Author: Dr. Jean-Paul Rodrigue

Food systems are a sequence of processes to fulfill the demand for food, from farming, processing, and distributing to final use. Global freight distribution systems have enabled a broader scale and scope for commercializing agricultural goods.

1. Food Systems

Historically, food production was the dominant focus of human activities, with most of the time and labor assigned to growing, harvesting, processing, and preparing food. Agriculture would account for 80 to 90% of the gross domestic product of a pre-industrial society. Such activity was dominantly for subsistence and local in scale. It was rare that food was produced for trade, with notable exceptions when a political entity such as an empire was able to build communication infrastructures, including roads, canals, and shipping lanes, and ensure the security of strategic trade flows.

Food was a small composition of trade, and what was traded over long distances tended to be of high value and not easily perishable. Historical trades such as spices, salt, wine, and olive oil were salient examples of goods that could be transported over long distances. It was not until the Industrial Revolution that substantial transformations took place in food production, processing, and distribution, allowing for productivity gains, specialization, and commercialization in agriculture. The outcome was a sharp increase in food production concomitantly with a decline in the share of the population in agriculture. This share is quickly declining worldwide, and in most advanced economies, less than 5% of the population is still involved in agriculture.

The concept of food systems has been introduced to deal with the contemporary complexity of food production.

A food system is a sequence of processes and the supporting infrastructure involving the growing, harvesting, storing, processing, packaging, transporting, warehousing, distribution, consumption and disposal of food. It considers a wide variety of tasks from the inputs of agriculture to the final demand, including technological, environmental, economic, political and social factors.

A food system can be articulated as a supply chain that reveals much about the global structure of production and consumption, particularly the actors involved. Understanding the significance of food supply chains requires a comprehensive approach since they include much more than a simple transport consideration; an array of coordinated activities are involved.

Food systems are dealing with the biophysical reality of the world, implying a geographical disparity in terms of growing period and the associated suitability for different forms of crops and agricultural systems. The most prevalent agricultural models include:

• Subsistence farming. Characterizes most of the practiced agriculture throughout human history where food was local in scale and output, mainly grown to support families, tribes, and communities. A variety of plants and animals were cultivated, adapting to and taking advantage of local climate and soil conditions. Surpluses were sold on local markets, often to pay taxes and buy simple goods. Although subsistence farming is based on extensive knowledge and know-how accumulated through long phases of trial and error, it requires limited levels of technology and capital investment by contemporary standards.
• Commercial farming. Like subsistence farming, it is mainly owned by a small group, such as a family or collective. However, the significant difference is that the food output is mainly grown to be sold on national markets, some of which will be exported. Commercial agriculture needs to be competitive and relies on the specialization of crops to achieve economies of scale, implying a higher dependence on technology (farming equipment, seeds, fertilizers) and capital investments. The specialization of commercial agriculture reveals a high level of diversity with the development of expertise in niches such as fruits, olives, poultry, and winemaking. It usually relies on a temporary workforce hired during peak season (harvest).
• Corporate farming. Owned by corporate entities with a vast portfolio of farms and related activities, some of which are multinationals. The food is grown for global markets, but in many cases, the markets are regional due to regulations or preferences. Commercial farms can act as subcontractors for corporate farming. Food multinationals emphasize product development, branding, and marketing. Several have a long-standing specialization in cash crops (coffee, bananas, cacao, sugar, etc.) through a network of plantations. They can control specific elements of the supply chain (seeds, processing), enabling them to capture value. Such activities require high levels of technology and capital investments.

The move from subsistence agriculture towards commercial and corporate agriculture has involved multiple benefits, such as more stable food supply systems, but required the setting of distribution systems vulnerable to disruptions. The main characteristics of contemporary agriculture involve the following:

• Large surfaces of land have been modified to suit agriculture, but land conversion for agricultural purposes appears to have leveled. About 37% of the world’s land surface is allocated to agriculture, which includes 68% for pastures and 32% for cropland.
• Food has become a commodity traded on markets and subject to important commercial interests in terms of ownership of the modes of production and distribution. The price of food varies according to market forces and external events. Over time, the relative price of food has declined, making it increasingly affordable. About 10% of the value of global trade concerns agricultural goods.
• Mechanization and capital intensiveness are prevalent with a growing reliance on farm equipment, genetically engineered seeds, fertilizers, and pesticides.

