Footprint Forum: Water – Why Worry?

The news parts of England were in drought conditions set the scene for an inspirational Footprint Forum on water. The challenges we face are here and now, as David Burrows reports.

 

We hadn’t planned it – honest. The morning of the Footprint Forum on water, the Environment Secretary announced that parts East Anglia are now officially “in drought” while other areas in England and Wales were “giving cause for concern”. She therefore called a second drought summit in less than a month to discuss contingency plans.

 

The news had the head of the National Farmers Union (NFU) doing the rounds at London’s media studios pleading with the Government “not to turn the taps off”. Speaking to BBC Radio 4’s Today programme, ahead of the talks, Peter Kendall said: "Let’s make sure we make food production a priority. That we talk to farmers in advance [and] we don’t just turn the taps right off. That we allow farmers to eke out supplies.”

 

While the news sparked a flood of media activity, water has been climbing steadily up the corporate environmental agenda for some time. However, unless you are a grower in Southern Spain or a farmer in India (where the gap between water supply and demand is as much as 50%), you could argue that you haven’t really felt the impact.

 

Well, following the Government’s official drought announcement, it appears not. Growers in southern England are already predicting wheat crops will be down 15% while hundreds of producers are on standby as the Environment Agency looks to turn the taps off in certain areas (it’s already asked nearly 100 farmers to comply with conditions stated on their abstraction licences and to stop abstracting water).

 

Water is the single biggest limiting factor in food production. Problems in production spell problems in supply. And this is where it gets complicated – especially for foodservice. What will happen to the supply of chef’s precious ingredients? Where will suppliers look to make up the shortfall in satisfying the order book? How far will costs rise before food producers are restricted in what they can offer? What reactions will the investment community have when growth slows? What will be the impact on the communities that run dry one, two, maybe three years in a row? What’s our responsibility to ensure they survive?

 

These were all questions buzzing around the auditorium at Unilever House in London on June 10 at the latest Footprint Forum.

 

Discussion panel
Water has long been undervalued but it’s a finite resource. The forecasts for water availability going forward have prompted some to propose water markets to manage the resource. Does this idea have potential?

 

“The Government is keen to introduce some kind of water trading system, but farmers and growers could be outbid [for supplies]. We need to remember that food security is a priority,” argued Laura Drew, NFU national horticultural advisor.  Others suggested that any such system is a “long way off”, but there was a feeling that government intervention may well be necessary. Of course, any intervention would involve a value being placed on water. How to calculate that is anyone’s guess but the Water White Paper expected this autumn may deliver some clues. “We are playing catch-up,” explained Stuart Ballinger, a water specialist with AEA. “The White Paper will be interesting. At the moment the only trading going on is in small, localised places, for example between businesses.”

 

As pressure on the resource mounts, however, there could be increasing interest. This could leave some businesses in a very good place, and others struggling, according  to Greenvale group technical manager, James Lee. “As soon as you come up with a value for water, some supply chains will become totally unsustainable while others may be more sustainable. Water has a massive value for some chains but not others.”

 

One step back from a water market is the idea of creating a water footprint label. The idea is that this would raise awareness among consumers and encourage businesses to reduce their footprints. But can it work? No. “It’s a good tool to help businesses understand where their water risks are, but water is a very local issue – it’s not like carbon. Water isn’t about the volume but where it is sourced. It’s too complicated to interpret it [through a label],” argued WWF senior policy advisor, Conor Linstead. Unilever’s LLorenc Mila i Canals agreed. “We’re using it as a tool, but communicating that to our customers as a label doesn’t really help.” As did the NFU’s Drew. “Consumers are quite trusting of retailers, so bombarding them with more labels could be counter-productive.”

 

So, if not through a label, how can awareness of the issues be raised? And who should take responsibility for that? “Consumers didn’t ask for deforestation. They didn’t ask for energy-inefficient products. And they didn’t ask for water-intensive systems. Therefore it’s up to business and government to get us out of this.” That was one view from the floor.

 

The Forum provided a snapshot of just how some the leading businesses were looking to ‘get us out of this’ (see below), but while there was a feeling of responsibility to deal with water issues – and a commercial necessity to do so – it is possible that the sector could only go so far on its own. The Government’s affection for ‘nudge’ tactics and voluntary initiatives may not be enough.

