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Fi Europe 2023

How food retailers can contribute to net zero [Interview]

Article-How food retailers can contribute to net zero [Interview]

Fi Europe 23 Interview with Cyrille Filot, RaboResearch
Most food retailers have committed to achieving net zero emissions by 2050. But with 97% of retailers’ emissions coming from the products they sell – and not their own distribution operations – they need to encourage suppliers to change practices upstream, says Cyrille Filott, global strategist for consumer foods, packaging and logistics at RaboResearch Food & Agribusiness.

How does the food retail space feel about the Paris Agreement and the pathway to achieving net zero emissions by 2050?

“Most retailers in the US and Europe have committed to net zero. The commitment has been through the Science Based Targets initiative (SBTi), in which companies can commit to a strategy of aiming for a maximum 1.5 or 2.0 degrees increase in global warming.”

“SBTi will hold companies accountable for delivering on the targets. The Science Based Targets’ process has five stages: committing, developing, submitting, communicating, and disclosing. Some retailers are at the first step of the process; others are more progressed. Ultimately, we expect most retailers to commit, submit and disclose.”

Is there dissonance within specific sectors or groups of the food retail industry?

“Not really; if one has to speak of dissonance, it is the rate of change and implementation of the changes. Some retailers are at the early stage of their thinking, whereas others are more advanced. Another noteworthy point is that the rate of change in Europe is higher than in the US. Still, most larger retailers in the US have committed.”

Where are food retailers along the pathway? What informs this position?

“Retailers move at different paces, which has to do with the management of companies and how much of a priority net zero is to them. Net zero may have become a lower priority in the current high-inflation environment. We expect this topic to move up the agenda towards the back end of the decade. Many companies have set intermediate targets – mostly for 2030 – so there may be some pressure to achieve these.”

What are the core challenges that food retailers face in reaching net zero? How can they overcome these?

“The most important challenge is that, of all retailer emissions, on average 97% is scope 3 [in other words], the products that are sold. So, changing lighting or purchasing electric vehicles helps, but in the end, it does not move the needle. It is about changing practices upstream – whether it is packaging, farming, or producing, all can be done in a more environmentally friendly way.

“However, how can the industry change the practices of retailers’ suppliers? And who is going to pay for these investments?”

What opportunities lie ahead for food retailers that make reaching net zero emissions one of their immediate priorities?

“Net zero is seen as beneficial to all. I am not convinced the consumer cares; as citizens they perhaps do, but when they enter the supermarket, other priorities, such as taste and price, matter more. Achieving net zero is a much longer commitment to satisfy demands by the aforementioned external and internal stakeholders.”

Is net zero part of the sustainability puzzle, or is it the end goal? Is this expected to grow in priority over the coming years?

“It is only a part of the puzzle. Sustainability is broad and includes many topics, such as nutrition and waste. On the environmental side, we see increased attention to biodiversity and freshwater scarcity.”

“Net zero is a long way out and may never be achieved. It is going to be a long journey…”

What do you expect to see in the food retail sector as it relates to reaching these goals over the next 12 months?

“Priorities may lay elsewhere for some retailers. In dealing with the food inflation crisis, for example, I do not expect a lot of visible progress in the next 12 months. However, a lot of planning is done in the background, so suppliers should also prepare!”

What examples can we expect and how will they impact the food supply chain?

“I expect initially there will be a focus on quick wins, such as changing packaging materials. However, more change is required to shift focus to the actual food and beverages. Reformulation of ingredients might be helpful. Ultimately, we believe that most change should happen at the farm level. Farming practices need to be changed to lower emissions.”

What recommendations do you have for R&D professionals and manufacturers as they work towards reaching net zero?

“If they have not familiarised themselves with the journey towards net zero, they should. Their stakeholders and clients will come to them with questions about their ingredients’ footprint and whether formulations can be changed for existing products. New products may require an additional layer of thinking in addition to a product’s taste, price and properties.”

About the Speaker

As a Global Strategist at RaboResearch Food & Agribusiness, Cyrille Filott is responsible for setting and executing the global research agenda for Rabobank’s Consumer Foods, Packaging & Logistics franchise.

As part of his role, Cyrille presents in boardrooms on topics that are top of mind or should be within downstream food and agribusiness-related companies and at large industry events like he is here at Fi Europe 2023. The Consumer Foods-to-Go podcast is also a product of the work Cyrille does. A new episode is launched every three weeks on podcast apps and music services such as Spotify and Deezer.