Transcript Market and consumer dynamics - Sustain

Rural Products to Urban Markets:
Low Carbon Distribution, Logistics &
Smart Technologies
Low Carbon Distribution &
Logistics
Policy & Market
Trends & Drivers
Traci Lewis, Sustain-Live
www.sustainlive.org
Low Carbon Drivers: Climate Change
• One of the Greatest Threats Facing world
today: 40% more Co2 than before ind.
revolution, highest level seen in 800,000
years. Global average temperatures
continue to rise.
• Climate Change Act 2008 & Carbon
budget framework: legally binding to
reduce the UK’s greenhouse gas
emissions 80% below base year levels by
2050.
• Carbon budgets: legally binding limits on
the amount of emissions that may be
produced, beginning in 2008. 2023–27,
requires emissions to be reduced by 50%
below 1990 levels.
• How? Energy efficiency across all sectors;
oil and gas in cars, replaced by electricity,
sustainable bioenergy, or hydrogen.
Market Trends & Drivers: Policy & Partnership
• Govt: Lack of cohesive policy
• City & Regional: Localism Act
(2010), Local Enterprise
Partnerships (LEPs) (2011), City
Deals (2013), Growth Deals (2015),
• Sustainable Procurement: School
Food Plan (2013), A Plan for Public
Procurement (2014), Hospital Food
Standards Panel
• Local & Community: Transition
Towns, Social Enterprises, New
Economic Foundation (NEF)
Trends & Drivers: Funding
• Short Supply Chain & Innovation
in line with policy goals
• RDPE 2014 – 2020: EAFRD, rural
businesses; farming & forestry
productivity, environment,
economic growth
• Growth Programme (£177m):
Rural businesses: start-ups,
business development, food
processing < 40% of projects bet.
£35K - £155K
• LEADER (£138m): June 2015, via
West England LEP.
Policy Drivers & Trends: Air Pollution
Policy: Action on Air Quality 201415: report House of Commons'
Environmental Audit Committee
(EAC)
Health: 5. 3% UK deaths 2010 due
to long-term exposure to
pollution, road transport is the
main cause of pollution
Pollution: Road transport: 42%
carbon monoxide, 46% nitrogen
oxides; 26% particulate matter
(PM) in England
Low Carbon Emission Zones (LEZ)
• LEZs : Control vehicle emissions, but few UK LA
have introduced them. Based on European
emission standards relating to PM affect on health.
Barriers include their perceived cost and a lack of
guidance and support from Government.
• EAC: Recommends national framework with
common metrics & national vehicle certification
scheme for vehicles, without delay
• London's LEZ: 2008 – charges for vehicles that fail
to meet emissions standards. A more stringent
Ultra Low Emission Zone on a limited number of
routes is set to come into force in 2020.
• Bristol & Exeter City Councils agree with need for a
national LEZ framework. Bristol probably 3-5
years.
Policy Drivers & Trends: Diesel Vehicles
Climate Change: More diesel cars now
on roads - in response to EC CO2
emissions targets of 130g/km by 2015
and 95g/km by 2021 – as they more
fuel-efficient than petrol counterparts
Pollution: Transport for London noted
that diesel vehicles produce 22x
particulate matter (PM), 4x Nitrous
Dioxide (Nox) as petrol vehicles
Future: Government should consider
subsidising diesel vehicle owners to
retrofit their engines or a national diesel
vehicle scrappage scheme. (Re: EAC Air
Policy Report recommendations)
Policy Drivers & Trends: Low Carbon Vehicles
• Future: New technologies eg. electric,
hydrogen fuel-cell or other alternativefuel vehicles
• Market: Currently undeveloped for ‘ultra
low emission vehicles’ (ULEV) - low public
awareness, despite recent sales increase
from low base.
• Grants: Office for Low Emission Vehicles
(OLEV) offering grants towards the
upfront costs of buying electric vehicles
(£200m between 2015 and 2020). Also
developing public awareness and strategy
for a national infrastructure of charging
points.
