How Food Companies Unlock Opportunities From Methane Action

As devastating wildfires, floods, and disease outbreaks impact everything from the health of farm animals to grocery store prices, major food companies are acting to protect their bottom lines and help create a more resilient industry by addressing methane pollution.

From chocolate bar makers to restaurants, companies across the food system are taking steps to lower their methane emissions and unlock a range of business benefits, ranging from more efficient operations to expanded market reach. A potent pollutant, methane accounts for the bulk of the industry’s greenhouse gas emissions from agricultural activities such as raising livestock and storing manure.

That’s why reducing methane pollution serves up a smorgasbord of opportunities for food companies, especially those that are dependent on dairy, beef, and pork production. They can quickly confront risks facing the industry in the short term while also opening paths for boosting profits, developing cutting-edge products, and safeguarding supply chains in the long run.

Acting on this opportunity, market-leading food companies are focusing on strategies to engage their supply chain – where up to 95% of a company’s total emissions can occur – to implement proven practices and emerging solutions for methane reduction. They are following three primary strategies:

Engaging directly with farmers

Technology and farming practices that already exist have the potential to reduce livestock emissions by 15-20% . These range from feed additives to anaerobic digestors, a system that can break down animal manure to avoid pollution. But further innovation will be required to curb methane to the degree needed to avoid the costliest impacts of extreme planet warming. Companies that work with actors in the early stage of food production –farming, ranching, and raw ingredient processing – are both encouraging farmers in their supply chain to incorporate existing methane-cutting solutions and investing in developing new innovations.

Chocolate producer Barry Callebaut launched its VisionDairy program to engage suppliers and partners across its milk supply chain to adopt practices that can help lower farm emissions. This includes providing incentives to farmers who reduce methane through feed additives or adopt regenerative practices, such as using cover crops, which the company says can lead to improved soil health, water quality, farmer profitability, and decreased GHG emissions.

Company-to-company engagement

Not every company can work directly with farmers on methane mitigation. Instead, businesses further down the supply chain are engaging in innovative ways with their suppliers to ensure that all members in the food system can participate in methane strategies. These partnerships can help finance methane-reducing projects on farms by spreading out the costs among different players. They can also spur industry adoption by setting methane-specific procurement policies, such as setting methane limits for dairy, beef, and pork, and requiring suppliers to disclose emissions.

Starbucks, Giant, and Turkey Hill have joined companies from across the industry in partnering with the Maryland and Virginia Milk Producers Cooperative Association and the Alliance for the Chesapeake Bay to fund sustainability projects for farmers. These projects, funded by cost-sharing, direct funding from customers, and grants from government programs, are aimed at promoting best practices among farmers to reduce the carbon footprint of milk production and improve water quality.

Signal demand

With every new venture, there can be risks to farmers in adopting new technology or practices and those aimed at reducing methane pollution are no exception. To ease the transition, companies are helping to lower the risk to farmers by committing to purchase products made with low-methane ingredients, including offering to pay price premiums and sign long-term contracts for those goods.

The First Movers Coalition for Food is seeking to use the collective demand signal of supply procurement from multinational corporate and research partners to accelerate the adoption of sustainable farming practices. Tyson Foods, General Mills, and PepsiCo are among the dozens of food system leaders that are members of the group, which together represent more than $900 billion in global revenues.

As these examples illustrate, food companies across the industry are increasingly incorporating methane reduction into their supply chain strategies as an opportune way to maintain long-term business value for themselves, their communities, and their investors and lenders.