Food companies may be tempted to sideline sustainability programs to focus on geopolitical changes threatening their supply chains, market access and margins, but long-time climate activists and industry veterans argue the same strategies that drive climate resilience also enhance business sustainability during periods of political and economic uncertainty.
Both situations require supply chain traceability, transparency and diversification, radical collaboration with competitors, objective assessment of old and new partners, investment in local economies and diverse human capital, and leveraging innovative technology, including AI, to assess potential outcomes quickly and select the best strategies, explained a panel of experts gathered at Natural Products Expo West last month.
Supply chain visibility improves risk identification and reduction
Strong supply chains are central to successfully implementing climate action and navigating the impact of rising geopolitical tensions, including a current trade war and changes in immigration oversight that threaten agricultural labor, according to Julia Collins, founder and CEO of the decarbonization platform Planet FWD.
“The cornerstone of a solid sustainability program is supply chain resilience and traceability,” including a map of all partnerships from farm to table, which is “also the foundation of building a resilient supply chain in the face of geopolitical shocks and tariffs,” she said.
Reaching net zero: A roadmap to reduce emissions and increase nutrition security through strategic sourcing, manufacturing and packaging
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“When you actually have visibility into where your supply is coming from,” including not just tier one, but tier two and three as well, “you can start to remove sole supplier risk,” whether it be due to climate change or shifts in the political landscape or global economy, she explained on a panel at Natural Products Expo West last month.
“The other foundational piece, aside from building a resilient and transparent supply chain, is building those relationships. Again, this is the foundation of a good sustainability program, right? It is about engaging your upstream suppliers to say, ‘Hey, let’s talk about renewable energy. Let’s talk about regenerative organic agriculture. Let’s talk about packaging.’”
She added: “It is a conversation. It is not a demand. And that is also the kind of conversation that you need to be having to survive some of the shocks that we are seeing around the tariffs right now. Supply chain resilience and traceability and effective communication with your suppliers are the cornerstones of both of these really important things that leaders are navigating right now.”
‘Radical collaboration’ and thoughtful compromise reinforce resilience
For these types of conversations to be effective, Collins adds, industry stakeholders will need to embrace “radical collaboration,” which she said is more than winking at each other at a trade show and then not talking until the same event a year later.
“I am talking about the kind of collaboration that can sometimes feel a little bit uncomfortable. The ones where you have to make tradeoffs. The ones where you have to sit shoulder to shoulder with your closest competitor” and find solutions, she added.
Effectively working with competitors – or any partner – to drive climate action during a difficult time likely will require compromise, added Kyle Koehler, the co-founder and CEO of Wildway.
To ensure the best possible outcome for all stakeholders, he recommends using the Just Transition Framework.
The Just Transition Framework emerged in 1980s as a way to protect workers’ rights as economies shifted to sustainable production and adopted environmental regulations. It also encourages the adoption of a regenerative economy or business over an extractive economy.
“The Just Transition Framework talks a lot about how regenerative business can be looked at holistically,” and focuses on diversifying wealth, not only throughout the business, but the supply chain as well to drive social quality and change, he explained.
“Just like I believe that regenerative farming practices and ingredients and growing makes for a more resilient crop, regenerative business makes for a more resilient business during times of great change as well,” he added.
Reinforcing a supply chain – whether for sustainability or in response to geopolitical pressure – may require companies to end long-established partnerships that no longer serve them as well as begin new ones, added Lotus Foods CEO and President Andrew Burke.
When doing this, he advises, stakeholders should be objective in their assessments to identify where there are opportunities and weaknesses. He added the partnerships that got a company where it is today may not be able to get it where it needs to be tomorrow, in which case Burke advises complete transparency and empathy. But which he means companies should be open about their needs but also understand that if an existing partnership falls short it may be because of the same market shocks that are spurring changes.
“You always want to make sure that you leave a partnership with a thought of how you would enter into it,” he added.
Reassure consumers with data-driven storytelling
To further encourage buy-in and simultaneously reassure consumers, Collins encourages telling data-driven stories of impact, which she compares to a peanut butter and jelly sandwich.
“How do we shift markets? How do we shift preferences? How do we shift consumers towards something better for them? We have to use data and we have to use storytelling,” and those data-driven stories need to be like a peanut butter and jelly sandwich, she said.
“A data story alone is like a peanut butter sandwich. It is very substantial, it is high in protein, but it is dry,” she explained. “A storytelling sandwich alone, that is like a jelly sandwich – it is sweet and it is lovely, but it just leaves you feeling totally hollow. There is no substance to it.”
But when you put peanut butter, or data, with jelly, or storytelling, “you are creating something that is so much bigger than any individual part,” she added.
AI could streamline transitions
Predicting change in periods of uncertainty, like this, can feel impossible – especially when variables, such as tariffs, change quickly and sometimes without public warning.
In these cases, AI may provide relief, said Riana Lynn, CEO of Journey Foods, which is a leading AI software company for supply chain decision-making.
She explained that Journey Foods was created in part to help food and beverage companies develop nutritious products that also are cost effective and sustainable by examining analytics around ingredients and taking into account other factors, such as weather models, for long-term planning.
Beginning last fall, she said, Journey Foods began testing “geopolitical change” in its predictive pricing models for customers, including tariff data and looking for ways to strengthen the larger ecosystem.
“I really truly believe the future of American strength is based around the whole strength of North America as a region, including Canada, United States, Central America and Mexico as they share and produce the majority of what we consume here in the United States,” and so “it is important to help and serve and communicate that with our customers” through AI modeling demonstrations so that they can have leverage and trust in their customer interactions, she said.
Think global, act local
Koehler echoed Lynn’s sentiment about the importance of supporting the local economy. However, while she was talking about the local economy at a larger regional level, he encourages companies to also consider their immediate communities.
For example, he said they should ask how their companies might create additional jobs and stability as well as supply chain security by tightening the geographic boarders of sourcing and manufacturing.
This might include working with smaller partners, but in doing so giving them a chance and the business they need to grow – further positively impacting the local area.