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Oil Depletion and Food Distribution: Some Comments

Oil Depletion and Food Distribution: Some Comments. Dr. David Hughes Emeritus Professor of Food Marketing “Fuelling Food in WA: How Will We Eat When Oil Runs Low?” University Club, Perth, WA October 3 rd , 2008. Price Range for Oil Over Next 3 Years?. Maybe US$75 per barrel Or US$275 !.

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Oil Depletion and Food Distribution: Some Comments

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  1. Oil Depletion and Food Distribution: Some Comments Dr. David Hughes Emeritus Professor of Food Marketing “Fuelling Food in WA: How Will We Eat When Oil Runs Low?” University Club, Perth, WA October 3rd, 2008

  2. Price Range for Oil Over Next 3 Years? • Maybe US$75 per barrel • Or US$275!

  3. The One Lakh Car - US $2300.00

  4. Location of World’s Oil Reserves, Top Ten Countries. (End 2007, barrels billion) Source: BP

  5. Corn prices set a series of all-time highs in 2008

  6. USA Maize/Corn Use for Ethanol in MMT Source: www.paulaho.com

  7. Ethanol Plants Flourish in the USA, 2007/08 Source: www.paulaho.com

  8. Let he who is blameless cast the first stone! • “Obesity is the most important nutritional disease in affluent countries” The Lancet (Editorial), 1974 • in many European countries, +50% overweight and +30% obese (2002 data) • overweight kids increasing; +30% in Greece, Italy, Spain and Portugal • convergence in European diet over past 40 years – Mediterranean countries intake of sugar, saturated fats, cholesterol up, but down in the North • EU-15 Kcal/person/day up 22% 1961 to 2001 Source: International Obesity Task Force

  9. Evolutionary Path of the Modern Food System • Increasing global sourcing • Move away from local production • Loss of seasonality and move to 52 week availability for fresh foods • Premium fresh foods air freighted • Shoppers use cars to ferry food products • Supermarkets rationalise supply base and seek mega-providers from far afield • Dietary changes – from indigenous staples to wheat; meat protein from grain fed animals; more processed products

  10. Increase pork consumption by 1 kg per capita in China and ……. • Requires an additional 1.3 million tons of pork • Requiring 5.2 million tons of feed grain (corn) • Which will mainly be imported

  11. Share of Household Expenditure on “At Home” Food & Non-Alcoholic Beverages(select countries; 2006) Source: ERS, USDA

  12. What Sort of Food Industry Future? • 2007/08 food price inflationary period just a blip (like 1973/74) – business as usual by 2010 • Medium-term imbalance in supply and demand – best solution to high food prices is high food prices; situation normal (as 1975-2005) by 2012 • New era with focus shifting to greater sustainability, more local, much greater emphasis on environmental aspects, mix of high tech., and improved traditional practices • “We’re buggered!” – Malthusian worst case scenario, with social chaos, national hoarding

  13. “We conclude that government cannot meet its own targets on health, environment and sustainability .... and fair trade without a concerted effort to harness the power and influence of supermarkets behind the UK’s public policy goals.”

  14. UK Department of Transport news release, September 11th, 2008 • “Transport Minister .. Announced a (A$150) million boost to the Sustainable Distribution Fund to help the freight industry reduce costs and cut emissions - …. Money targetted at increasing the use of rail and water transport”.

  15. The Tesco $1 Billion Green Pledge: “Going Green is Just Good for Business” • Leahy (CEO) “Promote a revolution in green consumption by bringing environmentally friendly goods to the mass market”. • products labelled with carbon counters • “Green” loyalty cards for organic, fair trade, biodegradable, energy efficient products • reduce produce air-freighted from 3% to 1% of sales • more energy efficient products in “Value” range • cut energy use in-store and distribution by 50% • truck fleet to run on 50% bio-diesel • establish Sustainable Consumption Institute at Manchester University

  16. Sustainable Technology Fund

  17. What’s Wal*Mart up to on Environmental Issues? • environmental task forces across the business in concert with suppliers • most effort to-date focused on: - energy use in stores - fuel economy re. truck fleet (inc. aerodynamic re-design, banning engine idling, improved tire design - reduced packaging (5% reduction by 2013) For Wal*Mart, “going green” is a matter of delivering competitive advantage for its business

  18. Changes at the Household Level? • Energy efficiency growing concern of household heads - insulation, cooking technology, transport • Home delivery of “drudge” shopping – ingredients, meal components, and meals • Continued increase in demand for local/regional foods • Home energy self-sufficiency moves (e.g. solar power, electric cars) • Community self-sufficiency initiatives for food and energy, serious recycling, shared transport • Carbon consciousness goes main stream

  19. Role of Government: Leadership? • Increase taxation on fossil fuels • Carbon taxes on polluters/energy inefficient • Tax breaks on energy-saving products • Increased funding for commercialisation of pilot renewable energy schemes • Energy saving awareness education • Tariff reduction to reduce net carbon impact of imported foods/ingredients • Joined up policies on agriculture, food security, energy, health, environment and sustainability – creating a vision of a sustainable food system

  20. Post Farm Gate Food Industry Initiatives • Driven by need for cost reduction and pressure from key stakeholders (e.g. retailers, special interest groups, government) • Carbon neutrality seen as competitive weapon (e.g. New Zealand wine industry) • Acknowledgement that business growth is contingent on “going green” – status quo not sustainable • Like health and well-being, it’s a journey – some companies are in the fast lane, some in the slow lane, some are yet to start!

  21. CONTACT POINTS: e-mail profdavidhughes@aol.com telephone numbers office +44(0)1600 715957 fax +44(0)1600 712544 mobile +44(0)7798 558276 www.profdavidhughes.com

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