This decade, the word ‘Sustainable’ seems to be the most popular word used in almost everything from the exterior portion of a food packaging, to government master plan, and even as the main agenda/title in a food related conference.
But what is actually the meaning of ‘Sustainable’ ? In the food and beverage space, it refers to doing business without negatively impacting the environment and society while at the same time offers positive benefits in terms of safer and healthier food products to consumers. Unfortunately, many of us seems to emit ‘affordability’ as part of being sustainable. But to many consumers, i.e. to over 3 billion people in the world representing almost half (42%) of the world’s population, access to sustainable processed food products are almost impossible as they could not even afford a healthy diet. The World Bank reported that in 2021, the global average daily cost of a healthy diet in current purchasing power parities was US$3.66. In low-income countries, the average cost was US$3.37, while in high-income countries it was slightly higher at US$3.43. Unfortunately, these healthy diet costs are much higher than the current international poverty line of US$2.15 a day.
As such, food manufacturers as well as governments have to tackle the issue of ‘affordability’ as one of the most important goal in order to ensure that all communities will have access to quality and sustainable food products. Only then, the universal goal of ‘Sustainability’ can be achieved, i.e. to overcome together the many environmental challenges like global warming, pollution. deforestation, drought, water and land scarcity through responsible farming, fishing and manufacturing.
The past 12 months have even become more challenging with rising cost of living due to inflation. Many communities were displaced back into the poverty line, while in the cities, consumers are tightening their purse and seeking for products that have added value both in terms of affordable price as well as nutritional benefits.
It has become even more competitive for food manufacturers to capture the consumer dollar with the lifestyle changes in post-pandemic period. New product formulations in favour of sustainable claims will be the trend of tomorrow and will see strong growth, according to latest Euromonitor report on ‘Affordable Sustainability’. (See Chart 2.0)
In fact, consumers are more than ready to make that change towards sustainable products, according to the report. However, market players i.e. the manufacturers have to play the big part in formulating or reformulating products to meet the goal, while not affecting the price, quality and taste of the products.
It has always been said that many consumers are willing to pay more for sustainability attributes, yet 42% of industry experts consider willingness to pay extra as the primary challenge in implementing sustainability initiatives, according to Euromonitor International’s Voice of the Industry: Sustainability (January 2023). The following Chart 3.0 showed the top 5 barriers to sustainable purchases in 2023 with ‘High Price’ being the top barrier to purchase followed by ‘Unclear Labelling’.
The greatest challenge faced by any food and beverage manufacturers, especially those proponents for sustainability, is to rein in the costs of production to make their products more affordable to the masses. Otherwise the goal itself is self-defeating.