The Italian Market of Plant Products: a short-lived fashion or a new market segment?

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Corso di Laurea Specialistica in Economia e Gestione delle Aziende International Economics and Management

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Prova Finale di Laurea

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“The Italian Market of Plant Products: a

short-lived fashion or a new market segment?”

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Relatore

Prof.ssa Mauracher Christine

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Laureando Fanin Giovanni Matricola 842510

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Anno Accademico 2013/2014 

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Università

Ca’ Foscari

Venezia

Dipartimento

di Economia

e G e s t i o n e

delle Aziende

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“The machine does not isolate us from the great problems of nature but plunges us more deeply into them”

Antoine de Saint Exupèry

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Index

Introduction 1

1. The Literature Background 7

2. The Evolution of Consumer Behavior 12

3. The Global Scenario in 2050: a new Malthusian Trap? 19

3.1 Expected Population in 2050 21

3.2 Future Urbanization Trends 29

3.3 Future Prospects for Nutrition 35

3.4 Land Availability in 2050 39

3.5 Water Availability in 2050 42

3.6 Agricultural Yields in 2050 45

3.7 Food Production in the Next Forty Years 47

3.8 Expectations for 2050 50

4. Plant Protein Sources 58

4.1 The History of Vegetable Proteins 64

5. The Italian Market of Vegetable Proteins Products 68

5.1 Market Value Analysis 71

5.2 Market Shares Analysis 76

5.3 Volume of Sales Analysis 81

5.4 Package Volumes of Sales Analysis 85

5.5 Price Variation Analysis 88

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6. Consumers’ Attitude Towards GMOs 96

Conclusions 101

Database Figures i

Market Variation Analysis i

Market Share Analysis ii

Market Volume Variation Analysis x

Packages Purchased Volume Variation Analysis xi

Price Variation Analysis xii

Distribution Channel Variation Analysis xiii

Bibliographic References xiv

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Introduction

Proteins are polymer chains made of amino acids that represent essential nutrients critical for growth and maintenance of the human body. Next to water, proteins represent the most abundant substance in human body: not only they are one of the building blocks of the body tissue and a fuel source for cellular metabolism, but also they represent a fundamental component in hormones, enzymes, blood cells and antibodies. This is the reason why all the living creatures must assume proteins during their life.

Despite the critical role proteins play in life, differently to many other mammal species, humans are forced to introduce proteins through their diet in order to synthesize those essential amino acids that can not be biosynthesized by the human body (Hermann, 2013).

When people think about proteins, they usually think about meat. Actually this is a misleading heritage and a false stereotype of the past. In fact, both plant and animal foods contain proteins, even if in different percentages and compositions. Animal-derived foods, like meat, fish, eggs, and dairy products, are large sources of proteins, but also plant foods are, despite their protein content is not completed. Specifically, differently from animal proteins, plant proteins contain only some of the nine essential amino acids that humans cannot self-synthesize. As a consequence, people have to combine different vegetable sources together in order to ensure the adequate intake.

Nevertheless, recent studies and scientific analyses have confirmed that 1

plant proteins could be the answer for feeding a growing world population in the next future. Experts see this shift as necessary in order to avoid all those problems related to malnutrition, starvation, health and also environmental sustainability, at least in part.

See later for citations.

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According to a recent study (Jägerskong and Jønch-Clausen, 2012), it seems very likely that the world’s population may have to switch almost completely to a vegetarian diet over the next 40 years in order to avoid catastrophic food shortages. This new theory is based on the fact that, today, humans derive about 20% of their protein needs from animal-based products. Unfortunately, this value may need to drop to just 5% in order to feed the 9,5 billion people expected to be alive by 2050.

More in details, the issue highlighted by the two scholars is related to water consumption, considering that, in order to produce the a given quantity of proteins from animal sources, the water consumption is 5 to 10 times higher than using vegetable sources.

Also the Barilla Center for Food and Nutrition (2012), the corporate think tank foundation of the worldwide known Italian pasta-maker, is stressing the public opinion with the concept of a sustainable diet. Consumers have to be more aware of their food choices, not only in relation to their own health, but also considering the environment, given the ever stricter bond between man and the nature. As a consequence, in order to meet nutritional needs of a richer, growing, more urbanized world, consumers must become used to new sustainable eating habits.

Out of this trend, the Barilla Foundation has proposed the Food and Environment Double Pyramid Model (Figure 1), which reinforces the paradigm of eating healthily in a sustainable environment.

This model demonstrates that an healthy, mediterranean style, diet is not 2

only healthier, but it also embodies a sustainable attitude towards the environment. In fact, looking at the food pyramid of the model, people should eat little red meat and, oppositely, abound in fruits and vegetables, which are larger sources of fiber and contribute to the achievement of a sense of satiety. Accordingly, looking at the environmental side of the Double Pyramid,

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red meat should be avoided also because it has a very high environmental impact, while the environmental foot-print of fruits and vegetables is negligible.

