IMD International


Dr Aileen Ionescu-Somers comments

March 5, 2013

Some of the world's biggest brands have been hit by the horsemeat scandal sweeping across Europe. Tesco, Nestlé, Ikea and many other companies have withdrawn products from their shelves after DNA testing showed that meals they marketed as containing beef were in fact contaminated with horse meat.

It's too soon to say exactly how this occurred and what impact this will have on the reputation of the individual businesses involved, but the crisis raises a much bigger issue: just how viable is our food system?

In the last decade the globalization has had a significant effect on how companies move goods and services around the world. Sometimes this has a positive result such as reduced cost, or increased access to products and markets. But the other side of this is that the constant search for improved efficiency has created long, complex supply chains that can make it hard to see the wood for the trees.

And it's not as if this is the first time that this has led to scandal. The 1980s and 1990s had "mad cow" disease, while more recently we've seen baby milk powder contaminated with melamine in China, and beansprouts infected with the E. coli bacterium in Germany. These were scandals on yet another level since there were multiple deaths of consumers involved.

So why are we still seeing this sort of crisis? Legislation is part of it, although not the only major element. There are clearly imperfections in the European meat traceability system, yet the EU has some of the most stringent health and safety requirements in the world.

A very significant reason is also industry and market resistance to change. Scandals flare up then fizzle out; by 1998, for example, British beef sales were almost back at pre-crisis levels, demonstrating remarkable market resilience. This resilience undoubtedly reduces the pressure on the industry to make real, significant changes.

But these changes are critical. Our food system is reaching crisis point - if it has not reached it already. Companies will have to take on responsibility for revising the entire food system, but so far radical innovation - market transformation - is slow in coming.

It's also worth pointing out that, while fears around the quality and safety of food capture public attention, there is another force driving the need for transformation: the environment. Climate change is affecting crops and water supply, while debate around genetically modified organisms adds another level of challenge to agricultural commodity supply chains.

However, work being done to tackle these challenges suggests an approach that could be used across food supply chains more broadly. Industry players, farmer groups, NGOs, and other organizations are coming together to find solutions. They have realized that no one sector or stakeholder group can come up with the answers on their own, since the issues involved are too big for any one player.

One example of such collaborations is the creation of the first ever Practitioners' Guide to Sustainable Sourcing of Agricultural Commodities, which will be published at the end of this month. Seven global organizations , including IMD, have collaborated to bring together the best ideas and experiences from the global food & beverage industry to create an open source innovation tool.

Multi-stakeholder groups (companies in the value chain, farmers, governments, NGOS, cities, communities, and others) would do well to tackle other pieces of the complex jigsaw puzzle that is our food system and - sooner rather than later - trigger a remodeling of the whole.


Dr Aileen Ionescu-Somers is the director of IMD's Global Center for Sustainability Leadership (CSL) Learning Platform.

IMD's Global Center for Sustainability Leadership has a primary focus on strategic innovation for sustainability through development of relevant thought leadership, research and learning activities. In particular, its innovative One Planet Leaders Program - a collaborative effort with WWF, the environmental organization - is focused on tomorrow's challenge of living within the limits of one planet. The CSL Learning Platform is holding its next thought leadership Roundtable on Sustainability Dilemmas and Solutions affecting Natural Resources on 20/21st March. One of the projects that the learning platform of IMD's Global Center for Sustainability Leadership (CSL) has been involved in recently is a partnership between seven global organizations (including IMD) to produce the world's first ever Practitioners' Guide to Sustainable Sourcing of Agricultural Commodities (forthcoming at end of March 2013).

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