The events of the past two years have placed extraordinary stresses on food supply chains around the world. According to the Organisation for Economic Co-operation and Development, there were bottlenecks in farm labour, processing, transport and logistics, as well as shifts in consumer demand. To minimise the impact of these disruptions, however, policymakers and those in the food industry quickly responded to the circumstances and the world managed to avert a global food crisis.
Nonetheless, the pandemic might have pushed up to 132 million additional people into chronic hunger and the number of undernourished may have increased to as many as 811 million people in 2020, according to the UN's Food and Agriculture Organisation (FAO), a number which is a staggering 10.4 per cent of the world's population. The FAO cite the devastating effects of the pandemic on jobs and income, especially in developing countries, as one of the main drivers for this increase.
This is a deeply concerning trend. But couple this with the risks posed by climate change and its impacts on the agriculture sector – for which we are still woefully underprepared, according to a recent report by the Stockholm Environment Institute – the resulting impact on livelihoods, food prices and global food security could be extremely severe.
Global investment firms, like Investcorp, must be a part of the solution to avoid wide-scale global food insecurity. This can be achieved by deploying capital to support innovative farming techniques, technological innovation in food production, deeper supply-chain integration and widespread adoption of digital technologies and platforms. These will be key to providing food security and sustainability across the GCC region.
FreshToHome, an Investcorp portfolio company, and one of the world’s largest fully integrated fresh fish and meat e-groceries – with fast expanding farming, supply chain and processing capabilities in Abu Dhabi – is an impressive example of how the use of cutting-edge technologies is furthering the availability, access, and quality of food in a sustainable manner in India and across the GCC.
Approximately 14 per cent of all food globally is lost along the supply chain before it even reaches the consumer. According to the FAO, reducing food loss and waste is therefore critical to improving the food security situation of vulnerable groups all over the world.
By investing heavily to build a large cold chain infrastructure operation in India, FreshToHome has cut out several layers of middlemen to source directly from local farmers and fishermen from more than 125 harbours, reducing what was a multi-day supply chain to less than 36 hours, and resulting in a waste yield of only 1.5 per cent, approximately ten times lower than the global average.
Furthermore, by leveraging predictive planning and precision agriculture and aquaculture technologies to optimise supply and demand more accurately, the company is not only able to reduce food loss, but also ensure that fishermen and farmers gain higher utilisation of their harvests and therefore receive higher incomes.
Through its extensive online presence across more than 80 cities in India and the GCC, and an increasing number of “offline” stores, the company can ensure the continuous availability of fresh food, with higher nutritional value, to greater numbers of people.
While the world may have demonstrated successes in global co-ordination in response to successive lockdowns and movement restrictions, such ventures can serve as an example of the sorts of companies that together could mean the difference between life and death for millions of people globally.
It is incumbent upon investors to recognise the contribution that such companies can make to local economic development, better livelihoods, and to the resiliency of both regional and global food systems.