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This week’s letter from lockdown provides some food for thought about how our Responsible Futures portfolios link to UN Sustainable Development Goals number 2 and number 12.  These are 2 – Zero Hunger and 12 – Responsible Consumption and Production, so you’ll probably be able to figure out that our topic of the day is what we eat and its journey onto our plates.

The Starter

I’ll whet your appetite with a quick look at how the lockdown has affected our eating habits.

We all know that what we eat, and where and when, has a big impact on our personal health and can greatly influence how much money we spend and the free time we have.  In recent times, our thoughts about food have continued to be personal, as the impact of the coronavirus has made some of our culinary customs temporarily impossible.

I’ve spoken to some of my colleagues at Waverton about this and noted that everyone has had slightly different priorities and concerns. Ellie and I are both blessed with husbands who like to cook and eat nice things, which means they have certain staples they struggle to do without. During the supermarket shortages phase, we were both drawn into their campaigns to hunt out supplies of tinned tomatoes and Lurpak butter (other brands of butter are available, but no others are edible to my husband!). For those with teenagers in the house, the lockdown has prevented their habit of escaping to Nandos to meet friends, a rite of passage placed on hold.  Other families have embraced a new way of sourcing food supplies, from local businesses and farm shops.  There have even been tales (and photos) of aromatic loaves of homemade bread.  In the middle-class suburb where I live, the news that the local high-class Italian restaurant/delicatessen was now delivering lasagne and calzone was the most popular topic of conversation in this week’s neighbourhood Zoom party.

The Main Course

Starter finished, it’s time to take a big helping of why the food industry plays such a large part in building a responsible future. I’ll also look at some of the companies in this sector that have been selected for investment in our Responsible Futures portfolios.

Most of us do our little bit to minimise our food-related carbon footprint, whether its recycling our Irn Bru can or our bottle of Gevrey-Chambertin, eating leftovers for lunch or reducing meat consumption.  However, to have a realistic chance of fixing the problems that planet and society face, we have to consider the impact of our collective actions, as well as our individual ones. If you purchase food from a supermarket, whether online or whilst doing the in-store two metre two-step, you are a tiny cog in the enormous global food supply chain.

In his book “How many lightbulbs does it take to change a planet” environmentalist Tony Juniper CBE writes that “the process that most widely influences the state of the natural world is the production and delivery of our food”. The food industry consumes vast swathes of land, huge amounts of water (agriculture is estimated to use 70% of the world’s water supply), fuel and chemicals. Its transportation from one corner of the globe to another mixes fuel usage with pollution and traffic congestion to make one big carbon pancake.

From beef steaks to chocolate bars to the 12 kitchen and bathroom products we typically use in a day that have palm oil in them, the items we consume often come from countries far away and communities that are very different to ours. The World Bank allocates much of the blame for the destruction of the Amazonian rain forest to cattle ranching and many agricultural practices contribute to the risks associated with natural disasters such as fires, landslides and floods.  It is also acknowledged that encroachment into formerly wild habitats can unleash new viruses and diseases, such as the one we are all currently contending with. People, as well as planet suffer, with the low prices paid for resources and ingredients meaning that local farmers struggle to make a living, whilst their children are malnourished and fail to receive an education.

It’s not easy to digest the “sides” that come with our main course, but the Responsible Futures philosophy is all about looking forward and seeking positive change.  The food and agriculture sector offer key solutions for development and is central for hunger and poverty eradication.

Our Responsible Futures portfolios currently invest in a thematic fund, Pictet Nutrition, that invests only in companies that “are growing as a result of their involvement across the entire food production chain, from farm to fork”. These are companies that provide solutions to increase output whilst decreasing environmental impact and waste. The portfolios also hold a number of global equity funds that include food and nutrition companies, amongst a broader range of positive impact businesses.

So, what ingredients make up the recipe for a more sustainable food system? These include the following:

  • Development of plant-based foods and alternative protein sources
  • Use of renewable energy and recyclable packaging
  • Natural refrigerants
  • Sustainable forestry
  • Techniques for protection of topsoil
  • Reduction of food waste

One of the companies invested in by the Pictet Nutrition fund because of their progress in these areas is the large cap French food company Danone, who focus on “regenerative agriculture”, a process resting on three pillars: protecting soil, empowering a new generation of farmers, and promoting animal welfare.

Amongst the mid-caps, the company Chr Hansen features in the portfolios, with a focus on minimising waste by improving shelf life. Who would have thought that we could change the world one yogurt at a time, but up to 17% of all yogurt is wasted every year in the EU, which equals a total of 1.5 million tons of yogurt. The company has developed “good bacteria” which can extend yogurt shelf life by 7 days without affecting taste.

And for Dessert (to take away)

I hope I’ve left you satisfied that the global food industry has an enormous impact on the planet, its resources and the lives of many people. It’s an industry in which we are all stakeholders and one of the few industries where the wheels have kept turning during the current crisis.

It is also an industry that offers us myriad ways of having an individual impact through our eating and shopping habits. We can choose not to buy products with excessive packaging, seek out free range and free trade and endeavour to cut down meat consumption and food waste.

The amount we spend on food shopping during the lockdown is a much greater proportion of our overall expenditure and buying from the local farm shop may be costing a little more than the supermarket. However, the feedback I am getting from my colleagues is that you get value for money from better quality produce and the reassurance of knowing the source of what you are eating.

I guess it’s a bit like investing really, the cheapest isn’t always the best and always read the label carefully!

It just remains to leave you with a food-related lock down tip. Here’s a link to the “Support Local” page of the website of Scottish Food and Drink.

Hop on here for a directory of brilliant local suppliers and manufacturers of all your favourite food and drink. Over and out, I’m hungry now…

~ Rebecca Kowalski

Please note that the content of this letter is for information purposes only and should not be considered as a recommendation to invest in any particular investment strategy or any individual company.

Although our physical offices are currently closed, we are business as usual from home, and available by phone and email as always. Please get in touch!  


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