A report by Deloitte looks at vulnerabilities of the global food system that have been exposed by COVID-19. The A shock to the food system: Lessons learned from the COVID-19 report says the changes the pandemic has forced on the food system are “considerable” and have “significant implications for consumers, government and corporations alike”.
While changes include structural ones as well as accelerated important trends it is too early to say if they are here to stay. What is known is that the disruption has dramatically increased levels of uncertainty and scrambled forecasts and strategic plans.
The global food system is worth US$8 trillion, or approximately 10 per cent of global GDP. The complex network of supply and demand has been designed to deliver calories at high levels of efficiency.
While it has been successful – global malnourishment has fallen from 50 per cent of the world’s population in 1945 to 10 per cent in 2017 – COVID-19 has brought the tacit acknowledgment that the system needed reform to the fore.
“Perhaps it was inevitable that a significant shock like this would shine a light on a system that had for the longest time prized efficiency over resiliency, sustainability and health,” Deloitte said.
The report looks at four key areas: production; processing; distribution; and consumption, providing a scenario analysis of what the future may look like.
Deloitte said the following themes are expected to continue and accelerate:
- increased focus on the link between food and health;
- continued consumer expectation for digital engagement with food through e-commerce;
- continued fragility of small-scale producers and processors; and
- rising food insecurity in both developed and developing nations;
The report said addressing some of the systemic challenges of the food system will take time and a coordinated approach. Links between food and health, food loss and waste, and environmental and sustainability issues of food production have all been brought into focus.
Deloitte said while the seemingly evident link between food and health is not as obvious as it should be.
“In yet another bitter twist of food-health irony, the alleged origination of COVID-19 was linked to the consumption of food from lightly regulated food markets and spread due to the highly infectious nature of the virus,” it said.
Food loss and waste is not a new challenge to the food system but has garnered significant attention during the crisis. Data availability, transparency, supply chain visibility, sophisticated modelling, and improved coordination and knowledge transfer along the value chain are critical tools, but not all that is needed in dealing with the stubborn issue. Infrastructure, consumer behaviour and government all play a role.
The pandemic has also brought the environment and sustainability of how we produce food into focus. “Business models that reward more transparent, sustainable production in collaboration between farmers and other value chain players, would allow farmers to alter production in ways that are both commercially viable and economically sustainable,” Deloitte said.
“The crisis has already brought significant changes to what, where, and how we eat, and all the modes of production and distribution it takes to get food to us. Whether these changes remain with us for the next six months or six decades remains to be seen.”
The report said the pandemic has been a stress test for the system. While it did not break per-se, we should not neglect addressing the vulnerabilities it has exposed.
“Making it more resilient in its ability to address severe shocks like the one we are witnessing is critical, as is the ability to produce and make available more nutritious, equitable, and sustainable food for all.”
The full report can be accessed here.
