Around 70% of the natural world has been destroyed by food production in the past 50 years, but the race is on to reverse the trend
If you are looking for sectors likely to see both deep disruption and exponential progress as we move through the 2020s, there is no better place to look for clues as to how tomorrow’s Regenerative Economy will operate than the closely linked farming, food, nutrition, and health sectors.
This massive commercial nexus is not just the source of many of our current “Black Swan” challenges, taking us exponentially where we don’t want to go, but also the locus of some of the biggest “Green Swan” solutions, potentially taking us exponentially where we do want to go.
It’s easy to overlook the sheer scale of the global food and agricultural industry, but in 2018 it was valued at around $8.7 trillion, or about 10% of world GDP at the time. And this immense scale is reflected in the sector’s contribution to problems such as water stress, toxic pollution, soil loss and climate change. Just focus on that last issue for a moment: food production is responsible for a quarter of the world’s greenhouse gas emissions.
As a member of the WWF UK’s Council of Ambassadors, I regularly see evidence of the impact of global food systems on nature and the planet. You may not know it, but the sector is now the world’s biggest driver of nature loss. Want to know more? Well, read the Chatham House report, Food System Impacts on Biodiversity Loss. Its findings are endorsed by the UN. As the authors explain, the project provided “a harrowing snapshot of the ways in which current land-use systems are fueling Earth’s Sixth Mass Extinction.”
This global extinction crisis is a striking example of what Nassim Nicholas Taleb has called a “Black Swan”. Clearly no-one set out to destroy 68% of the natural world between 1970 and 2016, with goals, targets and KPIs, but that is exactly what has happened. As a result, the farming and food industries are now coming under intense pressure to move beyond responsibility mindsets and strategies, important though they are, to approaches based on ensuring resilience and, the key to long-term resilience, regeneration.
My 2020 book Green Swans built out from the first-ever “product recall” for a management concept, the triple bottom line, a concept I coined in 1994. The case for withdrawal was that, at least when viewed within a responsibility framework, the concept too often led to trade-offs between different forms of value, rather than driving integrated solutions delivering value across all three dimensions, economic, social and environmental.
The results can be dramatically different if, instead, business uses the TBL framework in the spirit of regeneration. The book’s sub-title was “The Coming Boom in Regenerative Capitalism”, which probably had some people rolling their eyes. But last September, Walmart CEO Doug McMillon publicly committed his giant retail business to becoming “regenerative”.
His speech was drafted with the help of Paul Hawken, the renowned environmental activist and author who is currently finishing his latest book, Regeneration, to be published in September 2021.
The farming and food industries are coming under intense pressure to move beyond responsibility mindsets and strategies
Meanwhile, the food sector’s embrace of regeneration has been accelerating rapidly. Unilever announced its Regenerative Agriculture Principles on Earth Day this year. The aim: to provide guidance on how to achieve breakthrough progress in terms of “nourishing the soil, increasing biodiversity, improving water quality and climate resilience, capturing carbon and restoring and regenerating the land.”
These principles build on work Unilever has been doing since at least 2010, through its sustainable sourcing program. It explains the new urgency as follows: “It takes four million hectares of land to grow the raw materials for Unilever products, which are used by 2.5 billion people every day. Despite many years of working with sustainable agriculture standards in our supply chain, this has not been enough to reverse some very worrying trends such as soil depletion, biodiversity decline and poor water quality. And time is running out. More than one million species are threatened with extinction, threatening the very ecosystems on which we depend for life. And this ecological decline is set to get worse with climate change.”
Nor is it alone in the race to define the future of regenerative food and farming. More or less around the same time that Unilever made its announcement, PepsiCo committed to spread regenerative farming practices to some seven million acres, equivalent to its entire agricultural footprint.
Such changes will inevitably bring disruption to the world’s food chains, although it may be dwarfed at times by wider disruptions brought by new technologies, including precision fermentation, and new diets, increasingly focusing on plant-based and alternative protein products. Nestlé, for example, a company on whose Creating Shared Value advisory board I served for nine years, recently announced Vuna, its plant-based tuna alternative.
If you want to get a sense of how new technology could impact animal-based agriculture, I recommend RethinkX’s study of the impact of precision fermentation on the ranching and dairying industries in America. By 2030, they conclude, “demand for cow products will have fallen by 70%. Before we reach this point, the US cattle industry will be effectively bankrupt. By 2035, demand for cow products will have shrunk by 80% to 90%. Other livestock markets such as chicken, pig, and fish will follow a similar trajectory.”
Even if they are out by an order of magnitude, farmers and food businesses are now looking at epic disruption. I distrust market research forecast, but one recent report estimated that the plant-based market will reach $480.43bn (don’t you love those decimal points?) by 2024.
Nestlé also recently reported that 87% of Americans now include plant-based protein in their diets. As these disruptive trends push from the edge to the core, it may well be that regenerative agriculture will offer the food and farming sector a profitable way out of this existential trap. We intend to track progress in our Green Swans Observatory, which launches next week.
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