2. Food Distribution Systems

The quantity, quality, and safety of food are often taken for granted, but these important attributes rely on the efficiency of food distribution systems. In the 20th century, food systems that were regional and national in scale and scope have evolved to include an increasingly global dimension. This was particularly the case in the second part of the 20th century, with massive investments in transport infrastructure and technological developments such as refrigeration, containerization, and air transport. The current context is particularly prone to the setting of food distribution systems:

• Global urbanization. Results in the setting of large urban agglomerations where the regional agricultural system cannot provide enough food to supply the demand. As an economy becomes increasingly urbanized, it must rely on food distribution systems beyond its region.
• Regional specialization. Allows for improved agricultural productivity by focusing on specific agricultural outputs. This is generally the outcome of agricultural systems trying to take advantage of regional climatic and soil conditions to maximize outputs.
• Seasonality. Substantial temporal variations in the production and availability of food products. Long-distance food distribution systems enable to establish a constant supply between regions of the world within different stages of their harvesting cycles. The production of the northern and the southern hemispheres is better synchronized. This is particularly the case for the southern hemisphere, where areas are producing goods to compensate for seasonal shortages in the northern hemisphere.

Seasonality combined with regional specialization thus incites a latent demand for food distribution between regions of the world at a massive scale. Irrespective of the context, the average distance at which food products are being carried is increasing. The term food mile has been brought forward as a concept to articulate the weight-distance ratio factor in food distribution. The higher it is, the more energy needs to be spent to maintain food supplies. However, due to improvements in transportation technology and constantly shifting sourcing strategies taking advantage of seasonality and price changes, food miles are complex to assess and do not necessarily reflect inefficiencies in food distribution.

In the earlier stages of distribution, many food products, such as grains, are moved in a massified form with infrastructures such as grain elevators and bulk carriers such as rail and ships. Once bulk food arrives near major markets, it is often processed into primary (transforming an agricultural product into food) and secondary food items. These outputs are purchased by actors involved in the later stages of food distribution:

• Wholesalers. Many individual food sellers and purchasers do not have the opportunity to negotiate directly with their counterparts because of the time, effort, and complexity transactions entail. The volume and diversity of the required supplies may also vary. Wholesalers are large intermediaries in the food distribution system, allowing them to reconcile the supply and demand in terms of volume, quantity, geography (markets), and time. Warehouses are used to store purchased food items made available on the market. Wholesalers can specialize in food products, such as seafood, produce, or fruits.
• Grocers. Since they are involved in selling food directly to final consumers, grocers maintain an extensive food distribution network from distribution centers to individual outlets. Several large-scale grocers act as wholesalers for themselves as they purchase food in large quantities and can be involved in manufacturing their food (store brands). Smaller grocers usually purchase their supplies from wholesalers. An important trend is that several retailers are becoming grocers since it allows them to expand their customer base in a highly competitive retail environment.
• Restaurants. Restaurant chains are large buyers of food items from wholesalers and have built an extensive distribution network. The fast-food industry is particularly active in setting food distribution systems where the restaurant is the last assembly stage along the supply chain. An emerging trend concerns the home deliveries of prepared or ready-to-cook food, which requires a command of logistics, particularly the cold chain.

Inefficient food supply chains generate a larger amount of waste in terms of food that is lost during harvesting, storage, transportation, preparation, distribution, and consumption. Food losses are the highest for fruits and vegetables, where, on average, 50 to 60% of all the production is lost along the supply chain, implying that only 40 to 50% of what is being harvested ends up consumed. These figures are around 40% for cereals, 25% for meats, and 40% for seafood. Consequently, several aspects of food distribution systems can be improved, particularly at the processing, distribution, and consumption levels. One of the core aspects of these improvements relies on cold chain logistics.

3. Cold Chain Food Systems

Any major grocery store will likely carry tangerines from South Africa, apples from New Zealand, bananas from Costa Rica, and asparagus from Mexico. Thus, a cold chain industry has emerged to service these food commodity chains. Before the development of the cold chain, fresh food products were locally or regionally produced. The application level of cold chain technology varies substantially according to the level of development. The cold chains handle about 70% of all the food consumed in the United States. For China, less than 25% of the meat and about 5% of the fruits and vegetables are, but this share is rapidly climbing. The United States imports about 30% of all its fruits and vegetables, and 20% of its food exports can be considered perishables. The cold chain serves to keep food fresh for extended periods and eliminate doubts over the quality of the food products. Still, about 25% of all food products transported in the cold chain are wasted each year due to breaches in integrity, leading to fluctuations in temperature and product degradation.

