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Foresight of Food Industry Development up to 2030: Challenges and Solutions

  • A. Yu. Prosekov
  • T. F. KiselevaEmail author
Conference paper
Part of the Smart Innovation, Systems and Technologies book series (SIST, volume 139)

Abstract

The future excites many people living on our planet. Some people think of the future as their own achievements and opportunities, while others make plans to develop their business and ensure its viability. But both are United by one thing – they need food every day: in the present time and in the future. This article describes the forecast until 2030 for the development of the food industry. The main parameters of the food industry of the future period are predicted: what will be the sources of raw materials, methods of processing of packaging and storage. New solutions of outdated problems of food production are discussed: resource deficit, genetically modified food sources, food waste, non-decomposing packaging and other challenges of the present time.

The method of foresight is used, when experts in this field of the economy Express their assumptions about which of the emerging trends in the development of the food industry will be fixed, how they are modified, what its traditional parameters will remain in the past.

On the basis of the conducted research it is concluded that the food industry development, the emergence of new resource sources of food protein and food energy, a significant change in the technological apparatus of the food industry of the world economy, a decisive turn to the solution of the problem of food waste and recycling of food packaging.

The reported study was funded by RFBR according to the research project No № 18-07-00275. 2018.

Keywords

Foresight Food of the future Resources Technologies Packaging Storage 

1 Global Market Trends Forecast

The future always excited people. Someone is thinking about the future through the prism of their own capabilities, someone is building plans to provide their business with the necessary parameters for success.

The authors analyzed the material of the FAO forecast report on the world’s agriculture up to 2030–2050 [FAO 2012] and analyze the reported data.

The first conclusion is the well-known fact that the production of cereals in different countries provides its own consumption in different ways: in some countries it corresponds to domestic consumption, in others - only to a small extent, in the third - it substantially exceeds its own needs and provides for the sale of cereals to other regions of the world. The third group includes countries with developed economies. The total production activity of this group of countries at the current time is about 600 kg of cereal per capita per year and the next two to three decades will increase by about 25% and reach a value of 770 kg. At the same time, own needs now amount to approximately 120 kg per capita per year, and in the next two to three decades will reach 125 kg. Obviously, most of the volume of cereal produced in these countries is currently being sold and in the future, the countries of the second group will be sold, for example to countries in the Middle East and North Africa. Currently, the demand for cereals in these countries is 212 kg per capita per year, and only 175 kg is provided at the expense of own production. In the analyzed perspectives, the size of this discrepancy will decrease: with the average per capita requirement of 225 kg per year, 220 kg will be produced.

The total volume of cereals sent in 2030 for sale on the world market in this group of countries is based on our estimates based on the projected annual requirement of 160 kg per capita [FAO 2012] and the expected population of 1362974 thousand people. [UN 2017] will be 879,118 thousand tons. The need of developing countries in cereals by 2030 will be 1158654 thousand tons. The production of cereals in these countries will be 1450510 thousand tons by 2030 [FAO 2012]. There is no deficit in cereals in the world food market now and is not forecasted in 2030 [FAO 2012].

A similar conclusion can be formulated according to the forecast of the world meat market. In general, it coincides with the forecast for the development of the world cereal market for 2030 [FAO 2012]. In general, the development of world agro-industrial production is carried out at a faster pace than the growth of the world’s population [FAO 2012]. This is due to the application of the best agricultural practices, which bring their results with a high degree of efficiency. In the forecast period, the annual period will increase the population of the planet at a rate of 1.1%, while the effectiveness of the best agricultural practices has an annual growth rate of significantly higher 3.45% (weighted average for the main cereals).

The population of the planet will become 8.6 billion people in 2030 and predicted to complete progress in 30 years [FAO 2012]. According to other forecasts, the world population will grow at a decreasing rate and reach 11.2 billion people by 2050, exceeding the FAO forecast by 2 billion people. [UN 2017].

A call from the world food market should not be expected. However, the number of starving people consuming less than the average calorie content of the daily diet (2700 kcal), by the year 2030, are projected to be more than 122.6 million. They live mainly in 27 developing countries with a total population of 18% of the total population of the planet. Note that the population of the planet with a reduced level of caloric content of the daily diet is predicted with a constant decrease, and by 2050, and will practically drop to zero [FAO 2012].

The second conclusion concerns the forecast of the development of the area of the world resource of agricultural lands. The situation with this issue for the period until 2030 is also projected as safe. The increase in the number of land areas suitable for agriculture is also carried out at approximately the same rate as the population of the planet. With a reasonable investment in the development of agricultural lands and the best practices in agricultural production, there is no forecast for the selection of the type of crops and breeds of animals, birds and fish in the world’s food resources until 2030–2050 [FAO 2012].

