UGEC2210 Food and Hunger

The Food System

CONTENT
What is a food system?
Analysis of the food system
Local and global food systems
Globalization of the food system
Changes in the global food system

A Food System

Farming
and Fishing

Transport

Storage Areas
Processing

Distribution

Distribution
Retail grocer
or restaurant

System
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A Food System
THE CHAIN of ACTIVITIES beginning with the primary
production of food and moving on to include the processing,
distributing, wholesaling, retailing, and consumption of food,
and eventually to the disposal of food waste.
Including the inputs needed and outputs generated at each
step.

A Food System
Not a new concept
eg: the analysis of industrial input-output matrices

An Example of the Food System: A Capital Model

A Framework of the Food System

(Sobal et al, 1998).

A.

Food primary production

B.

Food processing

C.

Food marketing

D.

Food consumption

A. Food Primary Production

Agricultural production
Agriculture
Agriculture has been described as the purposive raising
of livestock and crops for human needs (Grigg, 1995)

living creatures, plants,

preserving social stability

A. Food Primary Production

Plant

Agricultural production
Farming, forest, fishery, animal
husbandry, and sideline

Livestock

Food sources
1.

Plants

2.

Animals

3.

Some exceptions: fungi,

mushrooms

Seafood

agriculture is not necessarily

tantamount to food production. Cotton
planting is a form of agriculture
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as well

Food Source: Plants

1.

2.

3.

Plants as grain food: around 2000 species

1.

Cereals: rice, wheat, corn, sorghum, millet and others

2.

Tuber crops: sweet potatoes and potatoes

3.

Pulses: soybeans and red bean

Vegetables:
1.

Root vegetables: potatoes and carrots

2.

Leaf vegetables: spinach and lettuce

3.

Stem vegetables: bamboo shoots and asparagus

4.

Inflorescence vegetables: globe artichokes and broccoli

Fruits: the ripened extensions of plants

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Food Source: Animals

Livestock and seafood
As food either directly, or indirectly

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A. Food Primary Production

The agricultural system
Input and output

Influencing factors
Human factors
Physical factors

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www.hku.hk/eroesite/html/ccc.pdf
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the change in temperature

Climate and war-peace cycles in

China in the past millennium
were closely matched.

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Conceptual Model
Human Ecological Model

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Future agricultural production:

Earth carrying capacity?

13 Billion Hectare

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B. Food Processing
Purposes of food processing
1.
2.

Enhance palatability, digestibility, sensory appeal

Make food more portable and tradable by

Processing

increasing the value/weight ratio

3.

Improve the storability

Manufacturing

Transportation
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B. Food Processing
Development:
Early food processing techniques were limited.
During the industrialization era, food manufacturing
arose.
At the start of the 21st century, a two-tier structure
manufacturing has arisen.

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B. Food Processing
Dispersed across the global
Consumer-driven adjustments
Both large and small food firms have unique
advantages that allow them to coexist in
common markets.
Affected by brand acquisition pattern

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Global sales share of top four manufacturers

by product category

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A Food Processing Giant:

Nestl, a Swiss, US and British owned company

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Another Food Processing Giant:

Unilever, jointly British and Dutch owned company

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B. Food Processing
A complicated process
E.g. making one can of chicken-soup noodle
involving 56 companies

Economic contributions of food processing

Employment
Product contribution
Value added: contribution to GDP

superfood > no price change;

farmers no. reduced.
more profits gained by the
processor; seller.

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Example: U.S.

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C. Food Marketing
Food marketing brings together the
producer and the consumer.
1.

Wholesale

2.

Retailing

3.

Foodservice

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C. Food Marketing
History of food retailing
1.

Once a week on market day in the pre-modern era

2.

Sold to distant locations with the onset of industrialization

3.

Supermarkets in the 20th century

4.

Vast warehouse-sized supermarkets in the latter part of the

20th century

narrower distance between the customer

and the products. Trust in yourself

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Share of Food Sales for Retailers in Selected

International Markets

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Wal-Mart Stores, Inc.

The world's #1 retailer
About 6,775 stores, including discount stores, WalMart Supercenters, and warehouse stores (SAM'S CLUB).
About 60% of its stores are in the US, but Wal-Mart is
expanding internationally;
The #1 retailer in Canada and Mexico.
It has operations in Asia, Europe, and South America.

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Carrefour SA
The world's second-largest retailer
Operates more than 12,500 stores under some two
dozen names, including hypermarkets, supermarkets,
convenience stores, discount stores, and cash-andcarry stores in about 30 countries.
The #1 European retailer (based on sales)
The biggest overseas retailer in China

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Supermarkets in Hong Kong

Wellcome
Founded in 1945, owned by Dairy Farm
first supermarket in HK
more than 240 stores serving more than 14 million customers
every month

Park'N Shop
Founded in 1973, part of A.S. Watson, owned by Asia's richest
man, Li Ka-shing
More than 260 stores in Hong Kong, Macau and China including
about 50 superstores

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Recent Trends of Supermarket

1.

