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At the end of every year since 2006, Rabobank asks their contacts in the food supply chain (“ranging from start-up founders to CEOs of zillion-dollar companies, and everyone in between”) the following question: “In the world of food, what surprised you the most over the last twelve months?” This year they received over 200 responses, some surprising, some less so.

Overall, respondents were “surprised” by the way the food supply chain is managing to respond quickly to constant changes in consumers’ demands. As one client wrote: “From delivering new products, changing business models, adjusting to consumer shifts, investing in innovation in various forms, and facing tough realities, the world of food is markedly different.” Heads are no longer being buried in the sand, as “it seems that everyone suddenly woke up.”

However there was still some criticism of “”Big Food,” with one respondent writing that he was surprised that “that big-food-brands companies are still struggling to grow despite most of them revising strategies and replacing CEOs.” Another was surprised that “the troubles faced by the Big CPGs, with brands my mom and grandparents used to buy, seemed to get worse over the past year despite so much renovation and reconfiguration of operations and marketing approaches.”

Some respondents talked about the way Big Food is trying to achieve top-line growth “via overpriced acquisitions that are shareholder wealth destructive”. Another remarked “companies continue to chase the unicorns by overpaying because they have few ideas of their own and get desperate.”

Many respondents expressed surprise at the rapidity with which consumers are embracing plant-based foods and/or a “flexitarian” diet. One client replied that he was surprised by “the acceleration of plant-based foods – and the growing acceptance of the products by non-vegan, non-vegetarian consumers regardless if their motivation is for health, animal welfare, or environment.”

Respondents were almost unanimous in their view that this is an enduring trend rather than a “fad”, but many stressed that the diet was not for everyone. One wrote, “Despite all the money flowing into replacement meat products, I don’t see the evidence of consumer desires for these products.” Another mentioned the “mismatch between what the media is writing about and reality.”

One “surprise” that was cited was the different ways in which consumers respond to technology in their food supply. Some clients detected a thawing in relations between food and science: although “consumers have been rejecting science more and more over the past decade” (such as the non-GMO movement), there is growing appreciation of the role of technology in many aspects of food and agricultural production”.

However, one respondent wrote he was frustrated by “the rising tendency for people to selectively believe science only when it aligns with their beliefs.” Others were surprised by the lack of pushback by food companies against the anti-science bias in food. One criticised “the willingness of some food companies to ignore science and chase consumer fads.” Examples included the proliferation of free-from claims on “products that never have, nor will have, certain ingredients.”

Some respondents expressed surprise “by how quickly capital and ideas are flowing to the nascent and undefined world of CBD, (cannabidiol – a non-intoxicating cannabinoid found in cannabis and hemp) both in food and beverages.” One expressed surprise that food companies and retailers are “embracing CBD given regulatory uncertainty, not to mention uncertainty around its effectiveness, proper dosage, etc.”

However, with the passing of the latest Farm Bill taking industrial hemp off the list of Schedule 1 narcotics (as defined by the Controlled Substance Act), one respondent wrote, “I almost see this as a space that can be as deep and wide as alcoholic beverages, and large strategics are having to act quickly to determine whether or not they want to take the risk of playing in this space (or not).”

Among other surprises cited in the survey was “the velocity and breadth at which #MeToo rippled through the restaurant industry, resulting in rapid response and swift changes.” Regarding the environment, one client wrote, “This year we did not see coming the food industry disruption associated with use of plastic straws.” And for trade, one mentioned “The rapidity with which the trade war with China escalated, the resultant tariffs, and their impacts on fruit and nut producers in the U.S.”

Finally, the last word is left to the respondent who wrote that he was “surprised by the ferocity of the arguments about whether low-fat or low-carbohydrate diets are better for weight status. Really, both work, provided people adhere to them, and calories really do matter.”

When I was researching my book « The Sugar Casino », one of the questions that puzzled me was why we are consuming more calories than in the past. Referring to USDA data, I wrote,

« According to the loss-adjusted food availability data, Americans are consuming more calories per day than they did 40 years ago. In 1970, Americans consumed an estimated 2,109 calories per person per day; in 2010 they consumed an estimated 2,568 calories….

The average American is eating 459 calories more each day today than he, or his parents, were eating in 1970. »

I have now, rather surprisingly, found part of the answer to that question in « Why We Sleep: The New Science of Sleep and Dreams » by Matthew Walker, a British scientist and professor of neuroscience and psychology at the University of California, Berkeley. He was previously a professor of psychiatry at Harvard Medical School. (An article in last week’s Guardian newspaper summarised some of the main themes of the book.)

