Dive Brief:
- Supplies of food crops for people and animals across the globe face serious threats from rising temperatures, according to a report released Monday from the United Nations Intergovernmental Panel on Climate Change.
- The panel said the world is 1 degree Celsius hotter than it was at the beginning of the industrial revolution and could be 3 degrees hotter by the end of the century. If global temperatures rise 1.5 degrees by 2035, which the panel predicted could happen, the corn crop may be reduced by 10%, pressuring food prices for a range of commodities. To avoid the 1.5-degree rise, net emissions of carbon dioxide need to drop 45% by 2030 and hit net zero by 2050, the report said.
- "If we do not keep climate change to below 2 degrees, we face more and more disruption to food supplies," Tim Benton, a professor of ecology at the University of Leeds, told Bloomberg. "Almost every country depends on food grown elsewhere. A drought in one place can impact food prices anywhere. As weather becomes more extreme, there is the risk of increasing volatility in food supply and prices."
Dive Insight:
This new report finds no area is safe from the impact of climate change on food crops. Raising a variety of crops could become more difficult as global temperatures increase, depressing yields for corn, soybeans, rice and wheat, the panel of scientists said. The more extreme weather will make growing conditions tougher and prices higher around the world.
A drought this year impacted wheat growers from the European Union to Australia and pushed prices upward, the report noted. Contributing to the problem is the world's population, which the UN estimates will jump from 7.6 billion in 2017 to 11.2 billion by the end of the century.
Although much of the report focused on projected crop losses in Asia, Africa and Central and South America, the U.S. won't be able to avoid the negative impact to crops and food prices. The U.S. is one of the major contributors to global carbon dioxide emissions, according to World Resources Institute data reported by Business Insider. And the U.S. is also responsible for nearly a third of the excess CO2 already in the atmosphere — despite having only about 4% of the world's population.
Commodities that U.S. companies rely on for manufacturing popular products, such as cocoa, could be particularly hard hit by climate change, according to previous studies. Areas of Western Africa, where more than half the world's supply is produced, may not be able to grow enough cocoa by 2050 because of increasing temperatures. And while U.S. chocolate producers such as Hershey, Mars, Mondelez and Cargill are trying to bolster sustainability initiatives to mitigate the problem, cocoa demand continues to rise and could eventually exceed supply.
A major point the UN panel makes in its report is that serious action needs to take place now to avoid the worst effects of warming global temperatures. Since food companies are being criticized for not doing enough when it comes to climate change and sustainability, it makes sense for CPGs to dramatically increase their efforts to convince consumers they are worthy of earning the public's business.
Currently, major food and beverage companies have committed to reducing greenhouse gas emissions, including PepsiCo, General Mills and Nestlé. But many consumers and scientists have said there are more preventive measures that can be taken. A Nielsen survey even found that 66% of millennials are willing to pay more for sustainable products. Still, it won't help food firms to earn trust and higher prices for their sustainability credentials if crop yields decline to the point supplies aren't available or costs climb so high the average consumer can't afford them.
The report is the first in a series from the UN Intergovernmental Panel on Climate Change, which was invited to prepare it at the adoption of the Paris Agreement in 2015. President Trump withdrew the U.S. from the Paris Agreement in June 2017. The panel is planning to release a "Special Report on the Ocean and Cryosphere in a Changing Climate" next year, along with "Climate Change and Land," which will examine how climate change affects land use. As more information is released on the impacts of climate change to the industry, it could be an opportunity for food companies to better prepare.