Taming the Black Swan - A Secure Food Future
As the UAE just announced the re-opening of the country for tourism and international visitors on July 7th, John Defterios, looking back at the onset of the COVID 19 crisis, set the tone for the conversation with his very first question to the minister: "What is it like to deal with such a firestorm?", enquiring further with "What were your first instincts (about preparedness) when the shock came?". Using examples of supermarkets in other countries facing panic buying resulting in long queues and empty shelves within and how consumers in the UAE never had to feel such anxiety.
Her Excellency explained that each such event is a learning experience and ten years ago, when the global recession hit, we decided to implement different measures for a more resilient food system including the national stockpiles, the Food Security Alliance in partnership with private companies and the Food Security Office to develop a national food security strategy to be implemented by the Food Security Council - all steps put in place because of the previous crisis. COVID-19 putting all these measures to the test - specifically the strategic direction of "emergency and preparedness" - it also demonstrated that the measures are successful as no food shortages were felt by residents across the country. Now the scale of this current crisis brings its own set of challenges and opportunities to learn further and prepare for the inevitable next one.
Defterios then asked if this current crisis had revealed new vulnerabilities and what would be the plan for the next ten years. Almheiri said that while supermarket shelves have been well provisioned through the crisis, a lot of coordination happened behind the scenes to monitor food availability from exporters, identifying weaknesses in the supply chain, and partnering with airlines to make sure there would be no disruption. "Moving forward, the direction is definitely moving into ramping up domestic production using technology" adding that food security is not only a matter of supply, but should also concern the demand side. Consumer behavior should also aid towards achieving food security. Emphasizing the need for consumer not to overindulge and buy only what’s needed, "An example I use with my son is, when you throw away an apple, you also throw away the 70 liters of water that were used to grow that apple and bring it here." The minister finally added that the UAE is known for a very high calorie diet with low nutrients, and that now that people have spent more time at home and cooking, it is an opportunity to look into healthier, more efficient diets. Both food production and consumption behaviors need disruption to achieve sustainability on both fronts.
The conversation continued highlighting that in terms of consumption, the UAE government is data driven: Trade in the food industry is up 20% in the first quarter reaching 8 billion USD. The government noted a 25 fold increase in exports and re-exports boasting a reach of 3 billion consumers across the supply chain, comforting UAE in its position as a global hub for food trade. Some spikes in consumption for specific products have been noted, such as consumption of oranges which according to Her Excellency could be explained by people trying to enhance their immunity and increase their vitamin intake. Food waste has also been noted to decline as people are spending more time at home and may be more cautious about their spending. Another interesting trend is an increase of questions regarding growing production at home from residents looking to achieve a certain level of self-sufficiency.
On the topic of a de-globalisation that has been theorized and more recently observed in some parts of the world, John Defterios asked Her Excellency what this would mean for an economy such as the UAE, which according to HE the Minister of Economy Al Mansouri is one of the most globalised in the world, specifically in terms of food security. The UAE imports 90% of their food. "When we say we want to increase local production, it's because we want to decrease our dependency on net-imports into the country. Which doesn't mean we want to decrease imports. The UAE wants to continue its journey on being the global hub for food trade and agri-business and this is a core pillar as to why we are food-secure today. But as the journey goes and we understand the global issues that are happening with population rise, climate change effects, water depletion, desertification, and our habits... we want to make sure that we build the resilience and ramp up our domestic food production. On top of being a hub for food trade, we also want to become a hub of knowledge and technologies when it comes to hot, arid climates." Noting several similarities shared with Singapore, Almheiri also mentioned shared ambitions and objectives in terms of food trade and food production, as well as a close cooperation development between the two countries. "I also compare what we want to do with the Netherlands, being one of the smallest countries in the world as well as the second largest exporter of agricultural goods. How did they achieve that Technology? Likewise, we want to continue expanding our global supply-chain. It's part of our DNA."
John Defterios then brought up strategic partnerships with countries such as China and India as well as air links with Africa to ask whether food security as a matter was now being discussed in all such meetings. The minister confirmed that food security did become a priority especially over the past five years citing as an example the last GCC meeting in April where food security was actually the top priority area that was discussed.
The interviewer then gave voice to questions from the audience directed at the minister:
"What is the UAE’s plan to support local producers and SMEs after COVID-19? Is there a plan to keep them alive and able to serve the population?”
