Our research of top materialities in the European animal feed industry shows that the level of sustainability maturity in the sector is still in an early stage, with companies tending to focus on risks and not so much on opportunities. Typically, large multinationals at the end of the value chain are driving the increase of sustainability performance. Often the result of the urgency created by their key stakeholders such as consumers, NGOs, and investors.
The dual challenge of producing larger quantities of high quality and affordable meat, milk, and eggs is to respond to the growing global demand through production systems that are sustainable on the environmental, social and economic level. Trust and confidence in the safety of the whole food supply chain is vital and therefore high standards of health and welfare for animals and people are set.
Top 5 materialities for the animal feed sector:
Source: Finch & Beak research, 2017
With the meat scandals with horse meat in Europe, and tainted meat scandal in Brazil still fresh in memory, the materiality “Responsible & healthy value chain” is a clear top issue in the industry. This addresses not only animal welfare but also includes the role of antibiotics in the value chain.
Although the primary business of compound feed manufacturers is to produce standard compound feed for healthy animals meeting their nutritional requirements, upon the prescription of veterinarians, they are requested to blend in veterinary medicinal products into the feed. The feed sector is subject to growing controversial discussions around the (over)use of antibiotics which may lead to the local bacterial populations developing antimicrobial resistance, impacting for both human and animal health. In the animal production in some regions of the world antibiotics are applied as antimicrobial growth promoters to improve the quality of the meat, with a lower percentage of fat and higher levels of protein. An EU-wide ban on the use of antibiotics as growth promoters in animal feed has already been implemented in 2006.
Case: Shareholders urge McDonald’s to phase out antibiotics
In 2017, shareholders filed a resolution requesting McDonald’s to set global sourcing targets with timelines for pork and beef raised without the non-therapeutic use of medically-important antibiotics. In the resolution, they emphasized that given growing health concerns, changing consumer preferences and industry trends, shareholders would benefit from more detailed plans that would set the company on a course to phase out the non-therapeutic use of medically important antibiotics in meat production.
Only a few months after the resolution had been filed, McDonald’s committed to reducing the use of high-value human antibiotics in its global chicken supply by 2018, and said to be working on antibiotic plans for other meats, dairy cows, and laying hens (refer to Robeco article in the download section).
Case: Partnering for innovation
In 2016 Adisseo and Novozymes, two global leaders in the animal nutrition and feed additive industry, developed and market a probiotic for poultry. Probiotics are naturally occurring live microbes that stabilize the gut flora of poultry, pigs, and other animals when ingested. They can improve animal health, growth rate, and feed utilization, thereby saving resources and improving the sustainability of the animal farming industry.
Adisseo and Novozymes estimate the probiotics market at EUR 200-300 million and 8-10 percent annual growth. The partners strive to become key players in probiotics for animals and accelerate the expansion of this fast-growing market.
Both the McDonald’s and Novozymes/Adisseo examples show that looking at materialities provide players in the livestock value chain business opportunities in the shape of product innovation and market penetration adjusting to customer demands.
Finch & Beak’s Re-Fresh Materiality Assessment is grounded in an agile business design approach, the basic concept is to conduct a thorough assessment of sustainability topics using a big data approach, with a minimum of effort.
If you want to discover the benefits of integrating big data in the process of your materiality assessment, please contact Josée van der Hoek via email@example.com or call her at +31 6 28 02 18 80 and get serious about your materiality matrix.
Experienced strategic issues management specialist with expertise in strategy development, ESG benchmarking, ESG Equity Stories and food. firstname.lastname@example.org
Finch & Beak
+31 6 28 02 18 80