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4-Course Insight on Global Food and Energy Trends

The sprawling international food system is responsible for powering our human world and keeping nations fed. It is testament to the industry’s innovation that food production has broadly kept ahead of a global population that surged from 1 billion people in 1800 to over 7.7 billion today.

The world’s global energy system tells a tale of similar progress. Energy access is the “golden thread” linking social and economic growth, and ultimately human development. Today, 89% of the world’s population receive access to electricity; in 1990, that figure was just over 71% – an impressive growth in just two decades as global population continues to rise.

Yet food, like energy, is experiencing an era of unprecedented global challenges. Here are four key food and energy trends affecting both industries.

1. Finding alternative sources to growing demand

The United Nations projects that the global population will reach 9.7 billion by 2050. In parallel with meeting the growing demand for food, water scarcity has been a pressing isse for the agricultural industry.

Agriculture consumes more water than any other industry, much of it lost through inefficiencies. Chocaholics will be shocked to find out it takes around 1,700 litres of water to make your average chocolate bar, making it the world’s most water-intensive foodstuff. The concern with beef is similar, with over 15,000 litres of water required for every 1kg of beef produced.

These challenges have spurred consumers worldwide to begin demanding for more viable, sustainable alternatives.

the need to match local demand with consumption persists in regions such as Southeast Asia

The switch to ‘flexitarian’ diets that significantly reduce meat and dairy intake are an increasingly common trend, with ‘fake meat’ options now being pioneered, produced, and distributed across the world.

These challenges are not unique to the global food industry. Experts have attempted to predict exactly how long we have until fossil fuel runs out. But however much we have, what’s clear is that burning the fossil fuels still available underground would undermine global efforts to mitigate climate change.

That said, the need to match local demand with consumption persists in regions such as Southeast Asia, where around 45 million people still lack access to electricity. Fossil fuels remain a cheap and popular choice, though many countries have also begun expanding their renewable capacities, with several companies taking the lead in embracing the green transition. However, the shift to renewables requires extensive investment, political will, and private sector commitment.

2. Innovating to reduce our ecological footprint

The sustainability challenge is manifold – from an input perspective, industries must learn to cope with limited and dwindling resources (as above). On the other end, industrial activity produces volumes of waste; finding ways to manage this output will be key in reducing our collective ecological footprint.

The food industry is rapidly innovating to help tackle the issue of plastic overuse. An estimated 40% of plastic food wrapping is used once then discarded. Despite this, plastic also ensures food is not wasted. The shelf life of the humble cucumber for example is roughly three days unwrapped, but can be extended to almost two weeks with plastic wrapping. New materials made from fish waste, or even grown from mushrooms, are helping replace that burden.

Like the food industry, the energy industry is looking at ways to reduce wastage. Within the energy industry, innovations such as carbon capture and storage are exploring ways to repurpose carbon dioxide present and reduce our carbon footprint.

Smart electricity infrastructure represents another powerful catalyst in reducing energy wastage. Market-facing developments such as smart meters, smart lighting, and energy efficiency technologies all contribute to greater consumer awareness, participation, and responsibility in energy consumption.

3. Digital transformation to improve yield and efficiency

In Malaysia’s palm oil plantations, drones are being used as a cost-effective tool to survey land and identify vacant spots to maximise land use. Alongside this, remote sensors are being utilised for assessment of crop health, soil conditions, and hazard management, improving yields and reducing wastage.

Power companies around the world are also facing challenges in meeting growing electricity demand in the most efficient way possible. Electricity demand is expected to increase by 2.1% annually to 2040, growing from 19% of final global energy consumption to 24% over this period. Drone technology similar to the one used for Malaysia’s palm oil plantations can be leveraged to enhance electricity distribution systems, or plan infrastructure expansion in rural areas.

Besides this, widespread introduction of sensors creates new areas of opportunity for emerging artificial intelligence (AI) solutions. Automated food sorting machines are leveraging AI to improve food quality by analysing and sorting produce, identifying impurities and removing foreign materials.

Similar AI analysis offers a powerful tool in the power industry, enabling predictive maintenance software that can identify potential failures in power stations, reducing shutdowns and saving significant operational costs.

4. Empowering and personalising services for customers

This provides an opportunity for food producers to differentiate their products

Meeting evolving customer expectations is a challenge for both the energy and food industry. So far, COVID-19 has inspired a growing focus on fitness and healthy eating habits. This provides an opportunity for food producers to differentiate their products and decommoditise their offerings. In a global market where most goods are mass produced, a brand or product’s purpose sets it apart from the rest.

Global sweet giant Cadbury offers an example of a corporate response to this trend. The public spotlight on the company’s environmental and community impact has forced a renewed focus on ethical supply, leading it to establish its own Cocoa Life community fund to support farmers and promote sustainable cocoa production.

Food and energy trends

Similar transitions are emerging in the energy industry, where growing consumer demand has led to the rise of niche products such as Malaysia’s green rider renewable energy tariff. Customer decisions are increasingly based on sustainability and ethical consumption, a shift which will be further enabled by increasing market liberalisation. Time-of-use tariffs that unlock cheaper energy rates at low-peak times, delivered through smart meter technologies, are more examples of how the global energy marketplace is placing control into the hands of consumers.

As we can see, the challenges faced by the different economic engines powering humanity are not unique. Many of the challenges industries face today are underscored by a deep and urgent need to protect our ecological systems while promoting mankind’s development. In meeting that challenge, technology, innovation, and managing changing consumer expectations will be fundamental to success.

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