the United States, 30-40% of food ends up in the garbage. Food waste occurs at different levels, namely agriculture, processing, transport, retail, cooking and consumption (see Graph of the week).

When this food waste arrives in landfills, the massive layers of organic waste decompose and produce greenhouse gases such as methane, which is 21 times more potent than carbon dioxide. The sector is therefore increasingly looking at ways to value food waste by turning it into sustainable fuels such as biogas, organic fertiliser or animal feed (see Fig. 6).

Some of the major players in the global food waste management market include Veolia, Waste Management, Republic Services, Waste Connection, Clean Harbors and DS Smith. The business is expected to grow at 5.7% per annum by 2033 and is currently worth around $70 billion.

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Conclusion

Innovations and technological advances in the food industry are rapidly changing the field of food safety and its associated waste management. Food safety regulations can reduce loss and waste through measures that prevent spoilage or contamination, or by promoting technologies that extend shelf life. The stakes are high and supported by governments, NGOs and private companies.

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RETURN ON FINANCIAL ASSETS

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