The system has reached its limits and we are pushing through these limits, so why don't we stop?
Emmanuel Faber, CEO Danone
Food industry has to change the mindset
The food industry has to change its mindset on health and sustainability, says Danone boss, Emmanuel Faber, to just-food.com.
Danone has declared an "Alimentation Revolution". The France-based food and beverage giant has urged the industry to join a "movement" that aims to "nurture the adoption of healthier and more sustainable eating and drinking habits".
Emmanuel Faber, Danone's CEO, made the call at The Consumer Goods Forum in Berlin early this summer. Dean Best (www.Just Food) caught up with Faber after his speech to find out more about what he says is Danone's "manifesto", how it is defining the company's actions and why the industry should join them.
The international food system can, in many ways, be deemed a success, playing an important role in, for example, reducing malnutrition and increasing life expectancy across swathes of the world's population. Equally, however, industrialised food production has had significant negative impacts on health and on the planet's resources, and those impacts are escalating.
It is becoming clear a growing number of food industry CEOs believe the way of doing business has to change. Among them is Emmanuel Faber, CEO of France-based dairy, baby food and soft drinks Danone.
The growth of industrialised, globalised food production had brought nutrition to many but it has come with "unprecedented, probably unexpected consequences – the explosion of non-communicable diseases and the depletion of the resources of the planet", Faber told delegates at the CGF summit.
"Food is precious – and we called it a commodity. We called it a consumable. We made it a consumer good. We let market forces drive demand and drive supply. And we are hard-wired for salt, for fat, for sugar. Unlike what Wall Street is trying to tell us, there is no invisible hand – in particular there is no invisible hand when it comes to doing the right or wrong thing. The system has reached its limits and we are pushing through these limits, so why don't we stop? We don't because the consumer doesn't realise. The consumer does not realise because the food system has disconnected people from their food."
Nevertheless, Faber is keen to bring the discussion back to whether food companies are willing to open themselves – and the industry – up to scrutiny. The Danone CEO argues that to enact real change business has to recognise where it is and be transparent about it. He believes a change in "mindset" is needed at some companies.
To suggest the industry is uninterested in health and sustainability would be unfair. It has created multi-stakeholder organisations, set out pledges to make products healthier and mitigate environmental impacts. Companies have put in place in-house strategies aimed at making their manufacturing more sustainable and products healthier. Good work has been done and progress made.
What Faber and other CEO-advocates like Polman are saying is the sector not only needs to do more but must not shy away from awkward truths, and must embrace radical and disruptive ideas to work towards a sustainable future.
The faltering recovery from a devastating global recession and volatility in key emerging markets may represent a new normal, and can no longer be an excuse for not facing the long-term investment imperatives that health and sustainability concerns now represent.
What is more certain is there is a new normal with regard to consumer behaviour. More consumers are voting with their wallets or their clicks, when it comes to health and sustainability, and this is perhaps helping to focus the minds of many business leaders, and the investment community.
As Faber told the CGF: "When we talk about sustainability, we talk about our licence to operate. When people think about their food sovereignty, they are looking at their licence to operate and how they will accommodate us. This is a huge change and this will disrupt our business models. This will be our responsibility to adjust how our companies work."