The threat of climate change looms large over the food and beverage industry, from the farms where ingredients are grown to the final products on our shelves. This global challenge endangers supply chains, drives up expenses, and compromises food safety.
For smaller and mid-sized enterprises (SMEs), these risks are particularly pronounced, but so too are the opportunities. Taking climate action can build resilience against shifting regulations, consumer expectations, and global market pressures.
While agricultural production is a major contributor (up to 37%) of global emissions, a significant portion of the food system’s carbon footprint comes from processing, distribution, packaging, and transport. In these critical stages, SMEs are key players.
The global power of SMEs
Globally, SMEs constitute approximately 90% of all businesses and provide seven out of 10 jobs in emerging economies. In the UK, a staggering 77% of SMEs are involved in at least one supply chain relationship. They are the backbone of all commerce.
Fortunately, a growing number of businesses recognise that addressing climate change is not just an environmental imperative but also a sound business strategy. We’ve seen how minor adjustments can yield significant results. California-based Clif Family Winery, for example, successfully reduced the weight of a case of its wine by eight pounds by simply switching to a lighter glass bottle. This single change cut both transportation costs and the carbon footprint of each bottle by 40%, demonstrating that even small choices can create a powerful ripple effect of positive change.
Reducing emissions often directly correlates with cutting costs. Suma Wholefoods, a UK-based co-operative, optimised its delivery routes, trained drivers to minimise idling, and incorporated biogas trucks to meet its climate goals. These efforts reduced fuel use by nearly 50,000 litres.
In the same vein, Toast Ale, another UK SME, found an innovative way to lower its environmental impact by turning 3.9 million slices of surplus bread into beer since 2016. This creative solution has prevented 7.5 tonnes of carbon dioxide equivalent (tCO2e) from entering the atmosphere. These examples highlight that decarbonisation is not just a cost but a catalyst for innovation and greater efficiency.
The resource challenge
Despite these successes, many SMEs face a major obstacle: a lack of resources and expertise. A recent survey found 41% of SMEs believe they need industry-specific guidance or solutions to take more significant climate action.
For this reason, the SME Climate Hub has launched a dedicated Food & Beverage Sector Space, funded in part by a grant from Walmart. These free resources were developed in collaboration with small businesses and include a sector-specific action checklist to help track Scope 1, 2, and 3 emissions, along with courses on priority areas like reducing energy consumption and optimising logistics.
Any company that works with food and beverage SMEs should take note. For large corporations, a resilient supply chain is critical for maintaining competitiveness. Heineken, for example, lowered its Scope 3 emissions by 14% in a single year, in part by helping its suppliers adopt renewable energy and set their own science-based targets.
For large companies to achieve their Scope 3 emissions goals, particularly in the food and beverage sector, supporting their SME partners isn’t optional – it’s simply what must be done to create resilient, low-carbon supply chains.
To truly address emissions across the food sector, action must happen at every level. SMEs must be empowered and incentivised to seize the cost-saving opportunities that come with cutting emissions.
At the same time, large companies that purchase from SMEs need to make supply chain resilience a core part of their business strategy and actively partner with their suppliers on climate goals. By working together, the industry can leverage the influence of its largest players and the agility of its smallest, ensuring a stronger and more sustainable economy for all.
Pamela Jouven, director at SME Climate Hub
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