 

James Stacey, a partner with Earth Capital Partners summed it up when he said: “Water is a public good, but while there is no question businesses can do more, whether they can do enough without regulatory interference is questionable. Eventually they will hit a ceiling, beyond which they could be at a commercial disadvantage.”  As such, the sector needed to get better at lobbying for change – after all, legislation can create a level playing field. The NFU’s Drew also highlighted some “blockages” in the current legislation that was, for instance, preventing farmers from storing as much water.

 

The issues are here and now

WWF has said that interest in water issues has gone “off the scale” recently. Indeed, the big companies have all gone on record declaring the challenges the food industry faces if finite resources are not used more efficiently. The Footprint Forum gave some of them an opportunity to tell us what they’re up to.

 

According to the International Federation of Agricultural Producers (IFAP) the world’s agricultural systems will need to feed and create livelihoods for another 2.7 billion people by 2050, and yet “will receive a declining share of the available freshwater supplies”. Already there is conflict between supply and demand.

 

“These are issues we are facing now,” said Inder Poonaji, corporate head of safety, health and environment sustainability at Nestle. “If you haven’t got a policy on water, then I urge you to have one.”

 

Nestle, of course, is one of a number of the world’s biggest food companies that has a vested interest in water supplies. Unilever is another, with the company having footprinted 1,600 of its products – a process which has proved to be “a fabulous resource for R&D and spotting new opportunities”. Nevertheless, Llorenc Mila i Canals from Unilever’s safety and environmental assurance centre admitted that the company “hasn’t solved everything”. About half of Unilever’s water footprint comes from growing raw materials, so the challenge extends far down the supply chain. Engagement with suppliers is key, he explained. “If you work closely with your suppliers then you can start demonstrating why this is good for them.”

 

This is easier said than done. In foodservice, companies are getting to grips with the water they use. The Compass Group, for instance, has set itself a target to track and measure annual office water consumption. Starbucks, meanwhile, has changed how it cleans products after being bullied by the press for leaving taps permanently running in a ‘dipper well’. However, as the NFU pointed out, it’s the taps at field level that require more urgent attention.

 

That’s fair enough if a company has the budget and reach of a Unilever, but what about the smaller players? We all have a part to play in making the best efficient use of the water we have and even small changes can make a big difference to the overall picture. For instance, a business that hasn’t yet taken any action on water can save around 30% on usage through low or no-cost initiatives. Nestle’s Poonaji told of the £150 quick fix identified during a staff survey that now saves the company £50,000 a year. There are plenty of online resources that businesses can use – the Waste and Resources Action Programme is a good place to start. The Food and Drink Federation also has its ‘Federation House Commitment’, the goal of which is to cut industry-wise water use by 20% against a 2007 baseline. Food experts IGD also have a water working group.

 

Some companies are investing heavily in changes already to ensure they are ahead of the curve. Greenvale, for example, explained how it has ploughed a little over £1m into a new “cascade” system for washing the 5,500 tonnes of potatoes the company washes and prepares every week. “The payback will be about three years,” said group technical manager, James Lee, citing water and energy savings of 75% and 35% respectively. The system is truly innovative, and there is doubtless a need for more companies to put their money where their mouth is.

 

That Greenvale, Unilever, Nestle and the like are diverting resources to addressing water use is great news. It will also focus the minds of those supplying them. However, this is a disparate sector filled with hundreds of small companies that are fighting to make a living, let alone invest in water footprinting a tomato or spend time working with suppliers. Hopefully, a thirst for knowledge by the few, as well as some support, will be enough to pull along the many.

 

Final thought

Our trawl through the foodservice companies’ sustainability reports for our special feature on water in the last issue showed a willingness to commit to improvements, but perhaps a lack of understanding in terms of the bigger picture. This Forum was a valuable starting point. Not only is water an issue for now, it’s an issue that will provide more challenges than carbon: it’s trickier to measure; issues are localised; and while there are cost savings, water is currently undervalued.

 

Many solutions will require work up and down the supply chains, something the foodservice sector needs to grapple with. One company admitted that they were only just getting to grips with supplier issues, and until recently water wasn’t an issue they really knew much about. The NFU has urged the supply chain to maintain “close contact” with growers so gaps in supply can be identified quickly. This  contact will need to continue – drought or no drought.

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