Figure 1: THE FOODAND ENVIRONMENT DOUBLE PYRAMID MODEL

Source: Barilla Center For Food and Nutrition

The environmental issue related to meat consumption is an hot topic also for the world-wide known scientific magazine “Science”, which already in 2012 published an article by Sid Perkins titled “There’s Cow in Your Smog” . The 3

author explained that the results of a study performed in South California by the University of Boulder, blame cows for smog and not cars, as the large majority of common people think. The problem is related to cattle wastes in the area , which release ammonia in the atmosphere at levels between half 4

and three times the quantity released by all the car in the same region . This 5

The article is available at: http://news.sciencemag.org/climate/2012/05/scienceshot-theres-cow-your-smog

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The study estimates the number of cows in the area of South California at around 300.000 units in the

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period analyzed.

The study estimates the number of cars in the area of South California at around 9,9 million units in the

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ammonia, once in the free atmosphere, reacts with the nitrogen oxides, another polluting agent, producing ammonia nitrate, one of the worst component of smog.

Back to the Barilla’s Double Pyramid, the educational nature of its theory is well supported by a series of scientific publications.

Among them, the most impressive is the following study (Eshel and Martin, 2005). Starting from the the results published in 2000 by the United Nations-sponsored Intergovernmental Panel on Climate Change (Houghton et al., 2001), which states that “there is new and stronger evidence that most of the

warming observed over the last 50 years is attributable to human activities”

and that “the balance of evidence suggests a discernible human influence on

global warming”, the two authors analyzed GHG emissions consequence in 6

people’s diets. Using previous studies and mathematical approaches applied to the American population, they were able to calculate that, while for personal transportation the average American uses from a minimum of 4.284.000 kcal/year to a maximum of 17.136.000 kcal/year, for food the average is roughly 10.080.000 kcal/year considering only fossil energy consumption and thus the sole CO2 emissions.

Moreover, the paper analyses different greenhouse gas emissions generated by the same gross caloric consumption but obtained from different food 7

regimes, a plant-based and an animal-based . The conclusion is that a 8

person consuming an animal-based food regime causes the emissions

Green House Gases.

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The gross caloric consumption is the sum of the energy consumed for a specific physical activity plus the

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energy continually consumed for keeping the body alive (resting metabolism). In this case, The caloric intake is calculated for the year 2002 in the US The actual per capita food supply data are summarized in the Food Balance Sheet provided by FAOSTAT and available at: http://faostat3.fao.org/faostat-gateway/go/to/browse/ FB/FBS/E

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(direct and indirect) of 1.485 kg CO2-equivalent above the emissions

generated by a vegetarian diet (see also Duchin, 2004).

In conclusion of this brief introduction, it is important to point out the reasons that stand behind this dissertation. Indeed, at the baseline there is the curiosity of the author in understanding the reasons behind the outstanding evolutionary path plant products have experienced in recent years, moving 9

from a niche market exclusivity of vegans and dieters, to the mainstream consumption standards and habits of an ever enlarging share of the world population.

Consequently, the aim of this dissertation is to analyze and to understand the recent trend of this market in order to sort out, whether or not, plant produtcs could be an at-par substitute source of proteins with respect to traditional sources.

The analysis will be made from an economic and a marketing perspective, with a specific focus to the Italian market. In other words, this study will try to answer to the following question: will people (Italians) be used to eat tofu,

seitan or veggy burger in the next decades?

The answer will be given considering that a large part of the scientific consensus is asking for a radical shift in the average human diet, in order to face the expected population growth forecasts and the law of diminishing returns that governs agriculture.

As a first step, this dissertation will summarize the scientific literature available on the topic, highlighting the absence of a well defined lode of economic publications on it.

Subsequently, the analysis will move on outlining the possible scenario world will face by 2050 according the most prominent forecasts. More in detail, this analysis will regard the future population size and composition, the expected

The word “plant product” is used throughout the entire dissertation in order to indicate vegetable sources of

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level of urbanization, the future availability of arable land and water, without neglecting to provide a quick overview on crops and meat future availability, and finally focusing on the expected future trends in nutrition.

Afterwords, a brief description of vegetable protein products will be provided, listing all the different products currently available on the Italian market. In addition, and in order to better understand the trend experienced by plant products, a brief historical analysis will be presented.

Moving at the core of the topic, the dissertation will analyze the current market situation in Italy, in order to show which trend has being taken in recent years by this market segment.

To complete the analysis, the dissertation will deal with the issue on genetically modified organisms and the average European and Italian consumer attitude towards this hot topic.

In the conclusive part, after a short summary of the main findings, the author will try to answer to the initial question about the future of plant products market segment, by giving a personal opinion on that. 

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1. The Literature Background

Despite the exponential growth plant products have experienced in the last ten to five years in Western countries and the growing consciousness and 10

knowledge among consumers in relation to healthy food regimes and sustainable behavior, the scientific world seems to be a little late on this topic, as far as new marketing and economic publications are concerned. Indeed, the mainstream literature related to this topic mainly comes from nutritional and medical backgrounds. Accordingly, the publications found and briefly summarized in this chapter are not merely and strictly related to economics, but mainly to medical food, earth interactions, sustainable development and also ethnology.

In one of these publications, which is focused on the ethnological perspective of the issue, Mintz and Tan (2001) have examined the consumption patterns of soybean curd in Hong Kong, where the history of 11

soy foods are part of the traditional cousin since three millennia. The study clearly underlines the different approach to soy-based products the Hong Kong population used to have, if compared to the Western attitude. In fact, while in Hong Kong usually tofu is part of every dinner consumed at home and not for special occasion, regardless of whether a person is vegetarian or not, in the Western countries, tofu is mainly consumed by vegetarians or at the Chinese/Asian restaurant.

