As climate-related disruptions and geopolitical tensions increasingly affect harvests and ingredient availability, sustainability efforts are no longer a “nice to have,” but a business case to future-proof supply chains, according to speakers during a Climate Week panel discussion in New York City Sept 21.
“We have seen a big shift in the conversation from sustainability-centric topics and discussions to resiliency-centric ones,” explained Chiara Cecchini, SVP of commercialization at Savor, which makes fats and oils from captured carbon,
Although environmental concerns are important, operational and financial risks tied to climate disruptions increasingly motivate companies.
“People care because their business otherwise is really suffering from a resiliency perspective,” Cecchini said.
Climate Smart broadcast is now on demand for free
Climate Smart's two-day broadcast features exclusive interviews from industry leaders on how to build a more resilient, low-impact food system. We take a closer look at how the food and agriculture industry is rethinking climate-smart strategies from regenerative agriculture and sustainable sourcing to upcycling, regulatory compliance, artificial intelligence and food-tech.
Watch on demand for free here.
For Savor, the opportunity lies in addressing both environmental and supply chain challenges.
Cecchini pointed to volatility across agricultural commodities, such as cocoa butter or palm oil, saying, “You have El Niño, you have all these crises, and you see these prices going up and down, volatility really being part of the supply chain.”
Rather than positioning climate-smart ingredients as outright replacements, resilience comes from diversifying sourcing options, she said.
Complementary ingredients that reduce dependence on climate-sensitive commodities are increasingly attractive to retailers, according to Michelle Zackin, co-founder and chief strategy officer of Round River Provisions, a food supply chain company that helps brands, retailers and manufacturers build sustainable commodity supply chains.
“What happens if, with growing demand, actually we could fill that gap, and with that gap we could actually work on ecosystem preservation and conservation and restoration?” Cecchini added.
Retailers remain critical gatekeepers for scaling climate-smart innovation
Retailers increasingly influence whether new technologies successfully scale.
While corporate venture investments can help emerging companies raise funds, retailer purchasing commitments often provide a more meaningful pathway to adoption, Zackin said.
“An equity investment doesn’t guarantee that those ingredients land on shelf,” she noted.
Rather, she emphasized the importance of demand signals where retailers commit to buying products to drive commercialization.
“If you bring it, I will buy it,” she said.
These commitments can provide suppliers and manufacturers with confidence to expand production.
“That actually then gives you the bankable signal to drastically scale up your operations,” she added.
Early retailer engagement is “a huge leverage” for manufacturers developing new ingredients and products at scale, according to Mohan Valluri, EVP of Alamance Foods, a co-manufacturer that makes branded and private label beverages.
He described how retailers help generate demand while giving manufacturers confidence that innovations have long-term support – as long as the volumes make sense for the manufacturer.
Retailers also influence consumer purchasing decisions, Valluri noted.
At the same time, sustainability benefits alone rarely convince buyers. Zackin noted that retailers first determine whether products fit category needs, satisfy consumer demand and meet pricing expectations.
“The sustainability claim essentially is like the cherry on top after all of those other boxes have been checked,” Zackin said.
Data transparency remains a persistent challenge in resilient supply chains
Despite growing attention on emissions tracking and sustainability metrics, data fragmentation continues to complicate supply chain decision-making.
Zackin pointed to the complexity of connecting information across multiple points in food supply chains.
“How can we make sure that that data, which is enabling these great stories, does come all the way through to the customer, and then that customer insight comes all the way back to the original producer?” she said.
Consistency and alignment across organizations continues to remain difficult because different stakeholders often prioritize different metrics.
Valluri noted that retailers and foodservice operators increasingly require emissions reporting across Scope 1, 2 and 3 categories, but understanding and standardizing those measurements remains a work in progress.
