The food and beverage industry could lose about $150 billion, 7% of its value, as soon as 2030 if environmental sustainability isn’t given top priority. While most organizations have set sustainability targets and goals, few have made meaningful progress in mitigating and adapting to the myriad risks – financial and otherwise – the environmental crisis represents.
Recent years have highlighted the fragility of the supply chain, with heatwaves affecting wheat and reducing yields in India, droughts leading to a $2B value-added loss since 2021 in the Sacramento Valley, and floods reducing the cocoa supply in West Africa, causing costs to increase by 65%.
Making operations sustainable in this sector is not a new goal, but companies are still not on track to achieve the extent of transformation needed to mitigate both the impacts and the business risks of the climate crisis and ensure long-term business resilience.
With environmental events increasingly disrupting our food systems, countering this on a corporate level requires executive buy-in, action and collaboration throughout the entire organization. Instead of treating sustainability as a side project, companies need to view it as central to their ability to adapt to unfolding environmental crises, but also a way to weave agility into the DNA of their business more broadly. Adopting this mindset shift and uniting departments across the company around a shared sustainability ambition is the food and beverage industry’s key to a resilient future.
Leaders across the globe are struggling to prioritize and implement sustainable change successfully.
A 2023 study by Boyden found that only 17% of organizations had a Chief Sustainability Officer (CSO) on staff. The role continues to grow in prominence, but not quickly enough. According to Quantis’ 2024 Recipe for Transformation report, company commitment and culture set by leadership is the largest driver of sustainable practices across departments.
Putting sustainability on the table within C-suites and boardrooms is essential to building a more agile and resilient organization. But, importantly, the role of a good CSO includes ensuring alignment and action across all business units while remaining flexible to navigate evolving regulations and market expectations.
36% of food and beverage executives surveyed for the Quantis report named collaboration across departments as a key success factor – and it’s true. Reducing environmental impacts and adapting to the changing climate won’t happen in a silo. To finally push towards meaningful impact and avoid system collapse, collective prioritization and collaboration is of the utmost importance.
Pivoting business processes is often put on the backburner, and it’s evident why – the process seems daunting and not as pressing as other revenue-driving activities. But with manageable tweaks and organizational collaboration, each department can contribute to the sustainability transformation of the business, pivoting from reactive to adaptive. There are four core departments that can have a large impact: finance, product, procurement and marketing.
Finance departments are critical stakeholders, particularly as regulations increase in scope and complexity, physical risks become prominent and the budgetary needs to address sustainability grow. Finance teams should:
To truly transform, we need to change what we eat. To accomplish that, food and beverage companies need to change how the food we eat gets produced. Product teams are on the frontlines of this change. Their decisions influence procurement and marketing. They need to:
The procurement department is the link between your organization and the supply chain. It is arguably one of the most impactful levers in hitting sustainability goals. If done properly, the team will:
The behind-the-scenes work is done. Now it’s the marketing function’s time to shine. They have a very difficult job: effectively communicating the organization’s commitment to combatting climate change, maintaining transparency on efforts and bolstering consumer perception. Marketers can:
While CSOs play a pivotal role in ensuring environmental, social and governance goals are integrated into corporate strategy, they can’t do it alone. The need for collaboration among various departments and stakeholders has never been greater. CSOs must prioritize fostering a culture of cross-functional collaboration to enact truly holistic and impactful sustainability programs.
For years we have watched the acceleration of climate events disrupt our planet and threaten our food systems. Sustainability teams are facing mounting scrutiny, both from regulators and consumers – as well as within their own organizations – and the pressure can be immobilizing.
Adapting requires a unified and collective approach. The role of the CSO is pivotal in connecting the dots across the business to ensure environmental risks are accounted for in the broader corporate strategy, preparing the organization to adapt to the changing climate. They must act as catalysts, fostering cross-departmental collaboration. From finance and product development to procurement and marketing, each department has a crucial role in embedding sustainability into the core operations.
Now is the time to accelerate action. Simply setting corporate-level climate targets has not proven to be enough. But by implementing clear internal direction and robust KPIs while promoting a culture of collaboration, companies mitigate risks and set a clear path to reach overarching reducing footprints. The journey towards a sustainable future is complex, but not impossible. The food and beverage industry has all the ingredients required to pave the way for a resilient and prosperous tomorrow.
Allon Zeitoun is the Global Leader and Managing Director of Quantis. Prior to joining Quantis in 2023, he was the CEO of French organic retailer Naturalia, where he doubled sales and earned B Corp Certification. Allon has a background in renewable energy consulting, strategy consulting for BCG, and entrepreneurship. He graduated from Ecole Centrale in Paris.
Charlotte Bande is the Global Food & Beverage Sector Lead at Quantis. Previously, she served as Global Head of Climate Strategy and has advised leading companies in food, cosmetics, and fashion. An advocate for "Absolute Sustainability," Charlotte holds a Dual Master’s Degree in engineering and management from the Solvay Brussels School and was named one of GreenBiz’s 30 Under 30 leaders.
