Consumer Staples Author: Sasha Chen, Fuller Wang Apr 18, 2022 11:29 PM (GMT+8)

Based on Iyiou’s original research report, this article dissects the impact of China’s food and beverage industry on carbon emissions followed by the state's goal of achieving carbon neutrality by 2060. In recent years, the market size of China’s food and beverage industry has continuously expanded and led to an inevitable increase in carbon emissions. The below article demonstrates a suite of new solutions that allow companies and consumers to make more sustainable choices.

food and beverage

Undergoing a Carbon-Neutral Testimony

In China's food and beverage industry, vertical tracks from upstream to downstream sectors have encountered a pressing need of transforming into green production from the traditional model. According to Our Word in Data, the agricultural sector produces the second most greenhouse gas emissions than the energy sector, encompassing livestock, corp burning, and deforestation. In China, the agriculture industry has emitted a considerable amount of emissions based on the large population and overconsumed agricultural byproducts. 

market size1.png.png

Be mindful that in this case, China has 6 billion mu of grassland mainly used for animal husbandry production. It is also an important green carbon sink for the terrestrial ecosystem. The development of grass and animal husbandry through natural grassland management and artificial grass planting. The greenhouse gas emissions per kilogram of animal protein-based food are significantly higher than that of the production of vegetable protein-based food. In order to reduce carbon emissions in the agriculture sector, animal husbandry will need to introduce scientific methods for reducing carbon emissions. The win-win situation between ecological and production systems lies in the technical processing to obtain high-quality and efficient forage carrying out livestock breeding and processing production system. 

China has made a commitment to achieve carbon neutrality by 2030 and encouraged industries to closely monitor their greenhouse gas emissions as a part of the SDG. Iyiou research discloses that China's emission control mainly spreads from the energy, transportation, and infrastructure sectors without effective and long-term control measurements in the food and beverage sector. This lack of efficiency reflects in the proportion of enterprises in this industry that regularly release their ESG report, disclose carbon emissions data, and reveal detailed information. 

Trialing A Range of Solutions

Among a handful of solutions to reduce carbon emissions in the food and beverage sector, Iyiou pointed out that one of the major measures is to estimate the carbon emissions in a product lifecycle from raw materials, production, and consumption to the final step of recycling. For instance, in the beverage industry, the raw materials composed of plastics directly caused higher carbon emissions in the upstream sector compared to the downstream. 

In China's economy, the food and beverage industry is a core industry but with an unreasonable structure and sloppy production methods that result in high energy consumption, emissions, and pollution. In total, this industry contributed around 17% of global greenhouse gas emissions, ranking third after the energy industry and construction industry. Within this spectrum, more than 90% of food manufacturers emitted carbon dioxide through indirect processes such as raw materials, packaging, and logistics. 

2022 Industrial Report_Food & Beverage Company.png.png

There are four fundamental solutions to reduce carbon emissions in the food and beverage industry, with one focusing on digitization and AI-driven autonomous technologies in agrochemical sectors. A newly rising trend of smart agriculture integrates big data, cloud-based calculation, and AI technologies to transform traditional labor-intensive agriculture into tech-oriented effective production. This new model can apply to livestock feeding, agricultural harvesting, and land irrigation while optimizing productivity and reducing greenhouse gas emissions. 

The second solution integrates with the production process in the supply chain when food production often involves complicated steps and henceforth increases the potential risks of emitting more greenhouse gases. Taking an example of plant-based meat, there are four types of technologies that help with the carbon neutrality goal, including automation, thermal processing, recycling, and sustainable packaging. During this process, automation and digitalization can significantly enhance the utilization rate of resources.

One remarkable development is the auxiliary facility in the midst of reducing carbon emissions and solving the pain points in food and beverage production. By correlating the supply and demand in both auxiliary and production facilities, companies can achieve higher efficiency in the production process. Furthermore, the artificial Internet of Things (AIoT) is another helpful technological tool to facilitate smart energy distribution and sourcing in auxiliary facilities.

Circling back to the third solution of reducing carbon emissions, companies have been putting close attention to the retail and distribution part. In retail scenarios, such as supermarkets, retail shops, and restaurants, infrastructures, such as energy and transportation, are critical and often release large amounts of carbon emissions. There are four steps to minimize this adverse impact, including supply chain management, energy-saving mode, sustainable purchase, and waste recycling. The last solution embedded with carbon reduction is the consumption and recycling part, from which consumers are encouraged to have greener life habits of consuming fewer meat products and using less plastic packaging. While plant-based meat has presented a popular trend in recent decades, there is more room for Chinese companies to improve on their technologies.

In a Nutshell

With a detailed description of reducing carbon emissions in China's food and beverage industry, this article explains the existing market trends and effective solutions from upstream to downstream sectors. 

Check the full report here.