2024-09-26 06:06:30
Large companies from the food industry and experts from the executive power met their positions in the fifth forum of the campaign of “24 Chasa” and UBB for a sustainable future: “ESG in food production and the use of packaging. Challenges and Opportunities”
Businesses are ready to reduce plastic in packaging and create environmentally friendly and sustainable products, but consumers are not yet ready to pay more for them.
The need for more awareness, transparency, and innovations in technology are the major challenges facing the industrial sector in our country. However, there are possibilities and solutions.
The participants in the conference “ESG in food production and the use of packaging” united around this opinion. Challenges and Opportunities”. It was the next stage of the UBB and “24 Chasa” campaign for a sustainable future.
Deputy Minister of Agriculture Ivan Kapitanov, Dobromir Dobrev, executive director of Corporate Banking and Markets at UBB, top experts in the sector and owners of large enterprises in the food industry participated in the discussion. The leader of the discussion panel was Assoc. Dr. Marina Stefanova, Deputy Dean of the Faculty of Economics of SU “St. Kliment Ohridski”.
“The waste of food and the change in the way of packaging in the future, so that it meets the standards of the circular economy, are proving to be a serious problem for the world, but also for Bulgaria. The financing provided to the food production sector is more than 8% of UBB’s credit portfolio, or to put it in numbers – a little over BGN 1 billion, with the industries with the largest share being those that produce oils and fats, bread and bakery products and meat and meat products”, explained the Executive Director “Corporate Banking and Markets” at UBB Dobromir Dobrev at the opening of the discussion.
He emphasized that in the coming years one of the most regulated topics will be food packaging,
because even now business is having serious difficulties in implementing the directives on this topic.
The challenges facing the food industry appear to be numerous to date and the statistics are worrying as
in Europe alone over 10% of food is thrown away,
although our continent is considered relatively advanced in this regard. Annually, food waste in Europe reaches losses worth 130 billion euros according to last year’s data. In fact, humanity still throws away 1/3 of the food it produces that is intended for human consumption.
“Even if we leave the moral aspect and focus on the financial one – this is a serious resource that we lose every year”, stressed Dobrev.
The bank has been aiming to implement ESG in its sustainability strategy for years and the topic is one of the priorities for the institution. Therefore, every year it prepares and publishes its Report to the public. In terms of carbon footprint reduction, UBB has a more ambitious mission beyond reducing its own footprint. The bank aims for this to happen with all the businesses it finances. UBB has calculated the baseline values of the most carbon-intensive industries financed, then set targets for them in 2030 and 2050. The implementation of these targets is monitored every year.
Together with partners, UBB also launched a Sustainability Academy for small and medium-sized enterprises, in which the food and beverage sector is specially represented with a specialized module. As part of the ESG strategy, UBB takes care of increasing the financial literacy of children and students through financial literacy training, as our country is in one of the last places in Europe in this regard.
UBB also offers specialized products for financing sustainable development, such as only under programs with guarantee instruments
the resource provided until 2027 is for loans with a total value of BGN 1 billion
The food industry is one of the industries covered by so-called white papers – strategic documents containing policies and key trends related to sustainability. Dobrev explained that the analyzes include 8 industries for which regulatory requirements are expected, the bank’s loan portfolio is also considered from the point of view of physical risks and risks related to the transition to sustainability.
“The topic of food is of extreme importance for the future”, emphasized Deputy Minister of Agriculture Ivan Kapitanov. He emphasizes that without financing the sectors there is no way to move forward and have development.
“As we see, large companies are moving towards evaluating and reporting their activities in relation to the growing regulatory requirements for each company’s production and sustainability reporting. In order for such an assessment to be made, there must be transparency in the presentation of the food products, so that the end user can know what he is getting”, added Kapitanov.
On behalf of the Ministry of Agriculture, he confirmed that overcoming food waste is a priority policy not only for them, but also for the entire country. And that this is an issue that has yet to be regulated by law, assured Dr. Rosen Malchev, the chief expert in the “Food Control” Directorate of the Bulgarian Food Safety Agency (FAFSA).