Regarding the effect that sleep has on health, particularly on obesity, Mr Walker explains that two hormones in your brain control your appetite: leptin and ghrelin. Leptin signals a sense of feeling full, while ghrelin triggers a strong sense of hunger.  He writes that clinical tests have shown that « inadequate sleep decreased concentrations of the satiety-signalling hormone leptin and increased levels of hunger-instigating hormone ghrelin. »

Looking to see what this might mean in practice, one clinical test found that individuals who slept between four and six hours per night consumed 300 calories per day more than individuals who slept eight and a half hours per night. He writes, « Scale that up to a working year, and assuming one month of vacation in which sleep becomes abundant, and you will have consumed more than 70,000 extra calories. Based on calorific estimates, that would cause 10 to 15 pounds of weight gain a year. »

But it is not just a question of how much you eat, but also what you eat. Sleep loss increases the levels of endocannabinoids which, like marijuana, can give you the « munchies ».

In one test, participants were given access to an unlimited lunchtime buffet. « Despite eating almost 2,000 calories during the buffet lunch, sleep-deprived individuals dove into the snack bar. They consumed an additional 330 calories of snack foods after the full meal, compared to when they were getting plenty of sleep each night. »

Tests also found that sleep deprived individuals were 30 to 40 percent more likely to have cravings for sweets, carbohydrate-rich foods, and salty snacks compared to protein-rich foods such as meat or fish.

And Mr Walker counters the argument that your body needs more calories the less it sleeps. He writes, « Sleep, it turns out, is an intensely metabolic active state for body and brain alike. » What’s more, the less you sleep, he argues, the less active you will be during the day. He writes, « inadequate sleep is the perfect recipe for obesity: greater calorie intake, lower calorie consumption. » He continues,

« Of course, the obesity epidemic that has engulfed large portions of the world is not caused by lack of sleep alone. The rise in consumption of processed foods, an increase in serving sizes, and the more sedentary nature of human beings are all triggers. However, these changes are insufficient to explain the dramatic escalation of obesity. »

To emphasise the point, Mr Walker plots the reduction in sleep time (dotted line) over the past 50 years in the US on the same graph as the rise in obesity rates (below).

He summarises the current state of scientific research as follows: « Short sleep (of the type than many adults in first-world countries commonly and routinely report) will increase hunger and appetite, compromise impulse control within the brain, increase food consumption (especially of high-calorie foods), decrease feelings of food satisfaction after eating, and prevent effective weight loss when dieting. »

And as a warning for future generations, he argues, “We are now observing these effects very early in life. Three-year-olds sleeping just ten and a half hours or less per night have a 45 percent increased risk of being obese by age seven than those who get twelve hours sleep a night. To set our children on a pathway of ill health this early in life by way of sleep neglect is a travesty”

Going back to my original question, it is possible that changing sleeping habits explain 300 of the more than 450 extra calories that we consume each day compared to our parents. The rest, I imagine, can be explained by the greater availability of calorie-rich processed foods and larger portion sizes.

So if after a long night entertaining customers you are now reading this blog on your telephone while trying to stay awake at the back of a conference hall, let yourself drift off. It may mean you eat less at the conference lunch buffet!

A conversation with José Orive, Executive Director of the International Sugar Organisation

Good morning José. Could you please tell me a little about yourself?

I grew up on a ranch in Guatemala; we were mainly cattle, but we did have some sugarcane and we fed the molasses to the cattle. My brother stayed on the farm and I studied law at Georgetown University in the US, and then did a masters degree in international trade agreements. That led to me working with the Guatemalan diplomatic service as a trade negotiator.

So you are a diplomat with experience of trade negotiations. Does that help in your current role?

It does, especially given the sensitivity around sugar at the moment. Different people have different expectations—and the cultural differences are enormous. Although most people view the ISO as “being about statistics,” we are really about people.

But what does the ISO do exactly?

We are a United Nations body that came out of the Bretton Woods Agreement. It was part of the post-World War era, where food security was of paramount importance.

At first, the ISO intervened actively in the world sugar market, telling people what to produce, when to market it, what stocks to hold and what price to sell at. But by the end of the 1970s, countries realized that the market did all those things better, and did away with the so-called “economic clauses” of the agreement.

Our role now is to monitor, analyse and study the world of sugar and biofuels. Our goal is to produce intelligence that enriches people’s decision making. We avoid telling people what to do, but we lay out the variables and the key factors around issues that are pertinent to the sugar world.

We have 88 country members, including the EU, which acts as one party, and 10 staff.

Is it part of your mandate to defend the sugar industry?

Yes it is. We have an advocate role. It is an interesting function, as many governments do not have a single voice on the issue. Sometimes we act as arbitrators between ministers of health and ministers of trade and agriculture—around the importance of sugar for sustainable development and its role in nutrition as part of a healthy diet.

