Speaking on Friday from the Oxford Farming Conference, First Milk chair Bill Mustoe unveiled his vision of the changes which will take place in supply chains around the world over the coming decades, and advised on the steps food and farming businesses will need to take to survive in a rapidly changing world.

Mustoe, who currently chairs the only UK dairy company still owned by farmers, is also owner of Roberts Bakery, based in the North-West of England, and cut his teeth during a long stint at Campbell’s Food company.

Opening his speech in Oxford on Friday, Mr Mustoe illustrated the dramatic changes that have taken place in recent years, from new technologies to the startling effects of a prolonged recession; he asked delegates, "Would any of us ever have thought Waitrose would do a brand price match? We are in economically tough times. Wherever we are, profits are down and margins are squeezed."

Changing demographics to change consumption patterns

The First Milk chair suggested that, as advancements in consumer technology continue apace, Social networking and mobile internet will hold evermore sway over consumer choice and brand awareness. He said peer to peer communication, online buying and recommendations will all form a major part of the commercial landscape in the near future; even now, a high proportion of smart-phone and tablet users have made purchases on their devices.

He added that, already home deliveries of foods are becoming the norm, and some houses in areas where online grocery shopping is common are now being fitted with outdoor cool storage boxes to facilitate deliveries. Although Mustoe's talk focuses on the food industry perspective, in other countries these advances in communication have led farmers and consumers to begin to interact with one another, shortening supply chains themselves and cutting out supermarkets and other intermediaries in the process.

In Greece in particular, where the effects of Europe's financial Crisis have been felt most acutely, computer-literate farmers have begun to establish more equitable, responsive and sustainable models of food distribution. Last year, farmers and activists in the North of the country came together to establish a direct link between families and farmers, ensuring lower prices for cash-strapped families and better returns for the farmers themselves.  

Ageing, more urbanised population

Increased urbanisation will also require new supply chain models, according to Mustoe. He said these new distribution infrastructures could include regional food distribution hubs. These hubs, would be the centres of food distribution for a rural region or city, shared by a number of producers, manufacturers and companies working collaboratively.  

He went on to suggest that major social and economic developments will also radically change consumption patterns. These include the change in demographic to an older population; consumers over 50 will soon represent the majority of the voting public in many countries. 

Emerging economies including China and India will also continue to rise in power. Mustoe posited that China could become the world's number one economy, overtaking the United States as early as 2017. In many growing economies, more disposable income has resulted in greater consumption of animal products.

Added to this, the effects of climate change, which are already being felt across the world, will exacerbate problems of food production and pressures on finite resources will necessitate the shift to more environmentally conscious methods of food production. The business leader added, “In every arena, the world in the future will be a more volatile place."

He said that, due to consumer awareness of these issues, "future success and sustainability will be measured simply by the trust consumers put in our industries to do the right thing." Mustoe acknowledged that, "Consumers are sceptical of big business; they are wary of green-washing but are unsure of what needs to be done and who needs to do it."

Although Mustoe painted a relatively utopian picture of agile companies surviving, based on their ability to use environmentally less damaging practices as a competitive advantage, and developing the power to transform and adapt to changes, evidence in the current climate is relatively scarce.

Although many large food businesses have funded research into means of adapting their businesses to the effects of climate change, experts talking at the Oxford Real Farming Conference, taking place across the High Street from Mr Mustoe's talk, argued a paradigm shift in food production is needed to adapt successfully.

Commenting on the future of food, Patrick Mulvaney of the UK Food Group said he hoped a new sustainable farming alliance could increase pressure on government to act on the findings of the IAASTD report, which was published in 2008 to provide insight into sustainable food production and an end to poverty. Mulvaney said small scale and biodiverse production systems and decentralised food networks have been shown to outperform more rigid ones envisioned by Mr Mustoe.

Contrary to Mr Mustoe's belief that industry will have a central role in proposing and enacting changes, Mulvaney and his colleagues at ORFC suggested that an agroecological approach is necessary for to create a sustainable future supply chain. The UK Food Group chair argued against "relying on industry for techno-fixes" and said moves towards creating a policy of agroecology "must not be co-opted by the [same]multinationals" responsible for the problems inherent in the current food system.