Increasingly foreign owned

2.

Undergoing rapid concentration

3.

New supermarket formats

4.

No longer niche operations catering only to the

rich or the middle class

5.

New service offerings

6.

Private label

7.

New technology and business practices

Food markets are responding to

consumer preferences.
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New Supermarket Formats

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New Supermarket Formats

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Higher Market Concentration

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C. Food Marketing
Foodservice
Rapid growth in its importance
1.

Commercial channel
restaurant, fast food outlets, cafeterias,

2.

The noncommercial channel

Institutional foodservice operations including schools, prisons,
military, factories,
Contract out the services

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Foodservice

Fast food services

Rapid sales growth since 1960s
A challenge in future growth

Global food services

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D. Food Consumption
Changing food consumption patterns
The effect of rising incomes
1.

Bennetts Law
Changes in sources of calorie and protein

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D. Food Consumption
The effect of rising incomes
2.

Engels Law
The income elasticity of demand for food is less than 1

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D. Food Consumption
The effect of food price
The price of food reflects the overall demand/supply balance.
The price of raw food commodities has declined sharply since
World War II, but retail food prices have not done so.
Globally, consumption levels are improving.

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World Food Price Index

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D. Food Consumption
Consumers today are upgrading their diets to include
more high-value products than in the past.
High-value food products
Include semiprocessed, processed and other packaged products
1.

Commodity-based products:
identifiable with as specific commodity, such as meat,
fish, fruits or vegetables.

2.

Manufactured products:
undergo substantial transformation including
multiple commodities as ingredient.
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D. Food Consumption
Other factors affecting food consumption
Eating habit
Local culture
Religion
Lifestyle changes
Family structure
.

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Holistic Food System Perspectives

A.

Food primary production

B.

Food processing

C.

Food marketing

D.

Food consumption

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Local and Global Food Systems

The food system exists, whether you know
what it is or not.
The Food system is an incredibly complex
system and a multitude of food system.
Food systems:
Simple, complex, local, community, regional
and global food systems

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Community-based, or localized,
personalized food system
Food production in a locality
Small-scale processing industry and shops
A myriad of local food systems form a
global food system
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Attributes of A Local Food System

1.

Relational
Bioregions: diverse areas
social and natural systems

2.

Fresh and healthy

3.

More jobs

4.

Supportive of the local economy

5.

Food swaps and food miles

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Benefits of local food systems

1.

Environmental benefits

2.

Economic benefits

3.

Social benefits

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Some unanswered questions

1.

Problems with diseconomies of scales

2.

Problems with personal work benefits and

aspirations

3.

Problems with upstream and downstream jobs

4.

Problems with energy efficiency

5.

Problems with pathogenic bacteria

6.

Problems with policies

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Emergence of a Global Food System

All parts of the world are interdependent for food
production and consumption.
Food security issue at the global level
As a consequence of globalization

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Globalization
Globalization is the process of social, political, economic,
cultural, and technological integration among countries
around the world
Time/space compression
Resulting in a shrinking world

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Globalization
Come to the food system
Benefit:
Less input
More output

Concern:
growing marginalization of entire countries or social groups
within countries
rising of TNCs to control the whole production and
distribution chain

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Case Study: California

Dominated by large agribusinesses
e.g. 1% of California producers supplies 38% of the
states total agricultural production.
3 companies control 57% of the huge food retail market

Disappearance of small-and medium-sized farms and

loss of farm-relation jobs
the smallest 50% of Californias farms capture less than
1% of total agricultural revenue

Widening of the rich-poor gap

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Benefits of the Global Food System

1.

Providing greater food security at lower

economic cost;

2.

Rising agricultural productivity;

3.

Meeting the rising dietary expectations;

4.

Serving new demands of the worlds

consumers for nutrition, convenience,
variety and safety in customized yet
consistent ways.
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Problems of Global Food System

1.

Focus on production alone, with little

concern for nutritional or health-promoting
qualities of products;

2.

Emphasize medical approaches to solve

malnutrition problems;

3.

Simplistic views are the norm looking for

silver bullet approaches for
solutions.
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Problems of Global Food System

Possible problematic aspects in global food systems

sustainably, environmentally and socioeconomically.
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Localization as a solution?

The pathway to food sustainability and improved

nutrition-related health outcomes?
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CHANGES IN THE GLOBAL FOOD SYSTEM

How to change?
Chain reversal
Mass individualization

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CHANGES IN THE GLOBAL FOOD SYSTEM

Chain Reversal
consumer
producer

trade

retail

retail

trade

consumer

Past

Present

product push
short term
linkage oriented

market pull
long term
chain oriented

producer

CHANGES IN THE GLOBAL FOOD SYSTEM

Mass Individualization
production

products

distribution

FUTURE
An open and efficient global food system

In the future, food producers, processors

and retailers will no longer compete as
individual entities. Rather, they will
collaborate as a strategic value chain and
compete with other value chains in the
market place.
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