In the last decade however, as a consequence of globalization, soy-food consumption has changed significantly also in Hong Kong, with a sharp decline in local production and, oppositely, with a rise in soy-food imports. In spite of the fact that traditional practices still remain alive mostly among elder

In Asia this trend is not interesting given that vegetable sources of proteins are traditionally at the basis of

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everyday diet.

Literally the curd is the thick substance that forms in milk when it becomes sour. In this case it is uses as a

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people, modern packaging technology and the rise of supermarket chains have made the sale of soy products a global phenomenon.

At the end of this ethnographic study, Hong Kong appears to be the bulwark of traditions, and, at the same time, a microcosmos of larger global trends. In another study (Wansink et al., 2000), it was analyzed how product perceptions, taste and consumers behavior are influenced by the presence of a soy label on products sold in the US. The milestone from which this study was developed was the well-known marketing experiment “Pepsi Challenge” , through which it was demonstrated that visual cues can heavily 12

influence consumers’ choices.

Using the same approach, the authors have designed a 2 X 2 between-subjects experiment where soy label (“contains 10 g of soy protein” versus 13

“contains 10 g of protein”) was crossed with a health claim (“may help reduce the risk of heart disease” versus no health claim). Subjects were randomly assigned to one of the four experimental conditions.

The experiment demonstrated that soy labeling negatively influences consumer’s attitude towards the product. Interestingly enough however, it was also observed that healthy claims have no influence on the consumer. Following to this initial phase, with the aim of better interpret these dynamics, the two scholars segmented the test population into four groups: the taste-conscious, the health-taste-conscious, the natural food lovers, and the dieters. Recomputing the test, it emerged that, while soy labels and health claims negatively bias the taste-conscious consumers’ perceptions, oppositely they improve attitudes among health-conscious, natural food lovers, and dieters

The “Pepsi Challenge” refers to the taste and marketing experiment PepsiCo Inc. run from 1975 by

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encouraging shoppers in different public location to taste two blank cups: one containing Pepsi and one with Coca-Cola and then select which drink they prefer without knowing whether it was one product or the other. At the end of each experiment, the two brands were disclosed to the shopper. The results of the test leaned toward a consensus that Pepsi was preferred by more Americans. After this experiment was concluded, Coca

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consumers. Moreover, the two authors tried to provide a solution for foster soy food consumption among the taste conscious segment. It consists in advertising more other ingredients than soy, thus to override its negative perception, and in emphasizing more soy’s health-related claims in order to make US consumers more aware of soy’s potentials (Wansink, 1994, Wansink, Michael, 1996).

Continuing with the summary of the literature related to plant products, a survey made in the US (Wansink, Chan, 2001) found out that in 2001 there was still a large part of the US population that was completely unaware of soy’s health attributes, thus being unwilling to buy such products.

This discovery was obtained by surveying 770 US consumers on a national base, and asking them which were the most important factors that trigger the purchase and the consumption of a medical or functional food such as soy . 39% of the respondents were not aware of any health attribute of soy 14

food, and another 4% declared that soy has no health benefit at all. Oppositely, the remaining 57% of the surveyed population was already conscious about health consequences related with soy consumption and the large majority were considering soy products as rich in proteins (28%), with low fats (24%), and low cholesterol levels (11%).

Very impressively, just 5% of the people were aware that soy can reduce the risk of cancer.

Furthermore, the authors also suggest to link specific attributes with specific health-related benefits in order to increase consumers’ knowledge about soy properties and to boost soy products consumption.

Another analysis published by Carlssos-Kanyama and Lindèn (2001) provided an interesting case study analysis of how Swedish food consumption patterns have changed during recent decades. According to

In order to describe medical and functional food, usually it is used the neologism “nutraceutical”, which

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the study, meat consumption has increased in Sweden, even if forecasts expect a possible decline in meat consumption, given the fact that younger generations are much more aware of environmental and health issues, and are much more contaminated by foreign food trends and fashions. Interestingly, also the lack of time and cooking skills are accounted as other minor causes that will lead to a decline in meat consumption and an opposite increase in plant products purchases in Sweden.

Shifting the perspective and focusing on meat consumption (and indirectly to meat-substitutes like plant products), in his study Frank (2007) has adapted the concept of technological lock-in (David 1985, Arthur 1989) to the demand side of the economy, applying it to meat consumption.

Briefly, according to the author the consumers’ preferences and purchasing choices are locked-in to a specific path of consumption, even if this has a lower social utility for the consumer if compared to other alternatives. In the specific case of meat, the author asserts that consumers buy meat despite this choice is not Pareto efficient and the costs outweigh its benefits, given, for example, the environmental consequences meat consumption embodies. The author found out that the reasons why such an inefficient choice is made are both at individual and social levels. In the former level, there are factors like habits, tastes, culture and diet regimes. In the latter level, the author cites mass-media influence and proved consumption patterns. For example, this means that people buy meat instead of tofu or soy burger as a source of proteins mainly because they are not used to that and to their tastes.

More recently, the interest of the economic institutions has grown, thus increasing the level of attention of the general public to the topic, especially in North America.

