The plant-based food sector is being ‘massively impacted’ by the war in Ukraine, global NGO ProVeg International has warned.
The group has produced a new survey which sets out to assess the impact that the war is having on plant-based businesses globally.
Pro-Veg is careful to point out that its survey “does not reflect a desire to continue with business as usual in the face of the conflict” and that its “concern with the resilience of the sector does not in any way mitigate our concern for those affected by the war”.
Among the outcomes experienced by companies, and reported in the survey, was closer partnerships with other brands in order to outsmart the challenges raised by the war. Closer internal collaboration between finance, production, and logistics departments were also reported as a result of the conflict.
The biggest challenge for companies is the prices of raw ingredients, especially edible oils, and the availability and supply of oils. In particular, sunflower oil was reported as becoming very scarce and alternatives are having to be sourced quickly. (Ukraine is the world’s biggest exporter of sunflower oil.)
“It’s clear for all of us to see that the war is having a devastating effect on the lives of many people in Ukraine,” said Stephanie Jaczniakowska-McGirr, international head of food industry and retail at ProVeg, said. “The war has also had a major impact on the plant-based sector, which is facing challenges in terms of ingredient supply, although we know that this will affect the food industry as a whole and not just plant-based companies. It is good to see that companies are joining forces to overcome these challenges,” she said.
“These survey results are important to us in order to better inform proposals directed at policymakers, thus ensuring that the plant-based industry receives the support it needs,” she added.
A total of 31 European companies in ProVeg’s network from 14 different countries responded to the survey between 1-20 April. The key findings were:
- 50% of respondents reported working more closely with other brands, customers, and internal staff.
- 61% think that the crisis will accelerate the green energy transition.
- 61% reported higher prices for raw ingredients.
- 61% reported a shortage of raw ingredients.
- 64% reported higher energy and transportation costs.
- 64% reported a lack of availability of transport and truck drivers.
- 59% thought higher ingredient and energy prices would lead to an increase in product prices.
- 69% said that it will remain difficult to recruit skilled workers for the sector.
Survey participants were also asked whether they thought their companies would need government help within the next 3-36 months in order to help them tackle the challenges created by the Russian invasion of Ukraine. A total of 25% of companies said that they would require government support, while 29% said they might require support.
ProVeg is making three recommendations in light of the ongoing war in Ukraine:
- The EU continues to implement the Farm to Fork strategy to support sustainable food production in these challenging times;
- “VAT discrimination” across Europe towards plant-based alternatives to dairy products should end; and
- Government support for plant-based companies should be provided where needed.
Farm to Fork strategy
ProVeg International says it is closely monitoring the effects of the war on the plant-based sector, which it argues should form the backbone of the European food system of the future.
Crucially, the NGO wants to ensure that the war does not lead to the watering down of the EU’s pioneering Farm to Fork strategy, which offers a viable pathway to creating a sustainable food system and protecting biodiversity.
However, the European Commission has come under pressure to postpone implementation of the strategy and make more land available for farming in order to boost food production.
ProVeg believes that this is short-sighted. “In light of the impact of the war on the plant-based sector, we believe it is the right time to implement the EU’s Farm to Fork strategy to accelerate the transition towards a more plant-based diet,” Jaczniakowska-McGirr said.
“Enhancing and supporting the plant-based sector also holds the key to improved long-term food security, since it means that the grain that currently goes into animal feed will go directly towards human consumption instead,” she added.