The third conclusion concerns the level of uncertainty in forecasting the volume of food. This level is predicted to be high. But the main challenges that affect the uncertainty of the forecast period are inconstancy: climate (natural disasters in the form of floods, fires, volcanic eruptions, hurricanes, etc.), world trade (sanctions, embargoes, etc.) and geopolitics (change of political regimes, change territorial integrity, loss of sovereignty of countries and regions, as well as others). Therefore, the two previous conclusions cannot become the basis for strategic planning at the micro level, but are macroeconomic forecasts.

2 Russian Agro-Market Trends

Another part of foresight concerns the development of the food sector of the Russian consumer market. In this part, development forecasts are based on data from Euromonitor International [Euromonitor 2018].

Table 1 summarizes data on sales volumes in the Russian consumer market for basic food products over the past five years.
Table 1.

The volume of sales of non-canned food products for all forms of retail trade channels in the Russian consumer market for the five-year period in natural terms, thousands of tons.

Indicators

2010

2011

2012

2013

2014

2015

Fresh Food

39 657,5

42 634,40

41 829,40

42 714,40

43 079,60

41 175,50

Eggs

1 631,90

1 676,70

1 732,30

1 732,30

1 754,20

1 794,30

Fish and Seafood

2 168,30

2 327,50

2 402,70

2 534,90

2 363,40

2 282,50

Fruits

6 999,50

7 603,20

7 409,20

7 603,00

6 842,40

5 465,50

Meat

5 871,00

6 122,00

6 659,30

7 006,80

7 167,20

7 121,90

Nuts

42,00

44,30

40,70

38,10

31,00

22,00

Pulses

233,30

244,90

250,40

261,50

273,40

262,80

Starchy Roots

10 437,4

11 080,00

10 504,30

10 995,80

11 439,30

11 077,40

Sugar

3 207,80

3 558,00

3 405,40

3 354,60

3 523,00

3 707,20

Vegetables

9 066,40

9 977,90

9 425,20

9 187,30

9 685,50

9 442,00

The annual growth rates of the generalized sales volume of the main food product groups have a wave trend of the fourth-order polynomial function (formula 1):
$$ Y = 0,0083x^{4} - 0,1141x^{3} + 0,544x^{2} - 1,052x + 1,6888 \left( 1 \right); R^{2} = 1,00 $$
(1)

With:

Y- function of the total value of annual sales volumes of non-canned food products in physical terms, thousand tons;

X is the argument of time, years; Xi = 1/n (2010 is set as 1).

The declining functions are registered for 2012 and 2015, the fall index in these periods were 0.98 and 0.96, respectively. In 2015, the decline in sales was registered, practically, for all food groups analyzed with an average value of the index of the chain index of 0.94 (a 6% decrease compared to the previous year). The greatest decline in the function occurred in 2015. During this period, the decline in the volume of sales, for example, fruits, was recorded with an index of 0.8 (20% drop in the value of the function), and potatoes - with an index of 0.97 (3% decline). The explanation of this phenomenon is multifactorial in nature. The most significant factor may have been trade conflicts with traditional suppliers of these groups of food products that took place in this period.

At the same time, the basic analyzed index, in practice, for all analyzed commodity groups in 2015, exceeded the values of similar indicators in physical terms for 2010, an average of 3.8%. The highest excess was noted for meat (121.3%), sugar and sweets (115.6%) and legumes (112.6%), while the decrease in the value of the analyzed indicators was registered for fruits (78.1%). The group of nuts also had a decrease in the chain index (88.7%), but its importance in the structure of nutrition of Russians is scanty (0.05% of total sales in physical terms).

Table 2 shows the calculated indicators of consumption of food products calculated per capita in the same period. In general, the main conclusions on trends noted for commodity groups in terms of the volume of sales, are similarity of the dynamics of changes in the same indicators, calculated in terms of natural consumption per capita. The annual growth rates of the generalized consumption of the main food groups of goods, calculated in per capita terms, also have a wave tendency of the fourth-order polynomial function (formula 2):
Table 2.

Volumes of consumption of non-canned food products for the past 5 years in physical terms Per Capita, kg.