Accordingly, during the Convention “Soy 20/20: Unlocking the Value of Soy Protein in Consumer Foods” hosted by the Guelph Food Technology 15

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Centre in 2007 in Ontario (Canada), Hunter (2007) presented an interesting 16

analysis about the consumption patterns of soybean-based products in the country.

These data, obtained through an online questionnaire applied by 1.008 Canadian adults, shows that 85% of the sample have changed their eating habits in the five years prior to 2007 due to health reasons. 73% of the Canadians interviewed have said they are prepared to pay more for healthy foods; 85% of them usually connected soy to food (19%) and to beverage (66%), and 25% of them claim they consumed soy as a food or beverage at least once a month. Moreover, 71% of the sample rated soy products as healthy, and 50% believe soy food could play a role in reducing obesity. Finally, 36% of the surveyed said they were interested in combination of soy and conventional food, thus confirming the willingness of the average consumer to change his or her food regime towards a more healthy and environmentally friendly one, without becoming a pure vegan.

These first data and survey results, together with all the papers and studies cited above, beside constituting the crucial bedrock for all the further developments of this dissertation, highlight the changing trends toward meat that the average consumer is experiencing. Oppositely, it also clarifies the raising key role vegetable sources of protein will play in the future, especially in western diet regimes.

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http://www.gftc.ca

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2. The Evolution of Consumer

Behavior

Taking and historical approach over consumer behavior, at the advent of the human race people hunted animals and gathered roots in order to respond to the need of feeding themselves and their families and thus to survive. In that period food had only a nutritional dimension.

Only in the twentieth century, with the coming of new technological innovations in agriculture, a larger share of world population was able to get free from the anguish of nutrition as a primary need, and food started to be associated with palate satisfaction and to acquire a more psychological and emotional dimension. Beside, food started also to be associated with health, not only of the consumer, but also of the environment, with consumption patterns that today are always more focused on sustainability and environmental-friendship (Pilati, 2004).

When speaking about consumer behavior, the classic marketing and economical literature introduces the concepts of segmentation, composition, de-structurization, polarization, time saving and energy waste of consumptions, together with the dine-in versus dine-out dilemma and diet convergence, which are all well known by the expert of the sector and thus are not more deeply explained in this dissertation. In any case, when analyzing new food consumption trends, it is important to remember that those kind of patterns are characterized by a special series of dynamics, where the most important turned out to be the Engel Law: the richer the family, the smaller the percentage share of income spent on food is. Today however, despite these concepts are still very actual, there are some interesting new consumption trends that could help in understanding if plant products will become a standard market segment or if it doomed to vanish in

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In recent years however, consumer behavior is dramatically changed. Consumers nowadays are much more aware and conscious about what they buy and, more specifically, about what they eat and drink. Regarding nutrition, consumers knows that several disputes and open contrasts exists 17

in the world (Barilla Center for Food and Nutrition, 2012):

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Fat versus thin: 155 millions people are overweight, while 146 millions suffer starvation;

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Too much versus too little: every year 29 millions people die because of food excess, and other 36 millions people die because of absence of food;

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Lack of resources for everyone: 1 million people have not access to food, and another 1 million people do not have access to potable water;

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Food versus feed: every year, 3 billions of farm animals consume one-third of the world agricultural production;

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Food versus energy: in the US, every year, 45% of the corn production is used for making fuel (ethanol), while the remaining 55% is devoted to food consumption.

In the light of that, the average consumer has developed a critical sense towards food purchases, which definitely affects its behavior at the supermarket or at the restaurant.

Out of this new behavior, a new market segment was born: that of the so-called “L.O.H.A.S.” (Lifestyles of Health and Sustainability). More in details, the acronym L.O.H.A.S. describes a population segment derived from the New Age generation, generally composed of a relatively upscale and well-educated people, who belong to a particular market segment related to sustainable living, ecological initiatives, social justice and health. From the

All the data provided refer to 2012

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marketing perspective, a L.O.H.A.S. person looks for products of high quality that are also virtuous and healthy, like functional food products . 18

Researchers have reported a range of sizes of the L.O.H.A.S. market segment. For example, the Worldwatch Institute reported that the US L.O.H.A.S. market segment in the year 2006 was estimated at $300 billion, approximately 30% of the total US consumer market. A study by the Natural Marketing Institute showed that in 2007, 41 million Americans (19% of the US population ) were included within the L.O.H.A.S. demographic, while in 19

Japan roughly 17 million adults or 12% of the population are L.O.H.A.S. consumers.

As a consequence, even if the average consumer is not a L.O.H.A.S., at the moment of choosing what to buy from the shelf of a supermarket she or he first checks the product label before to buy, thus to better understand what really there is inside.

Following this new trend, the European Union is replacing the current EU general labeling rules, which have been in place since 2000 via a labeling directive, with a new European Regulation on Food Information to 20

Consumers (FIC). It will enter completely into force in 2016.