There are a variety of methods for transporting food products. The banana accounts for the world’s most significant commodity transported in the food cold chain, with 20% of all seaborne reefers trade. Land, sea, and air modes have different operations for keeping food fresh throughout the transport chain. Depending on their speed, different modes will service different cold chain markets with a clear segmentation between air and maritime services. Innovations in packaging, fruit and vegetable coatings, bioengineering (controlled ripening), and other techniques reducing the deterioration of food products have helped shippers extend the reach of perishable products. For food products such as fruits and vegetables, the time after they were harvested directly impacts their shelf life and, therefore, the potential revenue a consignment may generate. A standard truckload of strawberries has a market value of $50,000, while the same load in blueberries can reach $100,000. Concomitantly, new transport technologies have permitted the shipment of perishable products over longer distances. For instance, improved roads and intermodal connections along the African coast reduced food transport time to European markets from 10 days to 4 days.

Moving away from ice refrigeration has allowed for much greater distances to be traveled and has greatly increased the size of the global food market, enabling many developing countries to capture new opportunities. Another efficient mode for transporting foodstuffs is air travel. While this is a preferred form of travel for highly perishable and valuable goods due to its ability to move much faster over longer distances, it lacks the environmental control and ease of transfer that ground and sea transport provide. Also, during the flight, the cargo is stored in a 15°C – 20°C environment, but close to 80% of the time, the package is exposed to exterior weather while waiting to be loaded onto the plane or being moved to and from the airfield. This is troubling, considering the value of the food and the importance placed on quality and freshness. In order for this form of food transport to experience growth among market users, more uncompromising strategies and regulations will have to be embraced and enacted.

Food transportation is an industry that has fully adapted to the cold chain and can, despite the problems with air transport, be considered the most resilient, particularly since a large majority of food products have a better tolerance to temporary variations of transport temperatures. The cold chain distribution center represents one of the most efficient links in cold chain logistics by providing facilities where a vast amount of perishable food products can be received from a large number of suppliers, stored, sorted, and assembled into loads bound for respective grocery stores. These facilities usually have several storage areas with different temperature settings to handle regular grocery goods at ambient temperature, such as produce, dairy, meat, and frozen products. As a result, small errors can be compounded without the concern of irreversible damage. Yet, there is a limit to this compounding. For instance, in the transportation of produce, for every hour of delay in the pre-cooling of shipments, an equivalent one-day loss of shelf life must be accounted for.

The usage of refrigerated containers has particularly helped since they account for more than 50% of all the refrigerated cargo transported in the world. Source loading can be an important factor in extending the shelf life of a cold chain product since it is loaded in a reefer directly at the place of production without additional handling and risks for further breaches in the chain of integrity. For instance, source loading into a reefer can expand the shelf life of chilled meat by about 25 days (from 30-35 days to 55-60 days) from conventional methods and thus considerably expand the market potential of the product.

The efficiency and reliability of temperature-controlled transportation have reached a point that allows the food industry to take advantage of global seasonable variations, meaning that during the winter, the southern hemisphere can export perishable goods to the northern hemisphere while an opposite trade, generally of smaller scale, takes place during the summer. Countries such as Chile have substantially benefited from this and have developed an active agricultural and food transformation industry, mainly servicing the North American market during the winter but also with several niche markets such as wine. A similar issue concerns some African countries, such as Kenya, that have developed fresh produce and flower industries catering to the European market.

The fast-food industry is also an active user of cold chain logistics as every outlet can be considered as a factory, with dozens of workers with schedules and shifts, inventory management, and the supply chain of components (many of which are temperature sensitive), and which are assembly lines producing quality-controlled and high-volume products. Cold chain management is also linked to product quality and competitiveness. For instance, the global fast-food chain McDonald’s switched from frozen to fresh beef patties for its core burger products, a strategy that could not be effective without cold chain logistics.

4. Emerging Vulnerabilities in Food Systems

A regional dairy industry could be disrupted by a lack of paperboard.