“This is one of our top priorities", answered the minister. "The cabinet approved a national committee for developing Agtech in the UAE which I have the honor to be leading with stakeholders from the government and from the private sector, and we are now working on a blueprint encompassing policy changes, regulations that maybe hindering changes that we want in AgTech and incorporating small and medium size farmers into this. We really need to transform the agriculture landscape in the UAE with technology available. Let's take a look at fish production in the UAE: We have recirculating systems which are lab-based systems that allow us to enjoy high-value marine fish now available in supermarkets at a competitive price. We are trying to push the bar with technology and we look at policies, incentives that we need to put in place to develop this sector even more. It's all in the pipeline and we hope that some announcement can be made within a few months.
"There is global foodtech challenge here, driven by Catalyst, so you're not only looking at protecting SMEs here but also looking after the "next generation".
Is this competition the real deal... is there something really good going to come out of it?"
The idea was to get the youth and entrepreneurs also involved, looking into how we can use technology to disrupt certain elements in the supply chain. We are not only looking at ways to grow food, we are also looking into waste management, logistics, anything suitable for an environment such here in the UAE. This global foodtech challenge was launched in September last year, developed from our office, together with Tamkeen in Abu Dhabi. We had over thousand entries and out of the 400 that qualified, we have identified twelve finalists and in September 2020, four winners will be announced. It is exciting to see the engagement from the community.
Going back to some of the audience's questions,
"Which products will be in need for imports in the near future?"
We started off our strategy with the "UAE food Basket" identifying which foods make sense to grow in the UAE, and which would make more sense to buy elsewhere. Grains, sugars, oils - these are the ones that make more sense for us to import and store here.
On a question regarding Almheiri's outlook on the hospitality and tourism sector, Almheiri responded that there is light at the end of tunnel and after the announcement of re-opening for tourists, it's an opportunity for the sector to rethink their supply chain and favor local producers for quality purposes, but also in regards of sustainability as there is rising awareness and rising support for organization that take such matters into consideration.
To support the hospitality sector and create domino effect across the value-chain, there is a need to create a stimulation and encourage consumption through awareness and measures to keep everyone safe.
Excessive use of packaging in food delivery or grocery shopping
"From a food security perspective, I would like to see how we can use food waste for packaging. I actually saw at the last edition of Gulfood, and it was amazing, how this company was using kiwi skin to make knives and forks. These are the kind of innovations that are fantastic to see because not only are we encouraging the circular economy, but that's actually something that is biodegradable and still have safety features as well. Another company in the US adds a layer around fruits and vegetables that increases shelf life maybe in three to five folds. These are the kind of innovation that we want to see and it is our duty as a government to facilitate and bring in such innovations.
AI, IoT and Blockchain - "AI is going to play a huge role, and its advantages already include applications of machine learning, improving inventory management by using forecasting engines with Ai, chatbots being able to streamline operational procurement, enhancing data robustness through natural language processing (NLP), also optimizing logistics by using driver-less vehicles and reduced labor cost while adding an element of environmentally friendly operations, reducing lead time as well. AI and blockchain will be creating a quantum leap in the efficiency of global food supply chain and we are already seeing these taking action."
Further on the topic of technologies –
"On the example of cellular agriculture, or cultivated meat, many people might think they shouldn't eat meat that is made in a lab, but thinking about the science behind it, you take cells from a living animal, put it in a bio-reactor, give the cell what it needs so it multiplies and grows like it would within the animal but you are in a way divorcing the product from the animal. So not using so much water, any arable land, the carbon footprint is much lower, but at the end of the day you are still getting a product that looks, feels and tastes like the real thing. That’s an area that is still quite new for us in the UAE, it's emerging mostly in the US. It started to pick up as a clean food. This is something that we need to make people aware of, how it is made. So cultivated meat, alternative proteins, algae, these are the kind of things we want to see in the UAE because we have the right environment and mindset for this direction.
A good repository for information related to food security in the UAE would be the ministry's website and more recently, a food research platform was established for people to find out what sort of research is being made in the UAE and mapping the universities and institutes involved with food research in the country.
Circling back with a question on whether it makes more sense to strengthen trade with neighboring countries as opposed to some who might be further afield for food imports, Her Excellency noted that the food security alliance does consider such parameters and a lot of background checks and due diligence is required prior to any investment. These parameters also include whether the partnership or investment makes sense from a commercial and business to business perspective. Moreover, something that was observed during this current crisis, many countries suddenly put up restrictions and not all such restrictions were announced with the World Trade Organization. When businesses got back to normal, it didn’t make sense to import back to the country when production is so far, but in times of crisis like what we have seen, we should be able to access those investments. So moving forward, people will look at how that country reacted during the crisis, and whether it makes sense to make an investment.
Stay tuned for more information about our online events. We look forward to seeing you live, 3-5 November at our co-located shows - GulfHost, Gulfood Manufacturing, The Speciality Food Festival, yummex Middle East and Private Label Licensing Middle East.