Related to that, and to the attention Italian and European consumers already have on food labeling, according to a survey sponsored by Ulrick & Short 21

and submitted to 2.000 European consumers, 70% of them have confirmed they are already much more aware of their eating habits than they used to be, indicating that they are more likely to pay attention to what is in their

By definition, a functional food product is a food given an additional function, often related to

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promotion or disease prevention, by adding new ingredients or by increasing the quota of and existing one In this case the US population is calculated at 251 million people

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The EU Regulation n. 1169/2011 on the provision of food information to consumers changes existing

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legislation on food labeling including: mandatory nutrition information on processed foods; mandatory origin labeling of unprocessed meat, highlighting allergens in the list of ingredients, better legibility, requirements on

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food. The survey also highlighted that consumers demand simpler labels (75% of respondents) and fewer additives (45%), a tendency that is fully in line with the L.O.H.A.S attitude.

Shifting to the topic of consumer attitude toward plant products, consumers attraction towards specialty nutritional ingredients, the emergence of a health-oriented market segment, and consumers’ ongoing interest in protein consumption could be consider the new driving opportunities for the market. It has been estimated (Sloan, 2014) that globally, functional food/beverage sales topped $118 billion in 2012, up 5% from the previous year. The United States of America is the most important market, Japan the second-largest with sales of $22 billion, followed by the United Kingdom with sales of $8.08 billion and Germany at $6.4 billion. In 2013, China had the highest expenditure on health and wellness retail products, followed by Brazil, the United States, Russia, and Mexico. Indeed, with a fast-emerging middle class, the worldwide potential for functional foods/beverages is unprecedented.

As a consequence, meeting today's health and wellness food/beverage demands has evolved into a process of delivering health benefits through a combination of core whole and real food nutritional value and added specialty health ingredients. According to the US research company Hartman Group, in 2013 the top two attributes that made a food product good for health and wellness and thus attractive to the most conscious consumer segment were "ingredients added for special health benefits" and "higher in nutrients” . Moreover, the research company found out that healthfulness is 22

also a reflection of a combination of attributes like freshly-made, free-of, no additives, high quality, socially responsible, taking care, wellness.

According to a survey carried out by the International Food Information Council Foundation (2013), 58% of US consumers thought a lot about the All the data relating this survey can be found at http://www.ift.org/food-technology/past-issues/2014/april/

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healthfulness of their foods/beverages, 47% thought a lot about food ingredients, and 40% frequently turned their thoughts to food safety. Eight in 10 adults made some effort to eat healthier during 2012, and one-third (34%) made a lot of effort to eating better and healthier. Moreover, health influenced the food purchase decisions of 64% of consumers, up from 61% in 2012. In addition, the combination of nutritional benefits and culinary excitement are the key to consumers' decisions to try new healthy food products.

As a direct consequence, seven out of the top 10 best-selling new US foods/ beverages introduced in 2013 had a “healthier-for-you” positioning claim. Among them, the most frequent healthy claims were: “less/reduced calories” and “sugar-free”, together with “added fiber/whole grain”, “natural/organic” and “real fruit”.

What follows is a breakout of the top trends driving the market for foods and beverages (Institute of Food Technologists, 2014).

I. Growing demand for specialty nutritional ingredients; II. Clean label foods;

III. Real is now the most appealing food descriptor Right after fresh, organic and made from scratch;

IV. The rise of the protein market; V. Kid-specific products;

VI. Pharma foods (Nutraceutics); VII. Meatless meals;

VIII. Vegetarianism; IX. Managing weight; X. Performance nutrition.

What presented above however, is a general overview with a global focus. Nevertheless, considering only Italy, the perspective changes a lot. Nowadays, the Italian food sector is economically supported exclusively by

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data show a worrying situation, certainly linked to the effect of the economic crisis and the reduction in the purchasing power of Italian families (even rich families, since last year consumption of caviar and champagne plummeted). According to FIPE, the Italian federation of retailers (Federazione Italiana Pubblici Esercizi) (Sbraga, Erba, 2012), from 2007 and 2012 (i.e. the years of the crisis) showed a reduction in spending of € 11 billion (net of price variations). The cuts affected also consumer stables like bread and pasta, (-10% in value terms), meat (-8%), and cheese (-9,9%). Also the consumption of fruits and vegetable have dropped drastically (respectively -759 million euro and -835 million euro).

More in details, data show a decrease in food consumption, that is more pronounced in the domestic side than in the outside-home front. Finally, the market research shows that the only exception to this down-warded trend is the field of organic food segment, which continues to grow despite offering prices are higher than those of conventional products on average. This countertrend confirms the new consumer trend related to an healthier and more sustainable way of eating, which is shaping Italian consumer, despite the current economic crisis and the slumps of food consumption.

Considering altogether the new trends highlighted in the previous pages, the economic literature resumes them with the name “critical consumption”, a consumer behavior that shares many aspects with the L.O.H.A.S.’ segment. According to the definition (Centro Nuovo Modello di Sviluppo, 2011), the critical consumption is opposed to the impulsive consumption and it consists in buying a product not only on the base of its price and its quality, but also according to its environment and social impact. The consumer makes consumption choices according to predefined criteria, which are based on environmental sustainability, health and safety risks, animal welfare, fair trade, labour conditions, and human rights. Indeed, the critical consumer

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looks also at the supply chain behind the final products, preferring a product whose production respects sustainability principles. 

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3. The Global Scenario in 2050: a

new Malthusian Trap?

