Preamble: Food processing aims to make food more shelf-stable, tastier, safer, digestible and nutritionally more available. It also helps plug demand-supply gaps across geographies thru transportability. Beyond population increase, these real positives are making it expand continuously. Additionally, it provides employment on a large scale (as all manufacturing tends to do) and earns revenue for the government that enables spends on infrastructure, security, health and education.

On the flip side, all processing directly or indirectly consumes fossil fuels (whose stocks can only diminish) and emits green-house gases initiating climate disasters. This is already mandating efficient use of renewable energy in processing, apart from transport. Processing additionally, pollutes all three elements of immediate environment (land, water, air) and loads costs leading to inflated consumer prices. In some cases, there is alarming depletion of ground waters and reduction in the nutritive profile of foods. It sometimes developes of harmful chemicals, e.g. development of carcinogenic acryamide during high temperature frying of starchy/sugary foods and of trans fatty acids during hydrogenation of edible oils. These facts point out that food processing has ‘net’ rather than ‘absolute’ benefits, which can be enhanced by –

• reduction in adverse effects and increase in favourable ones, and,
• reduction in the quantum of processing per se’.

Note that 1. We have seen the benefits of processing in terms of products in the last post. 2. Here we have taken up the dark side of processing. 3. In the next post we pick up the positive thread again to talk about some elegant food processing technologies that give us some delightful and even potentially life-saving products.

Thus negatives are sandwiched between two positives. 

The consumer-marketer dynamic and proliferation of processing: The advent of ‘consumerism’ in the second half of 20^th century was in tandem with the concept of ‘free markets’. Ideally, resources were meant to migrate to their most efficient users and deliver delightful products to the consumer at competitive prices. Consumer was encouraged to be demanding and choosey; understandably, she obliged gleefully. She demanded more and better and cheaper and the inevitable increase in population amplified the need for more and more processing. This was and continues to be the demand side of food processing. This applies to FMCG in general.

On the supply side, such deliveries are not possible without massive ‘economies of scale’, spending on R & D and a basket of ‘profitable products’ to cross-subsidize the ‘thin-margin’ popular products.

Entrenched businesses in consumer-facing sectors expanded and new ones with access to capital migrated from adjacent sectors. Thus large and powerful corporates came into existence. These general phenomena applied to food processing as well. Though initiated in the west, this phenomenon inevitably drifted into India as well, towards the end of the century.

Marketers, as corporates, can never ignore their responsibility to the share-holders who must get the return on their investment. Thus ‘value for money’ to the consumer cannot be always sustained unconditionally. Highly talented and committed advertising experts could persuade the consumer that she also ‘needed’ aerated brown beverages, moulded bar chocolates and chocolate-coated wafers, versions of flaked corn for breakfast, olive oil, noodles, brown granular beverage powders to make milk tastier and more nutritive etc.

The distortion of the value proposition in favour of the marketer is particularly noticeable in a developing economy like India. In a limited sense, David Ogilvy’s advice that consumer should not be taken for granted is being ignored successfully in some cases. Since the consumer has the ‘freedom of choice’ and the marketer, ‘freedom of communication’, cases of marketers being hauled over the coals for exploitative ways are rare. However, there have been green shoots of change.

With increasing focus on accountability, strong public activism and in response to ‘market forces’, marketers are being forced to continuously improve their value proposition. In some cases, consumer is being co-opted into marketer’s social and environmental contributions by buying specific products. In the meanwhile, the stunning array of food products on mall shelves and organized retail stock warehouses in India is a success story that cannot get bogged down in correcting stray aberrations. Jostling for space on shelves with MNC products are products from home-grown upstarts. Stacked flat potato chips in a cylindrical carton-shell, a popular premium snack from a mammoth US MNC, are now also made in Rajkot in Gujarat as a separate brand, appropriately called ‘Stax’!

This combination of demand pull and market push – moderated by ‘market forces’ – diversified and scaled up processing of all kinds everywhere until its devastating effects began to upend life as we knew it. As a part of the mix, food processing is obviously playing its negative role. But the ‘taint’ has to be allocated in inverse proportion to essentialness which needs to be graded.

Hierarchy of need of processed foods: Total volume of consumption decreases as we go down the following classes:

1. The essentials: We cannot do without fresh fruits and vegetables, green spices, cereals, pulses or lentils, beans and legumes etc. which are nature’s gifts. They have negligible fuel consumption and pollution potential which is a relief because their demand is large and largely inflexible. We can also not do without processed cooking inputs like edible oils, milk, salt, sugar, ground plain and compounded spices etc. which, being ‘essential’, constitute a ready and expanding market. This attracts competition and keeps the prices in check, aided by regular government intervention. But the negatives of this second sub-category are not negligible and their volumes are a worry. 