Indicators

2010

2011

2012

2013

2014

2015

Fresh Food

277,60

298,40

292,40

298,00

299,90

286,00

Eggs

11,40

11,70

12,10

12,10

12,20

12,50

Fish and Seafood

15,20

16,30

16,80

17,70

16,50

15,90

Fruits

49,00

53,20

51,80

53,00

47,60

38,00

Meat

41,10

42,90

46,60

48,90

49,90

49,50

Nuts

0,30

0,30

0,30

0,30

0,20

0,20

Pulses

1,60

1,70

1,80

1,80

1,90

1,80

Starchy Roots

73,10

77,60

73,40

76,70

79,60

76,90

Sugar

22,50

24,90

23,80

23,40

24,50

25,70

Vegetables

63,50

69,80

65,90

64,10

67,40

65,60

$$ Y = - 1,0521x^{4} + 14,813x^{3} - 73,608x^{2} + 152,36x + 185,32 \left( 2 \right); R^{2} = 0,97 $$
(2)

With:

Y - function of the total value of annual volumes of consumption of non-canned food products in physical terms per capita, kg;

X is the argument of time, years; Xj = 1/n (2010 is set as 1).

It can be noted that the convergence of the trends identified by the data of Tables 1 and 2 cannot be explained by another phenomenon as a mechanistic recalculation. For this reason, it is inappropriate to give a full analysis of these data.

At the same time, a comparative analysis of the data averaged over the analyzed period, reflected in Table 2, has a practical interest for the purpose of this publication.

From the data given in Table 3 it follows that the data of the British company Euromonitor Int. substantially differs from the data officially published by the Federal Service for Statistics of the Russian Federation.
Table 3.

Volumes of consumption of non-canned food products for the past 5 years in physical terms Per Capita, kg.

Indicators

Recommended norm (Ministry of Health of the Russian Federation), kg

Average annual consumption, kg

Level of compliance, %

Euromonitor Int.

FedStat RF

Euromonitor Int.

FedStat RF

Eggs

10,9

12,00

11,3

109,90

103,48

Fish and Seafood

22,0

16,40

22,5

74,55

102,27

Fruits

100,0

48,77

64,0

48,77

64,00

Meat

73,0

46,48

74,0

63,68

101,37

Starchy Roots

90,0

76,22

111,0

84,69

123,33

Sugar

24,0

24,13

40,0

100,56

166,67

Vegetables

140,0

66,05

111,0

47,18

79,29

According to data provided by Euromonitor Int., only for two commodity groups (eggs and sugar) Russians consume according to the specified consumption standards. According to the data published by the official statistics of the Russian Federation, on the contrary, only two product groups (fruits and vegetables) do not have such a correspondence.

The most significant discrepancy is noted for the values of per capita consumption of vegetables (–68%), and the lowest - for consumption of eggs (6). The average data inconsistency is 51%. Note that all data published by Euromonitor Int., below the analogous data published by Fedstat RF. These inconsistencies we are inclined to explain by the discrepancy of the methodologies for data collection.

We tend not to dramatize the situation analyzed and recognize what is visible from within our country: soon, the average per capita consumption of fruits and vegetables by the Russians (not counting potatoes) should be increased in all possible ways, and, on the contrary, it should avoid excessive consumption of sugar and potatoes.

Using the econometric model (formula 1) calculated based on Euromonitor Int. data, it is possible to form the volume and structure of consumption by the Russians of basic food products (excluding bakery and dairy products) until 2020. The results are shown in Table 4.
Table 4.

Projected sales volumes of non-canned food products for all forms of retail trade channels in the Russian consumer market over the past 5 years in physical terms, thousands of tons.

Indicators

2018

2019

2020

Fresh Food

42115,70

42996,40

43951,50

Eggs

1850,50

1870,80

1889,50

Fish and Seafood

2366,20

2444,30

2531,10

Fruits

5691,00

6024,40

6422,30

Meat

7621,20

7826,60

8024,90

Nuts

22,10

24,30

26,60

Pulses

269,30

275,20

279,40

Starchy Roots

11112,60

11141,50

11160,20

Sugar

3733,20

3774,20

3819,50

Vegetables

9449,60

9615,10

9798,00

The growth in sales of basic food products, excluding sugar, nuts and potatoes, is projected an average of 6.7% compared to the base period (2010). The maximum growth in sales is forecast for fruits - 117.5%, the minimum - for vegetables (103.8%). Similar results are predicted for per capita consumption using formula 2. As noted earlier, data on average per capita consumption of basic foodstuffs provided by Euromonitor Int., are a mechanistic calculation.

Based on data provided by the official statistics of the Russian Federation, the maximum increase in sales to foodstuffs for Russians should be given priority, to a large extent, to fruits and vegetables. Regarding other groups of food products analyzed, it is advisable to keep the achieved annual average growth rate, and lower for potatoes and sugar.

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Authors and Affiliations

  1. 1.Kemerovo State UniversityKemerovoRussia

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