This post is part of a series produced by The Chicago Council on Global Affairs, marking the occasion of its annual Global Food Security Symposium in Washington, D.C. For more information on the symposium, click here. Follow @globalagdev and #globalag on twitter to join the conversation.
By Peter Brabeck-Letmathe, Nestlé Chairman
In my role as Chairman of the world’s largest nutrition, health and wellness company, I know that changing the global food security agenda will take time, require a clear understanding of all the dimensions of the challenge – as well as the linkages between them. And it will also require an equally clear understanding of where targets may be conflicting.
Solutions will require efforts of all actors in the food system and continuous improvements in the framework conditions set by governments.
Triple challenge of under-, over- and malnutrition
For centuries, malnutrition basically meant lack of calories; and we have seen life expectancy increase with a higher farm output of calories and proteins.
Today, still more than 1 billion people go to bed hungry.
At the same time however, according to the World Health Organization, 1.6 billion people suffer from obesity, overweight and related illnesses. Finally, and partly overlapping with these two groups, more than 2 billion people suffer from micronutrient malnutrition, with a focus on the so-called “Big 4”: Iron, Vitamin A, Iodine and Zinc.
To illustrate what this means: according to UNICEF, between 1.9 and 2.7 million children die annually from lack of Vitamin A alone, and up to half a million a year turn blind.
Five pillars of food security
As a result, food security now comprises of five pillars.
Firstly, it is still vital to produce quantities of food with sufficient basic calories and proteins required for daily life. The Green Revolution after World War II achieved this in an impressive manner, but since 1995, the growth in per-hectare productivity has again fallen behind world population growth. And in a not-so distant-future there is the risk of massive shortfalls of cereal production due to water shortage from overuse.
Secondly, it is important to generate reliable incomes for farmers, their communities and for the overall rural population. It is the people who live in rural areas who go to bed hungry.
Some may suggest higher prices for agricultural products. But food should be affordable for low-income consumers. The development of an efficient food system after World War II is in this regard a success story, with food prices relative to wages falling by 75%. However since 2007, prices for staple food, the basis of the food basket of the poorest, have soared to a multiple of the 2002-4 average, partly due to biofuel subsidies in both advanced and developing economies.
Next, the quality of food is an essential requirement. This includes providing food that is safe for consumers, it includes the nutritional quality, based on broad knowledge and research, and food that carries the essential micronutrients.
Finally, access to food at the right time, in the right form, at the right place is critical – matters of logistics, preservation, and management represent a huge challenge, particularly in times of growing urbanisation, when the distance between farm and fork keeps increasing.
Overarching food security relies first and foremost on an appropriate public policy framework. Let me illustrate three examples.
One is ensuring property rights for land, in some countries particularly for women. Land titles for farmers provide security; they allow investment, often using the land as collateral for credits to buy plant protection, fertilisers or irrigation installations.
Secondly, while food companies can add micronutrients, and we are doing so on quite a large scale, governments must support much more comprehensive efforts in regards to micronutrients in staple foods; e.g. Golden Rice.
And lastly, it should be encouraged to promote free trade, particularly if we consider the impact of climate change: according to IPCC 2007, an overall increase in temperature up to three degrees will lead to a significant increase in global food production, but in different regions. So keeping markets open will be essential to take advantage of this potential.
Our perspective on food security, what is Nestlé doing?
A few initial words to put things into perspective: Nestlé has a global presence with its products and factories, and is the biggest company worldwide in the fast moving consumer goods sector. But despite its size it represents only 1,5% share in the highly competitive global food market.
We are fully integrated in local food systems, not producing the food but transforming it, e.g., so it becomes digestible (e.g., fermentation, milling) or accessible and trusted by consumers wherever they are (safety, packaging, logistics, etc.). Our focus is increasingly on Nutrition, Health and Wellness, products with high and increasing value-added – but not necessarily high prices. We are renovating products, carrying out research and development, and encouraging healthy eating habits early on in life. Not only does this bring knowledge to our businesses, upstream and downstream partnerships, but to our competitors too.
We contribute to food security with our day-to-day business on all five pillars of food security. Below are a few examples:
Working with farmers at the origin of an efficient food system
We work directly as buyers and long-term partners with more than 420,000 milk farmers, an important daily source of proteins and micronutrients across the world. Plus work with more than 260,000 farmers growing other crops. We help with technical assistance and where necessary, credit to improve their productivity and production, their quality and to add value. Rural development is part of our concept of ‘Creating Shared Value’, which also includes our priorities for water and nutrition.
Strengthening rural income
Often we are the only source of cash income, at least in initial stages, linking farmers in often remote areas to urban consumers. Our milk collection district in the Pakistani Punjab, for instance, is twice as big as Switzerland. Often it is the women who look after the dairy cattle and manage the cash received for milk. With regular payments, every week or fortnight, we make sure the money these women need to cater for essential needs of the family comes in reliably and predictably.
With our efficiency, e.g., by reducing losses from farm to fork, we contribute to ensuring affordable food in urban areas. In the traditional milk trade, quantity losses may amount to 15-26% (plus considerable losses in quality, according to climates). For example, Nestlé in Pakistan has brought these losses down to less than 0.6%.
And with our programme of Popularly Positioned Products (PPP), we serve lower income groups in emerging economies with high-quality products – PPP sales amount to more than CHF 12 billion annually.
Quality of food
Quality and safety for our consumers is our top priority and applies to our entire portfolio, from food and beverages to our systems and services.
Nestlé’s Quality Management System ensures safety from farm to fork. Our processes focus on quality that matters for consumers. Many frozen vegetables offer better preserved micronutrients than those bought ‘fresh’ in shops, e.g. Vitamin A in peas; traditionally traded and transported milk also sold as ‘fresh’ suffers from considerable loss of quality.
Many more examples could be mentioned, among them the fortification of standard food products. At Nestlé this includes 35 billion servings of Vitamin A, 53 billion servings of Iron, 102 billion servings of Iodine, and 14 billion servings of Zinc annually – a large part of this fortification is in our PPPs.
At the right place and time
Our organisation and logistics are one of the major contributions to food security within local and global food systems. For perishable products, such as milk, our involvement starts at the farm gate and usually ends at the retail store so products are available at the right time, in the right form, at the right place.
This concept – at the right time and place – and our contribution to it extends into the home, for instance in relation to convenience. Convenience is not primarily a luxury concept.
One of the founding fathers of the Nestlé Group, Julius Maggi, understood this well, aiming to improve the nutritional intake of families where both women and men had to work for about 14 hours per day in early industrialisation 19th century factories. He brought simple-to-prepare, protein-rich legume meals to the market - meals that would traditionally take hours to cook. Such advantages are still important today.
In conclusion food security requires a comprehensive view, beyond calories, that incorporates all five pillars. It needs well-coordinated, comprehensive and cost-effective efforts on the part of all actors in the global and local food system – both individually and jointly.
We at Nestlé, alongside many other food companies, are part of these efforts and contribute where we have knowledge and a comparative advantage.
I welcome your thoughts and feedback about how we can raise awareness on this critical and urgent issue, and in turn, provide solutions.