Organic Foods And Beverages Industry ESG Thematic Report, 2023

Environmental, Social, and Governance (ESG) in the Organic Foods And Beverages Industry

A whole new era of changes in sustainability are driven by forces of change by the governments, corporations, and consumers in terms of environmental, social and governance.

Leading companies in the organic foods and beverages industry are playing a crucial role in creating a positive impact on human health at a societal level. The industry offers different types of products ranging from fruits and vegetables to snacks and beverages, that are beneficial to health, unlike conventional snack markets that are adversely impactful to health. The manufacturing of the products in the industry are usually done through organic farming, which is environmentally friendly in a manner. Hence, the market creates a significant positive ESG impact on the planet.

The impact of conservative farming, which has exploited natural resources such as soil and water, also increased the carbon footprint on the planet, have created awareness amongst the producers as well as the consumers to purchase organic foods and beverages market products.

ESG Trends

One of the important aspects pertaining to ESG in the industry is that the products coming from conservative farming are exposed to pesticides and chemicals, which creates a negative impact on human health. This has a negative impact on the social aspect of ESG to which the products in the industry can provide a solution. Natural resource deprivation and pollution caused due to conventional food and beverages has led to interest and development of the organic foods and beverages industry. The awareness amongst the consumer’s regarding health is a major factor that adds value to the social aspect of ESG in this market.

From a social aspect of sustainability, organic products improve health and safety of a community by being highly rich in antioxidants compared to conventional snack market products. Products in market have lesser pesticides and cadmium levels compared to that of conventional foods. Further, organic meat has higher levels of omega 3 fatty acids and can also cure certain acute diseases like pre-eclampsia, hypospadias, and obesity.

However, ESG challenges that companies in the organic foods and beverages should be aware of are in terms of the impact that product packaging creates on the environment. Due to the nature of the commercial activity in the industry, transportation and storage activities cannot be avoided, and these produce intense greenhouse gas emissions that leave a significant carbon footprint straining the ecosystem. Further, the activities across the supply chain in this sector gives rise to increased Scope 1 & 2 emissions.

The material used for packaging, which is used to preserve the food and increase its shelf life, consists of plastic, usually the LDPE (low density polyethylene), which is usually non-degradable and fills waste in landfills and causes strain on the environment. Such packaging has a significant negative impact on the environment and prevents companies operating in this sector from achieving the United Nations’ Sustainable Development Goals such as SDG 12: Responsible Production and Consumption.

One of the key players of the market has made initiatives to combat climate change and effectively has reduced scope 1 & 2 emissions. They have also created a water management strategy to efficiently track the sourcing and usage of fresh waters. This creates a significant impact for companies to achieve UN SDG 12. They have also created strategies and made a qualification process to undergo by the suppliers which can improve due diligence.

Growth of the Organic Foods and Beverages Market

The organic foods and beverages market at global scale as of 2021 was valued at USD 188.35 billion and is forecasted to grow with a CAGR (compound annual growth rate) of 13% from 2022 to 2030. Increase in the health awareness amongst the consumers as well as the positive impacts caused by the market products are few driving factors of the market in terms of ESG.

Key Companies in this theme

    • Hain Celestial

    • Whole Foods Market L.P.

    • Dole Food Company, Inc.

    • Dairy Farmers of America, Inc.

    • General Mills Inc.

    • Danone,

    • Gujarat Cooperative Milk Marketing Federation (Amul)

Scope of the Organic Foods and Beverages Industry ESG Thematic Report

    • Macro-economic and ESG-variable analysis of the industry, including regulatory, policy, and innovation landscape

    • Key insights on infrastructure developments and ESG issues affecting the theme

    • Identify key initiatives and challenges within the industry

    • Identify ESG leaders within the industry

    • Understand key initiatives and the impact of companies within the sector to fuel an informed decision-making process

    • Analysis of industry activities based on multi-media sources, including significant controversies and market sentiment

Key aspects of the Organic Foods And Beverages Industry ESG Thematic Report

    • Offers a global perspective of the industry and the policies and measures taken by the players, for overcoming the challenges faced in terms of Environment, Social and Governance.

    • Key insights into the sustainability practices of major players in the market.