Sunday 28th May 2017 - Logistics & Supply Chain

Challenging future for food supply chains

Anyone watching the rapid rise of the discount retailers in the grocery market could be forgiven for thinking that price is the overriding factor for consumers. However, a new report for the Fairtrade Foundation challenges that, arguing that government and business must do more to make the food supply chain “fair”.

Malory Davies FCILT, Editor.

Malory Davies FCILT, Editor.

The research, conducted by research group Globescan, shows 92 per cent of consumers said food companies should ensure food production is fair and sustainable, while 85 per cent said they expected the government to take responsibility for this.

They also want the people who grow their food to be protected from unfair trade such as low prices – 63 per cent believe UK farmers and 64 per cent believe that farmers in developing countries are underpaid for their produce.

When asked what the priorities should be for government in improving food production, avoiding child and slave labour came top of the list followed by food safety and safe working conditions for producers.

Clearly, this has significant implications for our food supply chains, so it is worth asking how committed are consumers to virtuousness?

Well, the consumers in the survey were less enthusiastic about doing something themselves. Noticeably fewer (72 per cent) thought consumers themselves had some responsibility to ensure sustainable production. Only 21 per cent thought that they themselves had a great deal of responsibility while 52 per cent though the government had a great deal of responsibility.

And, when asked if they would be willing to pay more for responsibly produced food, only 58 per cent said yes – that suggests that four out of ten consumers will always go for the lowest price.

This tends to be supported by figures from the Fairtrade Foundation itself. Earlier this year it produced figures showing that the overall retail value of the UK Fairtrade market showed a slight decline to around £1.6 billion in 2015, compared to £1.7 billion in 2014.

This decline was blamed on the collapse in the price for cane sugar, which Foundation CEO Mike Gidney blamed on the EU flooding the market with cheap sugar. This policy risked of pushing 200,000 farmers in developing countries back into poverty, he said.

And that highlights the geo-political challenges in the food supply chain. There will continue to be pressure to improve the sustainability of supply chains, but there is clearly a limit to the price that many consumers are prepared to pay.

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