HonestFood: A 3rd Way for Putting Food on the Tables

By BBJ Staff

BBJ: In your CEO biography (see page 76), you stated your passionate belief in HonestFood. What is this concept?

Giacomo Pedranzini: HonestFood aims to change the food supply chain. Today there are two principal systems for getting agricultural products from producers to consumers. One is semiindustrialized conventional agriculture, and the other is organic farming. In my view, neither of the existing models can meet the food needs of a growing world population in a sustainable, long-term way. Neither guarantees a fair return and economic viability for all actors in the supply chain. Over the past decades, the price has become the sole cornerstone of market competition strategy. Therefore, we all, collectively, pay too high a price for cheap food.

I am convinced that the time has come to find a new way forward: we must find a good middle ground between industrial and organic farming and return to common sense. It’s time to change our mindset and put “quality at a fair price” at the heart of our business policy instead of “high volume at a low price.” How can we supply our consumers with food of sufficient quality and quantity without exploiting animals, destroying the environment, and flooding the shops with cheap but low nutritional value products? The HonestFood concept must take over from industrial agriculture the mission to guarantee a stable food supply for all humanity while ensuring a fair income for all supply chain actors. But we need to incorporate the commitment of organic farms to nature into our concept, with a particular emphasis on protecting the health of people, animals, and our planet.

BBJ: How did you arrive at these conclusions?

GP: In 2012-13, Hungary’s meat industry was in crisis. I kept thinking: what are we doing wrong? How can farmers and food producers struggle to survive in a country like Hungary, a paradise for agriculture? The bankruptcy of several competitors, who had always pushed down prices, made me realize: we collectively pay a high price for cheap food. It made me understand that the existing two models are inadequate to supply the planet’s growing nutritional needs. If we want a sustainable supply chain, we need to change.

BBJ: What do you mean when you talk about a sustainable supply chain?

GP: The production chain’s most sacred priority should always be human health. We must make healthy products and in such a way that their production does not pose risks to human health. After all, our diet critically impacts our health and life expectancy. We should also apply production techniques and technologies that do not endanger the ecosystem, do treat animals with respect, and guarantee that our natural resources can regenerate.

But there is another aspect of sustainability of the food supply chain that is barely discussed: economic and financial sustainability. We are talking about a sector with high exposure to vis major circumstances, such as weather, where prices are often highly volatile; thus, profit is not balanced. Sometimes a year of plenty is followed by two years of famine and vice versa. It is also a sector where, because of the low and uncertain profitability, it has been becoming increasingly difficult to attract young farmers; therefore, the aging of active farmers is a serious problem in the long run.

Volatility is not only harmful to the farmers. In the end, the consumer is paying the price. Too high prices deprive the poorest and most vulnerable strata of the population of food. Therefore, guaranteeing fair prices, partially by limiting volatility, is in the common interest of consumers and producers.

The distribution of profit is unequal in the supply chain. And the actors who are the weakest links, the farmers, breeders and craftspeople, are the most vulnerable. There was a famous case in Italy, which discovered that the income farmers gain from tomato sauce, sold at a shelf price of around EUR 1, was only about eight cents! Several good initiatives restrict unfair