Disruptions in food systems and the associated shortages and famines are increasingly uncommon to the point that they have almost disappeared. However, as the above statement underlines, food systems are complex, and the lack of an ancillary element such as paperboard could be a source of vulnerability. How could milk and butter be distributed to markets if their containers are not available? Global food systems have developed a resilience that is based on three major characteristics:

• A complex geography of agriculture that produces a variety of food products across a multitude of regions and seasons. Pastures remain the agricultural activity having the largest footprint with about 68% of the world’s agricultural land. There are still opportunities to expand agricultural land, but these areas are mainly found in Latin America and Sub-Saharan Africa. Only large-scale natural or anthropogenic events can have a notable impact on the global availability of food.
• Storage and distribution capabilities to move agricultural goods and food from surplus to demand areas are extensive. Outside international food aid, there are market mechanisms that create incentives to distribute food. A shortage in an area is associated with a price increase that incites an increase in food supply and redistribution from low-cost areas (surplus) to high-cost areas (shortage).
• Diet substitution where a population can temporarily switch to alternative food sources in case of scarcity in usual food sources. Thus, a diet based on rice can be substituted for other grains if required. Further, through globalization, diets have become more homogeneous, implying more opportunities for economies of scale in the food supply.

Each of these resilience factors needs to be carefully considered when evaluating the vulnerability of global food systems. Yet, these vulnerabilities cannot be dismissed since food production and distribution are complex systems with the risk of cascading effects in case of disruptions. The main risks and vulnerabilities to food systems include:

• Biological risks. A focus on a limited high-yield plant and animal species has allowed an increase in productivity. About 93% of the vegetable varieties have gone extinct because their cultivation was abandoned for species that were judged more suitable for human consumption. However, this induced productivity comes with higher risks related to disease, pests, and pathogens. Food systems should maintain a level of biological diversity to limit the risks of a large-scale shortage if a disease was to impact a plant or an animal species.
• Natural risks. Agriculture accounts for about 70% of all freshwater anthropogenic use and is therefore highly vulnerable to changes in water cycles. The conventional risks of floods, storms, and droughts are likely to be exacerbated by climate change, which may involve a shift in the forms of cultivation and agricultural ranges. Food systems should show greater resilience to natural risks through improvements in plant resistance, irrigation techniques, and sustainable use of vast pastures.
• Technological risks. Food systems depend on a wide range of infrastructure and equipment. Information and communication technologies have also become more prevalent, namely in terms of weather information and market prices. Infrastructure failures remain a risk, particularly if they involve the storage and distribution of food. From ports to distribution centers, food distribution infrastructures are considered strategic assets.
• Political risks. Food systems are vulnerable to a wide range of political risks, including conflicts, corruption, theft, and trade restrictions. All these factors increase the unreliability of food systems since mechanisms such as stable prices, safety, and security of distribution and the capability to predict supply (food output) accurately and demand are severely disrupted. Food systems require mechanisms able to mitigate political disruptions.
• Economic risks. Food systems are substantially impacted by economic risks, such as supply and demand shocks caused by price fluctuations. Price volatility for basic food items is often a factor of social unrest when food is available but at a price not affordable for a large share of the population. The combination of price volatility and unaffordable food is considered a market failure. Inversely, price controls can lead to food shortages since market prices could be lower than the cost of production and distribution. Food systems must have suitable pricing mechanisms that ensure profitability for the suppliers of food and agricultural inputs, affordability for the consumers, and the capability to handle disruptions.

Food systems remain one of the core foundations of human activities. Evidence underlines that food production has been able to keep up with the substantial growth in demand over the last century. The current context is subject to additional risks, some of which have been enduring throughout human history, while others are brought forward by contemporary technological, economic, political, demographic, and environmental changes.

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Related Topics

• B.9 – The Cold Chain and its Logistics
• 7.4 – Logistics and Freight Distribution

Bibliography

• Dani, S. (2021) Food Supply Chain Management and Logistics: Understanding the Challenges of Production, Operation and Sustainability in the Food Industry, London: Kogan Page.
• Tallec, F. and L. Bockel (2005) Commodity Chain Analysis: Constructing the Commodity Chain Functional Analysis and Flow Charts, Food and Agriculture Organization of the United Nations.
• Thompson, J.F., P.E. Brecht, T. Hinsch, and A.A. Kader (2000) Marine container transport of chilled perishable produce, University of California, Division of Agriculture and Natural Resources, Publication 21595.