Farm to table: a new item on the menu

Our food system has a new paradigm. Consumers have raised their level of expectations and all want healthier food. This new consumer approach is leading to the simultaneous transformation of the entire food and agribusiness supply chains. Could it be that in this area, as in many others, Covid merely highlighted a nascent trend and accelerated the underlying ones? 

A revolution?

"Is it a revolt?" 

"No, Sire, it’s a revolution," said the Duc de La Rochefoucauld-Liancourt to Louis XVI, awakened by the popular uprising on the evening of July 14, 1789 in Versailles. 

The reality cannot be denied, the agribusiness industry has entered a phase of fundamental change driven by a desire for greater well-being. In the past 20 years the industry has shifted from import and export globalization, largely enabled by Common Agricultural Policy (CAP) subsidies, to suspicion about anything originating more than 150 kilometers away.

All levels of the food production and consumption chain have been affected. But which path to take? Fresh, organic and local are three equally pleasing concepts, but they are very different in reality. 

We have now reached a pivotal moment where we need to adapt our existing models, which has been made possible by a convergence of expectations. 

Change driven by increasingly “sustainable” views

In the past, farmers would proudly say “I put food on French tables,” or “I’m feeding the world” (without mentioning the massive CAP subsidies that made our wheat exports possible). In any event, environmental problems such as green algae blooms were considered secondary. 

CAP subsidies have diminished, as evidenced by the 35% overcapacity at wheat mills, and a less productivity-focused and more ethical vision has emerged. “The Earth is not a garbage can, it was lent to us by our children,” as the saying goes. This philosophy has been put into practice through tighter restrictions on phytotoxic herbicides and insecticides. 

Today we are seeing the corollary to the first saying, namely “My stomach is not a trash can, please only put good things in it.” This slogan summarizes in no uncertain terms the new reality that consumers, as a whole, are increasingly concerned. 

What factors accelerated this change?

The Covid pandemic led to widespread confinements, an increased reliance on remote work and restaurant closures over long periods. Confined to their homes, the French rediscovered their kitchen ranges and began cooking. They realized they could source their own foods and even enjoy doing it. These circumstances led to a growing awareness and a desire to eat better. The new lifestyles that have emerged since the spring of 2020 are giving rise to new consumer practices, which we now see becoming ingrained habits. 

What is driving this transformation?

Well … consumers themselves! According to the Kantar Covid-19 barometer, 52% of people surveyed are paying closer attention to where their food comes from. The pandemic whetted French appetites for healthier food. Previous food scandals started the process, now Covid is the final nail in the coffin. More well-being, better balance, living better. That is one response to this lengthy pandemic. And it starts with healthier food. Consumers want to regain control over what they eat. 

 What trends benefit from this societal change?

A closer look at food industry sales shows massive changes in consumer practices. At the same time, this growing awareness has led to greater complexity. 

Organic foods are still relevant, but the stringent and admittedly complicated standards may need to be harmonized and streamlined for organic foods to continue to grow. Aside from a relatively small fringe of wealthy consumers, most consumers are no longer as willing to pay a premium for labels they no longer understand very well. When you reach the point where even a random garden slug that ingested a pesticide two years earlier cannot come into contact with a plant, then clearly the situation has become too complicated. 

One thing is certain, however, organic foods opened the door to higher quality products. In that vein, other options have found their way onto the menu: fresh, local, homemade, vegan, bulk … even products nearing their expiration date and sold at discounted prices. Localism, short distribution channels and sustainability have all landed on our dinner plates. 

To certify all this progress, greater emphasis is placed on transparency and thus proof. Since 2017, product quality is quantified through nutri-scores, thanks to apps like Yuka.

Organic foods are good, fresh is better and it has accompanied the dramatic surge in popularity of curbside pickup. 

Fresh has become the new norm for everyone. It tops organic foods, as long as those remain elitist. It democratizes the best food quality for everyone. It can also have a local (or even organic) component. It fits in well with curbside pickup because it promises what curbside pickup cannot offer, namely product selection at the time of purchase. You would never buy tomatoes through curbside pickup, since they will be unripe, bruised or rotten. I may be willing to let someone else collect my dry goods, but I choose my own fresh vegetables and fruit. 

The food ecosystem in full transformation

From production to manufacturing to distribution, the entire food supply chain needs to undergo a transformation. The task is ambitious and requires a collaborative effort. I eat better because I produce better, ship better, promote more local foods. At Advancy, we are seeing this trend in our own business as food producers and agribusiness are getting involved. 

A row to hoe and seeds to sow by ALL food chain participants

The CONSUMER. He has raised his expectations and emphasizes health and well-being: eat healthier and fresher. He is also becoming a “consum’actor” (a real term) and seeks to eat local foods and reconnect with his local environment. 

FARMERS. Stigmatized over the past 20 years for the pollution they caused, and pressured by a downward price spiral, they can use this challenge as an opportunity and path to a better future. The farmer has to come up with his solutions, his local markets, his own supply chains that are “sufficiently” clean and perhaps even organic.

In this new era operating on a new scale, the economy is well positioned for responsible agriculture. Organic foods are one path to pursue. In March 2021, the European Commission set a goal of 25% organic farmland by 2030, up from 9% today. This goal will be supported by the CAP. 

COOPERATIVES. They need to help farmers seize the current trend. One can no longer ask a farmer to stop using agrochemical products and wait for the soil to become decontaminated without the possibility of selling his products at a premium in the meantime. That is too complex for the farmer, who faces a genuine transition problem. The cooperative has a major role to play to help enable this transition by promoting mini supply chains, offering compensatory payments, encouraging best practices and helping to create differentiated product offers. 

AGRIBUSINESS COMPANIES. They have a considerable interest to invest in this responsible consumption by seizing the opportunity to create critical mass and help the supply chains adopt a new paradigm. They have to adjust their own paradigm of scaled up processing facilities versus local harvests. They have to get their brands to adopt this new standard. 

DISTRIBUTORS. The distribution sector has to differentiate between fresh, organic and local. It will have to properly negotiate these three trends, which are not exactly the same but all share a post-Covid objective of developing closer ties to the consumer with fresh products he can see and smell. It is time to reconnect with the product. 

BRANDS. They lie at the heart of the problem and also have a major role to play in this fresh and organic world. What is the point of being a good global brand when I want to be local, healthy and responsible? That is the question that has to be asked today. 

Finally, private label brands seek to grab the lion’s share of the market, and distributors are backing them in a big way. These brands enable store chains to play to their strengths. Supply chain and local for Intermarché, organic private label at national brand prices for Franprix and Leclerc. In all cases, we are seeing new mechanisms that vary by store chain, offer value, make sense and need to be adapted to suit the target customer. 

For dessert, a delicious conclusion 

The paradigm has changed. The old one – “Eating well is expensive and affordable food cannot be responsible” – is dead. 

The winners will be those who successfully play the new hand. 

It now makes financial sense to be environmentally responsible, for everyone, from farm… to table. The circle has been closed.

How does that taste?

Written by Eric de Bettignies, Founding Partner Advancy