IDM ¦ Sustainability
How is the global dairy
industry tackling the
sustainability challenge?
Sustainability is in everyone’s mind today and policy as well as markets
have reacted and keep on changing.
Author: Christophe Lafougere, CEO Gira, contact@girafood.com, phone +(33) 4 50 40 24 00,
www.girafood.com. Summary of a presentation at the Eucolait General Assembly, 10th of June 2021.
Food production and consumption
contribute 20% to the
global GHG emissions and account
for over 90% of worldwide
freshwater consumption.
The likely growth of world population to
10 billion until 2020 may increase foodrelated
emissions by 46% and land-use by
49%. To meet climate-change goals we
simply need to change the way we live,
eat and drink.
There are many different trends in the
food markets like food safety, convenience
or indulgence. But sustainability has
evolved into a mega trend that seems to
become one of the most important moves
for industry and consumers alike. In a recent
survey, 55% of 30,000 interviewed
consumers in 60 countries said that they
are willing to pay more for foods and services
from sustainable produce. Companies
are about to exploit this and developed
means to reassure consumers that
they supply exactly such products by developing
labels such as the Eco-Score.
Organic in the focus
Organic food production moves to the
core of the whole sustainability movement.
20 · July/August 2021 ¦ international-dairy.com
Organic has long been perceived
as the most sustainable means of food
production. The market has grown over
the years and reached mainstream after
discount chains have added organic
products to their portfolios – making
organic cheaper in general. But naturally,
there is a ceiling to this segment.
Figures from France indicate that retail
sales of organic foods may have
reached a peak already. Whether sales
will stay on this level or will decline
again has to be seen.
The European Green Deal has proclaimed
the target to grow organic
food sales to 25% of total food sales
by 2030. If that will become a reality,
we need more organic producers.
It can be expected that about 65,000
conventional dairy farms in Europe may
convert to organic. That means that
we have 65,000 farms less producing
conventional. But more important is
that organic milk may turn into a mass
product going the same way as GMOfree
milk which is the new ”normal“. If
organic production becomes a normal
itself, margins will decrease and the
need for state intervention/subsidies
will grow. Premiumisation in this segment
could be lost.
The Green Deal will also see for less
use of fertilisers and pesticides. This
may decrease yields in plant growing,
thus decreasing available feed. The EU
milk production will no more increase
at the rates we are used to (1.7%
CAGR in the past decade). In best case
a 0.9% growth will be possible during
the next 5 years. At the same time,
production costs will increase bringing
producer margins under pressure and
making the EU dairy sector less competitive.
Last, consumer prices in the
EU may increase accordingly. All in all,
EU milk production could decrease by
8% in the wake of the Green Deal. If
/www.girafood.com
/international-dairy.com
link
