Funviralpark Dive briefs:
- According to a report published by Morningstar, 60% of processed food companies have poor or no comprehensive water management practices in their direct operations, and 43% have them in their supply chains. It has been. This financial services firm analyzed the practices of 114 processed food companies around the world.
- The report names General Mills and Tyson Foods as two CPGs that are contributing to solutions that manage water risks and exceed industry standards through their operations and supply chain.
- According to Ceres, the food industry uses over 70% of the world’s freshwater supply. Water problems such as drought pose significant risks to the future of food production, and investors and other stakeholders are putting pressure on CPG to reduce its use.
Dive Insight:
The effects of the drought have hit agriculture, especially in the western United States, this year, with growing seasons worsening for crops such as lettuce and apples and higher prices for agricultural commodities in the fall.
A Morningstar report names it one of the largest sources of groundwater in the United States. Ogallala Aquifer — Across South Dakota, Wyoming, Nebraska, Colorado, Kansas, Oklahoma, Texas, and New Mexico. According to reports, it is currently expected to be 70% depleted by 2070. Crops grown in the Great Plains region, which lies beneath the aquifer, produce one-fourth of US crops, including wheat and corn.
Food companies are largely unprepared to address shortages in these growing regions, according to the report, and should provide more targeted plans to address shortages. The authors urged stakeholders involved in food companies to promote a more holistic approach to water management that takes into account all types of physical and regulatory risks.
Morningstar said in its report, “Water requires concerted action by multiple stakeholders to manage specific watershed resources that serve and benefit all.” But recognizing that individual water security depends on the engagement of stakeholders and the actions of others can make a difference in each basin.”
Morningstar rated how food companies are addressing water risks out of 100.
Food companies scored an average of 43 for their operations and 46 for how they deal with water risks in their supply chains. General Mills scored 76 in Operations and 82 in Supply Chain. Tyson received his 61 for his own business and 70 for his supply chain. The report did not name the other companies it evaluated.
Regenerative agriculture efforts in partnership with General Mills and the National Fish and Wildlife Foundation were highlighted as positive examples for saving water in the supply chain, the report said. The report says both General Mills and Tyson currently lack sustainability requirements for the production of certain products and say they will improve how they manage water in their supply chains.