Before starting to present the core of the topic and the data analysis carried out, it is crucial to introduce and to understand the context in which the market of vegetable proteins-based products is expected to develop in the next decades. For this purpose, the following chapter will briefly describe the different sides of the paradigm expected to rule the World in 2050.

In his latest book called “Full Planet, Empty Plates: the new geopolitics of

food scarcity” (Brown, 2012), the President of the Earth Policy Institute

Lester R. Brown, sketches out new and, in some ways disturbing, scenarios for the so-called geopolitics of food: “The world is in transition from an era of

food abundance to one of scarcity. Over the last decade, world grain reserves have fallen by one third. World food prices have more than doubled, triggering a worldwide land rush and ushering in a new geopolitics of food. Food is the new oil. Land is the new gold”.23

According to the author, a future reduced water and land availability will bring the world towards food scarcity. As a consequence, the control of arable land and water resources is becoming critical in order to assure food security. In this era of tightening world food supplies, the new imperative for governments’ strategies is assuring food to the population in order to avoid riots and political unrests. In other words, food availability is a geopolitical leverage. As an evidence to that, Brown describes the phenomenon of land grabbing by food-importing countries, as a shelter against poor harvests and an increasingly volatile food prices.

Beside, land grabbing, the author’s theory of a new geopolitics of food is well supported by some recent events that completely transform the

Taken from: Brown, Lester R. 2012. Full Planet, Empty Plates: the new geopolitics of food scarcity. W. W.

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commodities business around the world. COFCO Group, the largest food processing, manufacturing and trading state-owned company in China, on the 28th_{of February 2014 agreed to buy 51% of Nidera BV, one of the world}

largest public company active in the grain business, with a volume turnover of about 33 million tonnes a year and an annual revenues of more than 17 billion dollars. Despite the value of the deal has not been revealed, Nidera is estimated to worth 4 billion dollars . One month later, on the 224 nd_{of April}

2014, COFCO announced also the acquisition of 51% stake of Noble Group Ltd. for 1,5 billion dollar. Noble is another agribusiness multinational company with sales of about 15 billion dollar in 2013 . 25

Clearly, the strategy behind these two acquisitions is related to food security and, in the specific case of China, the main aim is to secure procurement of agricultural raw materials for an ever hungrier and growing Chinese population. Indeed, given that China is the world’s biggest importer of commodities including cotton, rubber and soybeans, the two transactions will strengthen COFCO, and thus China, access to and direct control over Nidera’s and Noble’s agriculture assets overseas, and primarily in South America, the world’s top producer continent of agricultural commodities, in order to reduce China’s dependence to third-part market agents.

For certain aspects, the situation described above is similar to the so-called Malthusian Trap, the economic doctrine outlined by the English economist and reverent Thomas Robert Malthus in 1798 in his work “An essay of the

principle of the population as it affects the future improvement of society”

according to which, given that population was expected to grow at a geometric rate while resources according to an arithmetic one, such a difference in the two progressions would have inevitably lead to an imbalance

Full article available at

http://www.agrimoney.com/news/cofco-buys-control-of-nidera-fuelling-deal-24

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between resources, and in particular food, and the population. In other words, Malthus was convinced that the continuous production of resources was not able to sustain a larger population, because of the fact that an increasing number of people will produce proportionally less and less availability of resources to feed themselves (also known as the law of diminishing returns). As a consequence, the result of this theory is an inevitable progressive impoverishment and malnutrition of the world population: the so-called “Malthusian Trap”.

In order to fully comprehend the possible situation that the World will face in 2050, it is then necessary to explains all the factors that took part in this world-long equation: population, urbanization, nutrition, land availability, water availability, agricultural outputs and food availability as the most critical.

3.1 Expected Population in 2050

When analyzing long-term future population growth trends, the most prominent source of information is provided by the United Nations studies carried out by the Population Division of the Department of Economic and Social Affairs (2013). Its most recent Report draws a complete picture of 26

world population expected to live the world in the next forty to ninety years. In order to better understand the dynamics behind the final result of this report and to comprehend the consequences that the expected world population growth will cause on world diet paths and food habits, it is necessary not to look directly and exclusively to the final figures, but also to dig the numbers a little thus to understand where the major changes will occur and to comprehend the long-term trend and reasons behind them.

The 2012 Revision.

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Before proceeding, it is useful to clarify how the United Nations divides world nations:

I. More developed regions (MDC): comprise all regions of Europe, North America, Australia, New Zealand, and Japan;

II. Other less developed regions (OLDC): comprise all regions of Africa, Asia (excluding Japan), Latin America, the Caribbean, Melanesia, Micronesia and Polynesia less those nations considered as the least developed;

III. Least developed countries (LDC): include 49 countries in June 2013: 27

Afghanistan, Angola, Bangladesh, Benin, Bhutan, Burkina Faso, Burundi, Cambodia, Central African Republic, Chad, Comoros, Democratic Republic of the Congo, Djibouti, Equatorial Guinea, Eritrea, Ethiopia, Gambia, Guinea, Guinea-Bissau, Haiti, Kiribati, Lao People’s Democratic Republic, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Myanmar, Nepal, Niger, Rwanda, Samoa, Sāo Tomé and Príncipe, Senegal, Sierra Leone, Solomon Islands, Somalia, South Sudan, Sudan, Timor-Leste, Togo, Tuvalu, Uganda, United Republic of Tanzania, Vanuatu, Yemen and Zambia.