Of the processed essentials, edible oils have the maximum potential for such innovation and a devoted post is planned for examining the scope of limiting their processing.

2. The desirables: Bread, butter, dairy ghee, cheese, brown beverage powders, ice creams, snack foods, honey, jams, biscuits and cookies, breakfast cereals, noodles etc. are increasingly desired by an enlarging number of people. They are the attractive ‘demographic’ for an increasing number of marketers. Their volumes are smaller but the margins, better. All of them have varying but non-trivial fuel consumption and pollution potential and carbon footprint.

3. The optionals: Moulded chocolates, chocolate-coated wafers, aerated brown beverages, hydrolysed protein-based fortified beverage powders, brown milk-colouring beverage powders and dehydrated fruit powders are products for the top of the pyramid, deriving their commercial sustenance from the margin per unit rather than volumes. Persuasive and even manipulative marketing tends to increase those volumes. They represent extensive processing and hence have a large ‘negative footprint per unit’ but the lack of volumes relegates them to a non-priority area except the excessive ground water consumption per litre product in case of aerated beverages. Not surprisingly, their marketers have themselves read the writing on the wall and are diversifying into the enticing profitable categories. At the same time, this category cannot be denied the right to exist and grow in a democracy where the consumer is free to choose.

Now, then,  the details of the negatives of food processing.

Loading of costs and jacked up consumer prices: A simplified but valid model for the cost of production of a processed food is:

Cost per unit = (cost of raw materials + cost of energy including fuels + cost of material processing inputs, if any + cost of maintaining the facility including the people + cost of packaging + cost of warehousing at the plant + cost of complying with local pollution control and other statutory requirements) –  (realizable price of co- and by-products).

The more extensive the processing, the more the cost at the manufacturing plant. And then, there are the costs of delivering the products to the consumers spread all over the country, the applicable taxes and profit for the stake-holders. Obviously, these costs come from the consumer’s pocket as the ‘prices’.

Environmental impact of industrial food processing: All processing requires electrical power and heat in some form or the other and both the categories of energy conventionally come from fossil fuels like coal, lignite, natural gas, petroleum gas, diesel and kerosene which are non-renewable and release green house gases into the atmosphere.  Hence ‘hyper-processed’ foods like moulded chocolates, salty crackers, biscuits and cookies, burgers made from TVP’s (the ‘vegetable’ proteins), etc. have significant fossil fuel and greenhouse gas footprints. This is obviously a double whammy: non-renewables get depleted and the product of their burning – greenhouse gases – build up.

The campaign to shift to renewable energy has started in earnest, but  the path of their energetic adoption uniformly across the world has been bumpy. However, this is mainly a governance issue outside the purview of consumers and marketers. Hearteningly, the steadily reducing cost of solar-source electrical power (presently, at a fraction of the fossil fuel power) and fast increasing availability mean that the contribution of energy to processing cost is coming down. In a competitive market, this can only mean lowering prices to the consumer. This virtuous scenario of reduction in costs augurs well for the future.

Non-environmental impact of industrial food processing: Food processing also has some other disadvantages:   (i) The loss of nutritive value and, in some cases, development of harmful substances during processing, e.g. the carcinogenics produced during high temperature frying of potatoes as in French Fries and the development of trans fatty acids during hydrogenation of oils which are carried into everything made from them. (ii) Depletion of fossil fuels. (ii) Disproportionate depletion of specific natural resources e.g. the worrying depletion of ground water levels in some states of India because of excessive aerated brown beverage production. (iii) Distortion of consumer priorities, e.g. preference for a cola drink over a glass of milk, instant noodles over a bowl of oats with vegetables or pizza over paneer paratha. Consumer is not always smart and David Ogilvy was probably just being a smart advertiser in calling her ‘not a moron’!

Obviously, processing in general rather than of food alone, has these negatives. Processing emerges and strikes root because of compelling reasons. Thru directed and committed research, we can only –

• reduce processing wherever possible
• reduce costs thru material and energy conservation
• increase the share of renewable energy in total consumption
• decrease environmental impact thru intensive pollution control and
• educate the consumer about finding the ‘sweet spot’ of her processed food requirements.

Easier said than done but, as a commercial says, it will not happen in a day but one day it will happen. And, obviously, this is a moving target.

Next post: 

Compelling cases for processing: Part I (Fruits and Vegetables)

(Read ‘disclaimer’)