This is a topic that is embedded globally, as well as in the UN circular economy program. Before the regulations, however, according to Malchev,
everyone in the chain needs to change their own behavior and attitude
Then it will be seen that people realize the meaning of the circular economy and do not act only under the weight of sanctions. At the moment, in our country, the processing sector is the best at dealing with the problem, the expert emphasized.
On behalf of the industry, a representative of MASTER-PIK – a company with over 20 years of experience in industrial catering – participated in the discussion. According to its owner Kolyu Kolev, whatever is done, when it comes to the production of ready-made food on such a scale, there are bound to be food residues. Therefore, the company’s team comes to the conclusion that it needs a new method in its work.
“That’s how we got to our partners in Belgium, from where we bought know-how, and for a year and a half we’ve had a factory for ready-made foods and meals. Through this technology, we have solved our food waste problems. Now it is cooked at a low temperature under vacuum, or the so-called sous vide. This gives us advantages such as quality and durability, we do not use preservatives, and the packaging is 100% recyclable”, said Kolev.
“The packaging regulation has been discussed at the European level for more than two years. Its main goal is to reduce their production and supply on the EU market, as well as to make them recyclable by 2030. It is no less important to reduce overpackaging”, the state expert in the Department of “Household, Biodegradable and Construction Waste” also drew attention ” to the Ministry of Environment and Water Eleonora Yurukova.
It was clear from her words that
the regulation is expected to be implemented in our country very soon,
and the aspects in it are several: requirements for sustainability and recycled content of packaging, re-use objectives, deposit systems and restrictions on certain packaging formats to be released in the EU.
“The regulation also gives the right to a 5-year derogation, scheduled with certain conditions, under which it can be applied in any member state, and we can take advantage of it if necessary”, said Yurukova.
According to the owner of “Delicates Zhitnitsa” Yosif Yakov, the business is still developing in terms of packaging and has a long way to go.
“The most important aspect for me and for us in building a sustainable future is consumer awareness. Regulations sometimes have a punitive value, but it is important for companies to have a motivating factor. Such a motivation is precisely the consumers – we want to see that they are looking for more sustainable and socially responsible products”, said Yakov. He shared that his company does not have such a strong ESG policy, but they are confidently walking this path. The company’s observations show that
the end user is still price sensitive
and more difficult to accept the more expensive and sustainable products.
“We did a project through which we tried to change the model and remove an unsustainable packaging with a sustainable one. This slightly increased our costs and, accordingly, this was reflected in the price of the final product, but minimally. We noticed a drop in sales and realized that it might be too early for that”, summarized the owner of “Delicates Zhitnitsa”.
Tsvetelina Nikolova, managing director of Katarzhina Estate, spoke about the challenges facing wine production in our country. Climate change and severe drought are forcing the sector to think about how to change in order to survive. Drought ruins the grape harvest, and this increases the cost of a liter of wine many times over, but the market price cannot be raised because of competition and standards. Nikolova pointed out that
per year, the subsidies per hectare of vineyards in Bulgaria are 20 euros and cover only 5% of the costs,
and for comparison he pointed out that in other parts of Europe it reaches 300 euros/acre. On the company’s list of goals by spring is to reduce the use of chemical fertilizers and pesticides, as well as better manage its water resources. They also aim to use automatic machines as replacements for disposable consumables.
In a special video presentation, KBC Group corporate sustainability expert Frederik Van Der Pere talked about the requirements of the EU Deforestation Regulation (EUDR) for the participants in the supply chain – operators and traders of 7 groups of raw materials and their derived products – palm oil, beef meat, soy, wood, cocoa, coffee and rubber. The regulation enters into force on January 1, 2025 for large companies, and for small and medium-sized enterprises – 6 six months later. During the discussion, experts from the Ministry of Agriculture and Food shared that there is still a dialogue about this regulation in Bulgaria, which are the ministries and their line agencies, within the scope of which its implementation falls.