Manufacturing News

Adapting the supply chain for tomorrow’s food security

Droughts, lagging productivity and food price volatility threaten food security, and the supply chain must react accordingly.

Worldwide food markets
In the last six years, worldwide food markets have seen increased volatility due to droughts, lagging productivity and inefficient supply chains. Source: UN FAO.

Food processors and their partners in the supply chain face a multitude of issues as newly affluent shoppers in the developing world shift from grain- and vegetable-based foods to meat and poultry. Droughts, lagging productivity and price volatility also threaten food supplies and distribution, according to the A.T. Kearney paper, Recipe for Change: Can We Feed the World?

The report is the first of a series in which A.T. Kearney consultants examine disruptive changes in the food supply and security, and explore strategic responses taken by companies today, and outline future industry scenarios.

Large gains in economic growth in developing countries, which averaged 6.3 percent per year between 2000 and 2010, have created a new global middle class. In 2000, China had 3 million households with a disposable income over $10,000. Now, it has almost 60 million households with this income, and the number of households is projected to increase to 230 million by the end of this decade, says the article.

The UN Food and Agricultural Organization (FAO) estimates that, from 1990 to 2030, meat consumption will increase from 38 million tons to 59 million tons in Asia, and from 21 million tons to 35 million tons in the Middle East and North Africa. Since producing one lb. of protein requires the production of seven lbs. of grains, increases in meat consumption alone will require nearly a 100 percent increase in global grain production from 2000 levels by 2030. Current forecasts for 2011-2012 indicate we have covered just 20 percent of this projected need, says the report.

As developing world consumers continue to demand more meat and protein, consumers in the developed world are eating less meat. For example, in the US, annual per capita meat consumption peaked in 2004 at 184 lbs. and has steadily fallen to an estimated 166 lbs. in 2012, a level more consistent with the 1970s. An equally important shift is the move away from beef, long the preferred meat of US shoppers, to chicken. In 2010, US chicken consumption exceeded beef for the first time, according to the report.

Currently, 300 to 500 companies manage a significant portion of the supply network. By 2020, few companies will control the vast majority of food supply. Farmers and producers are more likely to be corporations, and consumers will be serviced by large global retail and restaurant chains. The food industry needs to act as one to tackle the global issues of food insecurity, sustainability and safety. The interdependence of food manufacturers and retailers on food safety, sustainability, animal welfare and labor laws will create a new level of competition that will favor supply-system innovation that takes advantage of the scale and influence of the network. Collaboration and trading-partner alliances will become necessary strategic imperatives.

For global food companies, the changing landscape of the next 10 years has significant implications, as well as opportunities to make a positive commercial and social impact. Three emerging realities are already reshaping the industry. First, faster innovation cycles will be needed to meet rapidly changing customer demands in the developed and developing worlds. Second, competition between supply networks, rather than individual companies, will increase. Third, global scale will become increasingly important to meet emerging market demand and secure access to constrained resources.

For more information on the report, visit the A.T. Kearney website.

Did you enjoy this article? Click here to subscribe to Food Engineering Magazine.

You must login or register in order to post a comment.



Image Galleries

IPPE 2015

The 2015 International Production and Processing Expo (IPPE) was held in Atlanta at the Georgia World Congress Center, Jan. 27-29. More than 30,000 poultry, meat and feed industry representatives attended the event to interact with the 1,288 exhibitors on the show floor that covered more than 490,000 net square feet. At the show exhibitors demonstrated innovations in equipment, supplies and services utilized by firm in the production and processing of meat, poultry, eggs and feed products.


Burns & McDonnell project manager RJ Hope and senior project engineer Justin Hamilton discuss the distinctions between Food Safety and Food Defense as well as the implications for food manufacturers of the Food Safety Modernization Act.
More Podcasts

Food Engineering

Food Engineering March 2015 cover

2015 March

In this March 2015 issue of Food Engineering, we explore how a surprise FDA audit could be serious if you're not recording key data.

Table Of Contents Subscribe

FSMA Audit

What is the is most important step you have taken to become ready for a FSMA audit?
View Results Poll Archive


Food Authentication Using Bioorganic Molecules

This text provides critical tools and data needed to augment routine food analysis and enhance food safety by aiding in the detection of counterfeit, and potentially deleterious, foods.

More Products

Clear Seas Research

Clear Seas ResearchWith access to over one million professionals and more than 60 industry-specific publications,Clear Seas Research offers relevant insights from those who know your industry best. Let us customize a market research solution that exceeds your marketing goals.


FE recent tweets

facebook_40.pngtwitter_40px.pngyoutube_40px.png linkedin_40px.pngGoogle +

Food Master

Food Engineering Food Master 2015Food Master 2015 is now available!

Where the buying process begins in the food and beverage manufacturing market. 

Visit to learn more.