You have to remember that the sugar industry is a key driver for development and incomes in rural areas in many developing countries. When you visit these countries you can see how villages and small towns can be lifted up when a sugar mill opens nearby. You will see schools and hospitals being built, and then the next generation ends up with a college degree. That is something that governments have to encourage. Sugar plays a huge part in that; it is a driver for development.

Does the ISO also get involved in arbitrating between farmers and millers?

We are currently undertaking a study of the payment systems of cane and beet worldwide. One of the main drivers for this has been the desire of growers of beet and cane to participate in downstream projects such as ethanol, electricity co-generation and green plastics.

Some millers want farmers to participate in the downstream products, but they argue that farmers have to invest with them and assume some of the risk. Other millers say, “No, we acquire the raw material and we pay for it. What we do with it is our business and not yours, because you have been paid. We can lose money in a bad year if the price of these products is
low, but that is our risk and not yours.”

With governments becoming increasingly anti-sugar, are they asking themselves why they should be members of an organization whose role it is to promote the sugar industry?

I haven’t seen a country or a government directly question their membership as a result of their position on sugar. That said, it is almost impossible to stop finance ministers from considering a sugar tax. They look at the additional revenue and it is hard for them to resist. Sugar taxes are driven both by politics and revenue. The tax in Mexico raised $1.2 billion over two years.

Do sugar taxes reduce sugar consumption?

If you take Mexico as an example, domestic sugar consumption dropped during the first year after the tax was introduced in 2014-15, but by the beginning of 2017 it was back to its pre-tax level. By September 2017, consumption was above the pre-tax level.

Politicians suppose that if they make a product more expensive people will stop consuming it, or consume less of it. But that is not the case when the product is relatively cheap to start with.

But aren’t sugar taxes just taxes on the poor? Rich people don’t care, but people on low incomes do. And as you have shown in Mexico, they don’t consume less; they just pay more in taxes.  

That is exactly the case in Mexico where sugar consumption is overwhelming concentrated among the poorer sectors of society.

But is that money being given back to the poor in terms of education or healthcare?

That is the question. I don’t understand why governments aren’t making a big fuss about all the schools and hospitals that they are building with the revenue from the sugar tax. But they aren’t. It is total silence.

If you have $600 million coming in per year and you are only spending $200 million on schools and hospitals, people will start asking what you are doing with the rest of the money. And people will start asking whether the money has been spent efficiently. Politicians hate that.  We have tried to look at the figures in some countries, and we must try to get the politicians to stand up and be transparent with the numbers.

Some advocates of sugar taxes have asked for the revenues raised to go into a separate fund, but in most cases this hasn’t happened. The money just gets funnelled into the general kitty box.

Are you arguing that the sugar taxes have not had any effect on sugar consumption?

Sugar taxes don’t seem to have affected consumption in developing countries, but per-capita consumption in niche markets of developed countries is falling, and the anti-sugar lobbyists are claiming credit for that.

But per-capita sugar consumption in developed countries has been falling for the past fifty years.

Historically, global sugar consumption has been rising at 2.0/2.1 percent per year. Now it is rising 1.6/1.5 percent. The growth in global sugar consumption has slowed, but the total amount consumed is still growing. England is an exception to that; total sugar consumption is dropping in the UK.

Apart from sugar taxes, what are the other challenges facing the industry?

Producers are realising that they have to diversify, and not to put all their eggs in one basket. The companies that are diversified are doing well in spite of the current low sugar prices. I think the traditional model of specializing in, and just producing, sugar is outdated.

I also believe that more effort needs to be made to bring together cane growers and millers, beet growers and factory owners. The industry also needs to work together better to share best practises in terms of sustainability, nutrition and new technologies.

And what are your main challenges at the ISO?

First, we have to stay relevant, to constantly tweak our products and services to make sure that they are relevant to our members. I am sure that we can do more with the data that we have, and we are working on that.

Second, we have not only to maintain our existing membership but we also have to bring in new members.

Third, we have to organize good events—events that are rich in content, interactive and dynamic.

Fourth, we must build relations with our sister organisations in other commodities, to learn from them and share with them.

Fifth, we must learn how to better engage with NGOs, for example on child labour and sustainability, and with health organisations, on sugar and nutrition. If governments are going to adopt policies that affect our industry, then our industry needs to have a seat at
the table.

Where are the success stories in the sugar industry?

There are many. The role that sugar plays in rural development is well documented, but it also has a role in nutrition. Guatemala has the world’s most successful micronutrient programme with the fortification of sugar with Vitamin A. The programme has completely eradicated infant blindness in the country, as well as leading to a fall in child mortality. Malawi and Tanzania are now following Guatemala’s example. We need to do more
to highlight these successes.

Thank you José for your time.