Today is Earth Overshoot Day for the Benelux countries: if the whole world were to live as they do in Belgium, Luxembourg and the Netherlands, all the raw materials that the earth can provide this year would already be depleted. Every day we grow our debt with our planet, and the IPCC (the UN’s climate panel) warns that we are on the brink of a climate catastrophe. The future of retail and FMCG is also at risk.
Four planet Earths required
If everyone lived the way they do in the Benelux countries, we would need four planet Earths. That is the meaning of today as Earth Overshoot Day, a date calculated each year based on each country’s ecological footprint. Today is the day on which the Benelux nations have already finished their piece of the cake: our consumption exceeds the planet’s capacity.
The earth gets a bit of a break only because so many developing countries consume far less and compensate for the West: in 2021, 29 July marked the exhaustion date for the entire world. From that date onwards, humanity used more natural resources than the earth could regenerate during that year.
Earth Overshoot Day also falls earlier every year: for Belgium, it took place on 26 March this year, one week earlier than last year. Luxembourg already crossed the threshold on Valentine’s Day, 14 February. The Dutch have until 12 April, but by then, they will also be living above their means.
Now or never for the planet
Just this week, the climate panel of the United Nations issued the third and final part of its chilling climate report. Its warnings are unmistakable: we are heading for climate disaster. The chances of keeping global warming below 1.5 degrees are getting smaller with each passing day. If we fail to do so, the consequences will be disastrous: plant and animal species will disappear, agriculture will become impossible in some places, and people will have to flee from the vengeful climate. It is now or never, the UN states unequivocally.
“Today, we all have our eyes on Ukraine, and rightly so, but there is another disaster on the way. Right now, we are already experiencing the effects of scarcity: inflation, empty shelves, and price increases; we can see what happens when the global supply system gets disrupted. But that is nothing compared to what will happen tomorrow”, says Jorg Snoeck, founder of RetailDetail and co-author of the new books The Future of Food and The Future of Shopping: Re-set Re-made Re-tail. The books outline how retail and consumption are being fundamentally reshaped by the increasing pressure that humanity is putting on the planet.
Towards ten billion people
“There are increasingly more of us, consuming more and more and emitting more and more”, Snoeck illustrates the issue. We live in the Anthropocene, an era in which humankind determines the planet’s fate for the first time. We hold the Earth’s future in our hands, but only continue to increase our pressure on the planet. “The world’s population is rising rapidly: there will be ten billion people in 2050, compared to almost eight billion today. To feed all those mouths decently, we would need over 50 % more food. But we are already pushing the limits.”
In particular, the rapidly increasing population of Asia (which already accounts for two-thirds of the world’s population) has significant consequences because the people there are also rapidly becoming more prosperous. China already has the largest middle class globally, with more people than the entire population of the United States and 60 % of Europe’s total population.
With this prosperity comes new consumer behaviour. China is now the largest market for most global brands, but Chinese middle-class people are also starting to eat like their western counterparts. The demand for meat has been rising sharply in Asia for decades, while livestock farming, in particular, has a problematically sizeable ecological footprint.
The Chinese are stripping the world
Chinese President Xi Jinping is doing everything to keep the growth engine running and to supply his country with the necessary raw materials. The pressure is on, as our planet is already unable to support itself – let alone when countries like China industrialise even further and thus consume and/or emit even more.
So an actual race for raw materials is underway, regardless of the war in Ukraine. China has been building four new Silk Roads for years, with which Xi Jinping wants to secure the supply of his country. From copper mines in Serbia to fishing in Madagascar, the Chinese are literally making their way there. The strategy is the same everywhere: Chinese state-owned companies offer (poorer) countries to build modern infrastructure, often railways and motorways, but also modern harbours and factories. The technology and facilities are Chinese, the operation is done by the Chinese, and if the countries cannot pay back their loans, China also becomes the owner.
China is also very active on the import side, Snoeck observes. A few examples: the country fills ships with wood from Europe, the renowned Rothschild wines have a long-term Chinese contract, and now that Russia has withdrawn, China is becoming the world’s granary. And what about the ties between Putin and China? “What if all the raw materials go to Asia soon? We are going to feel that.”
Waste becomes too expensive
Not only are we heading towards a climate catastrophe, but also a world of scarcity, Snoeck believes. “The solution is not to stop consuming or ‘consume less’, but to consume more consciously. Let’s start thinking about our waste: we cannot afford to waste today and tomorrow. Waste is becoming too expensive.” After all, food comes at a cost to people and the environment. Food being sold at dumping prices is a thing of the past. “If we want to make sure that the next generations still have food, we have to take a different approach.”
So what should we do? In terms of distribution, Snoeck thinks we should move towards food tailored to the consumer. Think, for example, of meal-kit services like HelloFresh, where every ingredient gets delivered in exact quantities. That way, there is less waste. But such solutions should also be available for people living by themselves (one in three households in the EU already consists of one person) and for the elderly. After all, a quarter of Belgians today are over 65, and the ageing population is only increasing.
Science can save us
Furthermore, producers must look for the food of tomorrow. “Science will have to help us. Danone, for instance, has developed carbon-neutral Actimel in Belgium for the first time. Cows are given a food supplement, reducing their methane emissions by 30 %. But policymakers must be careful not to shoot themselves in the foot by over-regulating and, thus, preventing companies from experimenting.
European companies are faced with the downside of globalisation. “Old and new systems clash. Those who do not innovate quickly enough will lose the race. Money is pulled out of Europe and disappears to the west or the east. After the American multinationals, Chinese players are now on the rise. Just think of JD.com‘s Ochama, which is leaping onto the omnichannel market in the Netherlands thanks to its technological advantage. In Italy, the Chinese are taking over the tailoring workshops in Prato one by one for Chinese fast fashion ‘made in Italy’. So, the same applies to non-food. There is a need for transparency and consumer awareness, especially there.”
Which methods, technologies or new business models can secure a bright and sustainable future for European retail and FMCG? Find out now in the books The Future of Food and the completely new edition of The Future of Shopping (available in late May).
At the RetailDetail Congress on 28 April, Jorg Snoeck will also present an inspiring keynote on the future of shopping. He will be sharing the stage with Megan Maley (Zalando), Roland Palmer (Alibaba) and many others. Click here for more information and tickets.