Our Food and Health Entrepreneurship Academy (FHEA) is fast approaching. At the end of this month, university researchers studying aspects of food, health, and sustainability (e.g., developing innovations in agricultural practices, nutrition, safety, diet, transportation, processing, and consumption) come together to explore the opportunities for broadening the impact of their research. Conveniently, a number of major corporations are recognizing that both the market and Wall Street will be rewarding and punishing corporate performance in these areas.
For example, Pepsi's new strategy prominently includes addressing the market for more nutritious convenience foods. In a recent WSJ article,
Chairman and Chief Executive Indra Nooyi is staking her reputation on building out the company's "good-for-you" portfolio, uniting the Tropicana, Quaker and Gatorade units under one umbrella and expanding their product lines. Ms. Nooyi has said she wants to build the nutrition business to $30 billion from $10 billion by 2020.
Unilever and P & G have also recently announced sustainability initiatives (Pepsi has held a queit leadership position here for some time now). For example, Stuart Smith (MarketingWeek) describes the not insignifcant challenges Unilever's CEO Paul Polman is taking on,
Within ten years Unilever has publicly committed itself to source 100% of its agricultural products sustainably; halve the environmental footprint of its products throughout the cycle, from suppliers, to plant, to consumers; and help 1 billion people improve their health.
This is good news for those university researchers who are developing novel ways to replace the products and processes of industrial agriculture with more sustainable and nutritious—or at least less toxic—alternatives.
The changing social contract
Interestingly, the impetus for nutritious change is not some Scroogean character transformation on the part of corporate leaders. Instead, it reflects a rather visionary recognition that the social contract that binds major food companies to their markets is changing.
The threat of a changing social contract is one of the few ways in which future liabilities are translated, for corporate executives, onto current balance sheets. If you want to understand the role that a changing social contract plays, think of cigarettes today and electric power tomorrow. Both sell a product that is widely craved—and, prior to sixty years ago, nobody foresaw their ill health effects. But, by then, the companies and market were too big to abandon.
Today, the future liabilities of smoking related death and disease is a tangible part of tobacco companies stock prices, insurance rates, even capital costs. Similarly, the coal plants that electric power companies built 50 years ago are haunting them now in terms of the (then unexpected) liabilities of carbon emissions. Propose a new coal plant today and, one way or another, the future liabilities of its emissions will be on the balance sheet.
The same future liabilities are beginning to appear in the strategies of major consumer packaged goods companies—and the result, thankfully, is an emerging emphasis on bringing less toxic, lower carbon, increased nutrition, and more sustainable food and health solutions to the mass market.
From where I sit, promising research is happening across the country (and globe) in sustainable and healthy food production, processing, and consumption. I'm optimistic that, as corporations increase their efforts to find new solutions, scientists will increasingly have relevant and valuable solutions to offer.