That being so, it is important to clearly point out that the People’s Republic of China is not ranked as a more developed country despite it is the world second economic power (International Monetary Fund, 2013), but as one of the other less developed country together with India, which today they account for a total figure of 2.6 billion people, 36,84% of the total population estimated to be alive in 2013. The same reasoning applies for all the countries usually accounted as BRICS.

According to the report, the world population of 7,2 billion that was estimated to live the planet in 2013 is projected to increase by almost one

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billion people in 2025, and to further increase to 9,6 billion by 2050 (Figure 28

3.1.1).

Figure 3.1.1: POPULATION OF THE WORLD, DEVELOPMENT GROUPS, SELECTED PERIODS 1950,

1980, 2013, 2050 (MEDIUMVARIANT)

Source: United Nations, Department of Economic and Social Affairs, Population Division: “World Population

Prospects: The 2012 Revision”, 2013.

Compared with previous estimations, the 9,6 billion number is higher mainly for two reasons:

I. The average fertility level has been increased in its absolute value despite the future trend is down-warded. According to the medium variant, global fertility will decline from 2,53 children per woman in 2005-2010 to 2,24 children in 2045-2050. Actually, in the more developed regions fertility is expected to grew from an current average of 1,66 children per woman, to 1,85 children in 2050. Oppositely, a sharp reduction is projected both for the least developed countries (from 4,53 to 2,87 children per woman) and the rest of the developing world (from 2,40 to 2,09 children per woman). As a consequence, expert expects fertility levels of least developed and developing

(millions) 1950 1980 2013 2050

More Developed Countries 813 1.083 1.253 1.303

Other Less Developed Countries 1.518 2.973 5.011 6.437

Least Developed Countries 195 393 898 1.811

World (total) 2.526 4.449 7.162 9.551

All the results presented in this chapter are based on the medium-variant projection. This scenario assumes

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a decline of fertility for those countries characterized by large families and, oppositely, a slight increase of fertility in those countries where the average family has less than two children. The report originally considers other two different scenarios, the high-variant and the low-variant, which are based on different fertility estimations. However, these two different scenarios are not considered in this dissertation.

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countries to converge to that of the more developing countries at the end of the century.

II. Life expectancy is forecasted to increase as a direct consequence of a rapid decline in mortality, moving from 47 years of the middle of the last century, to 76 years of 2050.

Analyzing the data then, what emerges is that almost all of the additional 2,4 billion people expected to be alive in 2050, are accounted as part of developing countries , whose population is projected to rise from 5,9 billion 29

in 2013 to 8,2 billion in 2050. Among them, population growth is expected to be particularly sharp in the least developed, whose population in 2050 is expected to be double of today level (from 898 million inhabitants in 2013 to 1,8 billion in 2050). As far as the remaining developing countries are concerned, experts expect a less dramatic population growth passing from 5,0 billion in 2013 to 6,4 billion 2050. In contrast, the population of the more developed regions is expected not to change substantially. This unbalanced growth is also shown by the percentage distribution of world population (Figure 3.1.2).

Figure 3.1.2: PERCENTAGE DISTRIBUTIONOF THE WORLD POPULATION BY DEVELOPMENT GROUPS,

ESTIMATEANDPROJECTIONS, SELECTED PERIODS, 1950, 1980, 2013, 2050 (MEDIUMVARIANT)

(percentage) 1950 1980 2013 2050

More Developed Countries 32,2 24,3 17,5 13,6

Other Less Developed Countries 60,1 66,8 70,0 67,4

Least Developed Countries 7,7 8,9 12,5 19,0

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In the more developed regions, by 2050 population will decrease by 4%, while in the least developed countries it will grow by 6,5%, with a net difference of more than 10 percentage points. In any case, those other countries accounted by the UN as the other less developed will continue to have the large population, accounting for 67,4% of the total world population in 2050.

As far as age is concerned, the combined effect of fertility decline and life expectancy increase turn out to be population aging (Figures 3.1.3 and Figure 3.1.4). According to the UN study, the world population aged 60 years or over in 2050 is expected to be 21% of the total population, while in 1950 it was just 8% of the total. Oppositely, the population aged 15 years or less is expected to decline to 21% in 2050 (today it accounts for 26% of the total population). As a consequence, in 2050 world population will mainly be aged 60 years or more (1,99 billion people) and between 15 and 59 years (1,6 billion people). The phenomenon of population aging will be much more evident in the more developed countries, where old population is expected to double by 2050, moving from a current value of 287 million people, up to 417 million. More importantly, in these countries in 2050 elder people will be nearly twice the number of children. Among the less developed countries then, the number of people aged over 60 years is increasing at the highest pace ever (3,7% per annum) and it is forecast to reach 1,6 billion by 2050. Interestingly, while the world population aged between 60 and 80 years will increase at 175% from 2013 to 2050, the category of people aged over 80 years will grow at the incredible rate of 241%.

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Figure 3.1.3: DISTRIBUTION OFTHE POPULATION OFTHE WORLD, DEVELOPMENT GROUPSBYBROAD

AGEGROUPS, 2013 (MEDIUMVARIANT)

* Data expressed as part of the 60+ category.

