How foodservice operators can reduce emissions without losing customers

Wednesday 21st September 2022

Having set themselves ambitious CO2 emissions reduction targets, leading foodservice operators across the globe now need to focus on developing strategies that will get them there without alienating customers, according to a new report by agribusiness banking specialist Rabobank.

In the report Foodservice Race to Net Zero, Rabobank says addressing climate change and reducing emissions have taken on increasing importance in the consumer foods sector, with foodservice chains among the most ambitious target setters.

“Leading foodservice operators have set goals to reduce their greenhouse gas emissions by almost 50 per cent on average by 2030,” the report says.

For foodservice operators, around 90 per cent of total emissions are generated outside the premises, along the value chain (so-called ‘Scope 3’ emissions) and within these, purchased food and beverages are the largest contributor.

“At the restaurant level, over 50 per cent of Scope 3 emissions come from purchased goods and services, in particular from food and beverages, followed by packaging,” explains Maria Castroviejo, Senior Analyst – Consumer Foods at Rabobank. “Transportation and distribution come at a distant second, representing 20 per cent of the total on average.”

Reduction strategies

In the new report, Rabobank identifies six key strategies the industry can take to reduce emissions, with implications for the entire value chain.

· Menu reformulation: Switching to lower-emission ingredients can be one of the most effective ways to reduce emissions. One common way to do this is by expanding vegan and vegetarian offerings or substituting chicken in place of higher-emission beef.

· Engaging with existing suppliers: Using ingredients coming from sustainable farms can help bring down total emissions without drastic menu changes. Operators may choose to keep the same ingredients, but work with suppliers to improve products and reduce emissions at the source.

· Food waste reduction: If companies can better predict what and how much food will be sold, they can reduce the quantity of ingredients that needs to be bought, transported, and cooked. This, in turn, lowers a restaurant’s carbon footprint – and costs.

Other key emission reduction strategies include local sourcing, consumer nudging (which focuses on encouraging consumers to make climate-friendly choices), and the electrification of transport.

“For each company, the solution very much depends on the customer being served,” says Castroviejo.

“Menu reformulation, such as switching to more plant-based ingredients, might work very well for some restaurants, but it could drive away demand for others. Making less visible changes to the menu while sourcing ingredients with lower emissions is another option. It is crucial that foodservice operators have a good understanding of their customer base. Working in alignment with the suppliers is equally important.”

Implications for New Zealand

Rabobank NZ Head of Sustainable Business Development Blake Holgate said global food service companies were looking closely at their supply chains for emissions reductions, and suppliers – including those here in New Zealand – will increasingly need to work towards being part of the solution – or risk being seen as part of the problem.

“Several New Zealand agribusinesses have supply agreements in place with major global food service companies, and these global companies remain a key sales channel for a range of New Zealand food products. And it’s important to realise that companies like McDonalds will increasingly expect their suppliers to demonstrate how they’re reducing emissions from the food products they are supplying,” he said.

“The sustainability attributes of these New Zealand agribusinesses has been critical in allowing them to form these partnerships, and supporting these global food service companies to achieve their emissions reduction goals is likely to be an increasing focus of these partnerships moving forward.”

Full report and image of Rabobank NZ Head of Sustainable Business Development Blake Holgate attached.

Blake is available to conduct interviews on this report.

Rabobank_Foodservice-Race-to-Net-Zero_Hanssen_Castroviejo

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