• Government: Aims for the entire UK car
fleet to have zero exhaust-pipe emission
by 2050.
Energy
• Energy Costs: ¼ UK food & drink
manufacturers planning job cuts /
employment freeze, due to spiralling
energy costs (8 April, nPower survey,
The Grocer)
• Govt. Electricity market reform
companies face recovery action from
heavy energy use from suppliers:
£0.4 MWH up to £10 MWH 2020
• Energy management needs to be a
top business priority
UK Food Transport System
• Food System GHG emissions: 18% of total UK
emissions, 30% if inc. land-use change abroad
• Transport: single largest energy user in the food
system, 3.5% of UK total GHG emissions. Also: HGV
damage to roads & verges, noise and air pollution,
congestion.
• Main UK transport GHG: HGVs (29%), consumer
cars (23%), sea transport (15%), air transport (12%)
& overseas HGVs (12%). A quarter of UK HGV
movements relate to food transport.
• Food air miles: 1992 and 2010, food air miles
increased by 262%, although they have recently
stabilised; customer car travel increased by 31%
and urban kilometres – a measure of congestion –
by 26%.
• Why? Out of town grocery stores, increased
demand for overseas goods and more transport
between businesses as more processing and
packaging of food takes place.
Food miles - Riverford Case Study
• How food travels is as important as
how far it travels
• Every km relative GHG are: 1 deep
sea, 2 short sea, 6.5 HGV, 40 – 100
airfreight (40-50x sea)
• Transport: 21% of their carbon
footprint (15% ship, 6% road)
• Achieved by: no airfreight, ship rather
than road, lorries always full and
backloaded, encourage seasonal
eating, regional UK farms & France.
• Do weekly carbon calculations p/box
to understand use & communicate to
customers.
Market Drivers & Trends: Local & Organic
• Economic: Supports viability of independent
outlets; £132 million turnover p/yr; over 2,600
jobs; 2,000 supply chain businesses, £718 million
turnover a year, employing 34,000 people (Ref.
CPRE Local Food Webs Study)
• Freshness: Local = seasonal
• Energy: should require less energy to produce
• Less Packaging: than food needing protection
during long-distance journeys
• Diversity: Supports farming diverse scale & type;
genetic diversity in traditional & rare breeds;
heirloom & heritage varieties not suited to largescale processing and distribution systems.
• Cultural: Identity, community, celebration
• Food Miles: 34% shoppers see cutting food miles
as a key reason to buy local – make sure it meets
their expectations!
Market & Consumer Trends: Retailers
Changing Habits: Large out of town
supermarkets decrease
Big Supermarkets: Closing stores
and/or reducing floor area
Discounters: Aldi – ‘quality, low
prices’ overtakes Waitrose to
become Britain's sixth largest
supermarket (5.3% market share)
Online & High Street: Increase in
online ordering (growth area) and
use of ‘local’ convenience stores
New Players? Eg. Amazonfresh
Market Drivers & Trends: Food Trends
• Ethical & Organic: Recent Organic report back to pre 2009 levels (Soil Association)
• Diets: Vegetarian, Vegan, gluten-free, Paleo,
Flexatarian, Meat free monday
• Trends: Holistic Wellness (not diet fads),
Transparency (‘Clean is new Green’), High
Protein, Value, Speciality, ‘at-home
gourmand’ (Mintel 2015 trends)
• Allergen Laws: Transparency, ingredients –
opportunity?
• Restaurants: Provenance, unusual products
& varieties, ‘with a story’.
A few conclusions..
• Fuel & Energy costs - current &
future - need to be understood and
managed effectively
• Try to anticipate legislation
changes to ensure no nasty
suprises
• New RDPE could provide
opportunities for investment in
better distribution and logistics
• Day 2: Will explore some of these
here in depth eg. electric vehicles –
any other requests?
Policy & Market Drivers, Trends: SWOT Analysis
How can
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these
trends and
drivers help
your
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remain
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and
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