Coronavirus: Is this the beginning of the end for the ‘self-sabotaging’ meat sector?
The coronavirus could end up being the "straw that breaks the meat industry's back" with a new report warning that almost three-quarters of the world's largest meat, fish and dairy companies are at high risk from an array of criteria that could spark future pandemics.
The meat sector was already enduring a tough time before the coronavirus pandemic came and shifted risk into overdrive. Increased impacts of climate change coupled with the rapid growth of alternative proteins have put billions of dollars at risk in the sector. With consumers now demanding more action on climate change, many of the public have become aware of the impacts that the meat industry has on climate change.
The main risk for the sector is a sense of inaction as other businesses and entire nations move towards the IPCC’s scenario of limiting global to no more than 2C by 2050. However, the emergence of the alternative protein market will also impact earnings, with the study predicting that alternative proteins will command at least 16% of total meat market by 2050, potentially rising up to 62%.
Now, research produced by FAIRR, a global investor network supported by institutional investors managing assets of more than $20trn, has graded 44 of the world’s 60 largest meat, fish and dairy companies as “high-risk” in a new pandemic ranking. The companies graded as high-risk include Brazil’s JBS and Indian firm Venky’s and are collectively worth more than $220bn.
Many of the high-risk producers are suppliers to companies such as McDonalds, and the FAIRR’s research, entitled ‘An Industry Infected’, warns that firms are failing to act across seven key criteria that could help prevent future pandemics.
Suppliers were ranked against worker safety, food safety, deforestation and biodiversity management, animal welfare and antibiotic stewardship. Not one business ranked by FAIRR is considered low-risk.
FAIRR’s founder Jeremy Coller said: “Factory farming is both vulnerable to pandemics, and guilty of creating them. It’s a self-sabotaging cycle that destroys value and risks lives. “
“To avoid causing the next pandemic, the meat industry must tackle lax safety standards for food and workers alike, closely confined animals and overused antibiotics. This will disrupt a supply chain already cracking from fundamental land, water and emissions constraints. The meat industry’s “food chain” was breaking long before it took an ad in the Washington Post about it. COVID could be the straw that breaks the meat industry’s back.”
The meat industry is currently struggling from the Covid-19 pandemic. As of the end of May, JBS, Smithfield, Tyson and Sanderson Farms, four of the largest meat processors globally, had seen share prices fall 25%. More broadly, the US cattle industry is set to face losses of more than $13bn.
Again, pre-coronavirus, cases of deforestation linked to cattle raising were increasing, with the wildfires of the Amazon rainforest illuminating the issue at a global level.
The response has been side-tracked by the pandemic, but British retailers are now distancing themselves from Brazilian suppliers, warning they would have to boycott suppliers in the country if President Jair Bolsonaro moves a bill forward that would enable further destruction to the rainforest described as the “lungs of the Earth”.
Sainsbury’s, Tesco, Morrisons and Marks & Spencer were among more than 40 companies to sign an open letter calling for action. Since then, new letters released publicly by Mighty Earth are calling for 21 of the largest supermarkets and retailers in Europe and the US to cancel contracts with deforesting suppliers.
“Forests around the world are being intentionally torched. Deforestation in the Brazilian Amazon is higher than it’s been in a decade, and anti-environment fanatics are determined to use the cover of the coronavirus pandemic to wreak further havoc,” Mighty Earth’s chief executive Glenn Hurowitz said.
“Our planet is in crisis. The time for polite requests to stop deforestation has passed. It’s time to cut contracts with those responsible. Customers are demanding sustainable options, and simply do not want their local grocery store stocking its shelves with products of destroyed rainforests and ethnic cleansing.”
This ecological risk isn’t confined to land-based production.
A recent report from Planet Tracker has found that salmon production is on the brink of financial ruin, a trend that has been compounded by poor ecological practices and the sudden and drastic impacts of the coronavirus pandemic.
The non-profit warns that both large- and small-scale producers in the farmed salmon sector are at risk from climate change, disease and harmful algal blooms. In addition, a collapse in wild-catch feedstock fisheries has seen the industry pressed by financial risks, including constraint-based losses and price volatility.
Another layer to this financial risk is Covid-19, which has reduced demand for farmed Atlantic salmon (which accounts for more than 92% of total farmed salmon) fall, resulting in a 14% decline in spot prices.
Planet Tracker has warned that if current practices and trends continue and coastal ecological health continues declining, total production forecasts for coastal farmed Atlantic salmon to 2025 may be 6% to 8% lower than predicted, equivalent to $4.1bn.
Alternative protein performance
In contrast to the disarray sweeping across the meat sector, FAIRR’s research lists the opportunities of the alternative protein sector. Sales of plant-based meat alternatives were up 200% year on year in April in the US, and shares of Beyond Meat have risen over 80% this year.
Food manufacturers and retailers such as Tesco, Unilever and Nestlé are focusing more on this market. A report from last year noted that companies are “seizing the opportunity” of a thriving plant-based market to assist with the low-carbon transition, with a new report noting that the alternative protein market is expected to be valued at $100bn in the next 15 years.
The report adds that the alternative protein market, currently valued at $19.5bn, can increase long-term supply chain security, with livestock emissions currently accounting for 14.5% of global emissions. The Food and Agricultural Organisation (FAO) estimates that the livestock sector is the largest user of freshwater resources and accounts for 80% of all agricultural land.
more consumer-facing products will come from low-carbon sources rather than meat and dairy. Nestlé, for example, has said that it expects its plant-based sales to reach $1bn in 10 years.
Large consumer goods firms are also prioritising vegan products and recyclable packaging over low-carbon innovation, research by CDP has concluded. CDP found that five of the seven food and drinks firms which originally offered meat or dairy products, including Nestle and PepsiCo, are now “actively innovating” to launch more vegan alternatives as consumer demands shift.
The market is expected to capture 10% of the global meat market and reach $100bn in value within 15 years.
Cases of best-practice in these food industries are few and far between, and hope of alignment with the net-zero transition is diminishing.
In the UK, the National Farmers Union (NFU) has unveiled a vision to help the sector meet net-zero carbon emissions by 2040, ten years ahead of the Government’s nationwide target.
The Union believes this can be done without ditching meat production – a move which has been dubbed as necessary by the likes of the EAT-Lancet Commission and the Intergovernmental Panel on Climate Change (IPCC).
With the role of meat in a net-zero world up for debate, the coronavirus pandemic may well be the final straw for an industry that has too long swum against the swelling green tide. Unless the small clusters of best-practice can accelerate action across the sector, this could be the beginning of the end of the meat sector.
© Faversham House Ltd 2023 edie news articles may be copied or forwarded for individual use only. No other reproduction or distribution is permitted without prior written consent.
Please login or Register to leave a comment.
Vegan ‘Meat’ Alternative better, and cheaper, than Meat
The ‘Holy Grail’ of vegetarians and vegans used to be to create a plant based food product that had the texture and taste of meat, a prize was going to be awarded by the animal rights organisation PETA. Linda McCartney won the award, with a product cheaper than meat. The new target is to produce real meat in the laboratory, but looks like it will be expensive and bad for the environment, so my invention is still better. The raw vegetable matter was flavoured, and fortified with vitamin B12 (missing from such diets) and then compacted to a density higher than beef. The result is then tenderised by automated steak mallets until the correct tenderisation of the meat you are mimicking is achieved. A few trials provides the answer to that.
As veganism is healthier for the planet than animals fed grain, uses less water, fossil fuel used in intensive farming, and greenhouse gas emissions then perhaps all vegans should be campaigning to have more of their food processed in this way.