What’s on the menu for 2022?

From delivering net-zero pledges to acting on diversity, foodservice and hospitality businesses will have plenty to keep them occupied following the festive period, says Nick Hughes.

You could say 2021 has been a play in three parts for the foodservice and hospitality sector. Act one began in January with the bitter pill of yet another national coronavirus lockdown before the reopening of society in the late spring saw businesses start to claw back some of the sales lost during those dark winter months. That momentum continued to build throughout the summer and into early autumn, but in recent weeks the spectre of covid-19 restrictions has loomed ever larger. The recent emergence of the Omicron variant has put the sector back on high alert amid some ambiguous political messaging which has led to a rush of cancelled bookings but no actual government decree for people to stay away from venues. A festive period that should have been an opportunity to get tills ringing risks becoming another brutal nail in the coffin of businesses now starved of government financial support and facing the prospect of paying back debts in the new year.

In this context it’s to the huge credit of businesses that they’ve continued to engage with the sustainability agenda throughout 2021. But what lies in store for 2022?

Net-zero now….and in the future. Beyond the day-to-day task of remodelling business strategies in the era of coronavirus, 2021 will be remembered as the year companies committed to the transformative task of becoming net-zero entities.

Making a public declaration to become net-zero is the easy part; delivering against that commitment is where the hard work will begin in the new year, a point repeatedly hammered home in Footprint’s new Net-zero: time for hospitality to step up report.

As we enter 2022, those large foodservice and hospitality businesses that have failed to make a net-zero commitment will soon become the exceptions, but that doesn’t mean others should rest on their laurels. The focus of campaigners, and policy makers, is quickly shifting to the question of how net-zero plans will be delivered.

Most businesses have yet to publish a credible transition plan complete with milestone targets and detailed policies to achieve them. The largest businesses will soon be expected to do so under proposals set out by the Treasury.  Environmental groups, meanwhile, will be keeping a close eye on the extent to which plans commit businesses to a genuine decarbonisation of their operations and supply chains, or are otherwise heavily reliant on offsetting – a contentious practice that will be subject to greater scrutiny in the months ahead.

Net-zero musn’t create sustainability blind spots. As welcome as it is that tackling the climate crisis has become a central plank of business strategies, this musn’t be the expense of action on other environmental issues. Net-zero pledges can deliver many ‘win-win’ scenarios for the environment, by reducing food waste and packaging for example, but they can also create trade-offs. Caterers switching to lower-carbon animal proteins like chicken and pork, for instance, can inadvertently outsource their environmental impact overseas when vital ecosystems are converted to cropland for animal feed production.

One consequence is that businesses are already looking at developing non-carbon related environmental indicators and targets. Compass, for example, has committed to work with the SBTi (science-based targets initiative) on developing targets for indicators like biodiversity. Businesses are also being urged to do more on water security under a new roadmap developed by Wrap. This more holistic approach to environmental impact is set to be a growing feature of sustainability activity throughout 2022 and beyond.

Data transparency will leave no place to hide. One area in which foodservice has historically lagged behind food manufacturing and retail concerns data transparency. Inadequate data has to-date prevented any meaningful reporting of sector progress against sugar reformulation targets, while data on food waste is another example of where the sector is well behind the curve – Baxter Storey currently stands alone among the 29 hospitality businesses signed up to Wrap’s Coutauld Commitment 2030 in publicly reporting its levels of waste.

With data transparency expected to become a policy focus for the government in 2022, businesses may no longer be able avoid scrutiny. The Grocer recently revealed the government plans to consult on mandatory food waste reporting when its white paper response to Henry Dimbleby’s national food strategy for England is published in the new year.

Diets still a policy blind spot. Whether the government will be quite so willing to adopt Dimbleby’s other measures remains to be seen. The Leon co-founder wants to see a statutory duty for food companies with more than 250 employees to publish an annual report showing the breakdown of different foods they sell based on characteristics such as protein type and health profile. He also called on the government and businesses to nudge people towards eating 30% less meat by 2032 through product reformulation and serving more plant-based alternatives. The government has previously been steadfast in its refusal to influence dietary choice. We won’t have to wait long to see whether such intransigence persists into 2022 – the white paper is due sometime in January.

Diversity policies will come under the spotlight. Another area where pressure for greater transparency is being exerted is over ethnic diversity and inclusion. The disparity in pay and prospects faced by those from Black, Asian and Minority Ethnic backgrounds rose up the public and corporate agenda in 2020 following the murder of George Floyd and the subsequent Black Lives Matter protests, and is set to become an even greater CSR focus in 2022.

Businesses in all sectors have been stung into action, albeit there remains a sense that many are still grappling with how best to initiate the deep, structural changes needed to eradicate racial bias within their organisation. Experts believe that generating baseline data on pay and senior level representation is a critical starting point for improving diversity and inclusion. In June, Sodexo became the first company in the hospitality sector to voluntarily publish its ethnicity pay gap. More and more companies in other industry sectors are doing likewise.

Ethnicity pay gap reporting is not yet mandatory as it is for gender, but it has been under government consideration for several years and campaigners believe it’s a matter of when not if a statutory requirement is introduced. Once again, businesses would be well advised to start getting ahead of the curve.

Challenges are many and varied. This is just a small sample of some of the issues foodservice and hospitality businesses must grapple with in the new year. There are many others besides. The packaging agenda, for one, is not going away amid underwhelming progress against voluntary plastic reduction initiatives. In January, or more likely February, the government is due to provide further detail on policies such as extended producer responsibility and deposit return schemes.

As reported last week, the labelling landscape is similarly in a constant state of flux.

It would be remiss as well not to mention the ongoing impact of Brexit. The supply chain issues experienced in 2021 may prove to be a mere amuse-bouche ahead of the challenges expected when the UK brings in full controls on EU food and drink imports in 2022. Full customs declarations and controls will be introduced on January 1st with physical and identity checks on products of animal origin beginning on July 1st. One port official recently confided that border readiness of systems and staffing is in “limbo” as their team awaits further government guidance. Any business reliant on cross-border trade for food supplies (which is essentially every business) would do well to prepare for disruption.

Meanwhile a shortage of labour across the entire food supply chain, which is driving up wages of workers including chefs and waiting staff, is unlikely to be solved by short-term piecemeal interventions like temporary work visas. All of this puts pressure on the bottom line and poses difficult questions around the need to push through price increases and the commercial viability of certain contracts.

Hope springs eternal. Yet for all its challenges, the foodservice sector has already proved its ability to adapt to an existential crisis in the shape of coronavirus. New service models will continue to emerge as will industry disrupters. If businesses can respond to changing social trends while embedding sustainability within the foundations of their business model, there is no reason they won’t continue to thrive in 2022 and beyond.

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