Source: United Nations, Department of Economic and Social Affairs, Population Division: “World Population

Prospects: The 2012 Revision”, 2013.

Figure 3.1.4: DISTRIBUTION OFTHE POPULATION OFTHE WORLD, DEVELOPMENT GROUPSBYBROAD

AGEGROUPS, 2050 (MEDIUMVARIANT)

* Data expressed as part of 60+ category.

Continuing with the analysis, the median age is another indicator of 30

population aging (Figure 3.1.5). At global level, the median age is projected to rise from 29 in 2013 to 36 in 2050. Of course, the median age is higher in those countries characterized by low fertility levels, like Europe, where the median age is expected to move from 41 year in 2013 up to 46 in 2050.

(percentage) 0 - 14 15 - 24 25 - 59 60+ 80+*

More Developed Countries 16,0 12,0 48,0 23,0 4,5

Other Less Developed Countries 26,0 17,0 46,0 10,0 12,0

Least Developed Countries 40,0 20,0 35,0 5,4 0,5

World (mean) 26,0 17,0 45,0 12,0 1,7

(percentage) 0 - 14 15 - 24 25 - 59 60+ 80+*

More Developed Countries 16,0 11,0 41,0 32,0 9,5

Other Less Developed Countries 20,0 13,0 45,0 22,0 3,8

Least Developed Countries 30,0 18,0 42,0 10,0 1,1

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Figure 3.1.5: MEDIAN AGE FOR THE WORLD AND DEVELOPMENT GROUPS, SELECTED PERIODS

1950, 1980, 2013, 2050 (MEDIUMVARIANT)

To sum up, world population is expected to grow to 9,5 billion people by 2050, with a large increment in the least developed countries, thus depicting a situation that will be the exact opposite of the present one. Moreover, world population will be much more aged, with the percentage of people aged 60 or more that will reach the percentage of young people aged less than 15 years by 2050 (Figure 3.1.6, Figure 3.1.7 and Figure 3.1.8).

Figure 3.1.6: WORLD POPULATION (LEFT AXIS) AND MEDIAN AGE (RIGHT AXIS) BY DEVELOPMENT

GROUPS, SELECTED PERIODS 1950, 1980, 2013, 2050 (MEDIUM VARIANT)

(years) 1950 1980 2013 2050

More Developed Countries 28,5 31,9 40,5 44,5

Other Less Developed Countries 21,6 20,3 28,7 37,6

Least Developed Countries 19,3 17,6 19,7 26,4

World (total) 23,5 22,6 29,2 36,1

Median Age (in years)

0 9,5 19 28,5 38

Population (in billions)

0 3 5 8 10 1950 1980 2013 2050

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Figure 3.1.7: PERCENTAGE DISTRIBUTIONOF THE WORLD POPULATION BY DEVELOPMENT GROUPS,

SELECTED PERIODS, 2013, 2050 (MEDIUMVARIANT)

Figure 3.1.8: DISTRIBUTION OF THE WORLD POPULATION BY BROAD AGE GROUPS, SELECTED

PERIODS 2013, 2050 (MEDIUM VARIANT)

Prospects: The 2012 Revision”, 2013. 

Population (in per

centage terms) 0 25 50 75 100 2013 2050

More Developed Countries Other Less Developed Countries Least Developed Countries

0 3 5 8 10 2013 2050 0 - 14 15 - 24 25 - 59 60+ 80+

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3.2 Future Urbanization Trends

Population growth analysis is not enough however in order to understand how the new geopolitics of food will change in the next forty years. Another critical factor to take into consideration is related to future urbanization levels, since an enlargement in the area devoted to cities will definitely translate into a reduction of arable land and thus into a ever constraining availability of resources.

Urbanization consists of all those migrations that occur mostly internally to each country, and through which people living in the countryside move to the urban areas . This trend, which has been happened for ages, is usually 31

associated mainly with industrialization, increasing income and with the sociological process of rationalization . 32

Also for this kind of analysis the most prominent source is the study carried out by the Population Division of the United Nations (2012). This report presents estimates and projections of how the current balance between urban and rural populations have changed in the last sixty years and how it will evolve in the next four decades.

According to this research and to what Satterthwaite (2007) stated in his paper, population growth is becoming largely an urban phenomenon concentrated in the developing world. Indeed, today more than half of the world population lives in urban areas. Nevertheless, not all regions are the same. For example, while for Asia the share of population living in the cities will be half by 2020, in Africa this process will take more time, and only by 2035 half of the Africans will live in urban areas.

Between 2011 and 2050, the population living in urban areas is projected to increase by 72% (+2,6 billion), passing from 3,6 billion in 2011 to 6,3 billion

Adaptation from the United Nations definition of Urbanization

31

In sociology, rationalization refers to the replacement of traditions, values, and emotions as motivation for

32

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by the middle of the century. Considering the data about population growth then, world urban areas are expected to absorb the very large majority of population growth by 2050 (2,3 billion people out of a total 2,4 billion total increment). As a result, the world rural population in 2050 will be lower by 0,3 billion inhabitants than today. These trends will be mostly driven by the dynamics in the less developed regions, which today represent 92% of the total world rural population.

Furthermore, also the population growth expected for urban areas are forecast to be concentrated less developed regions, whose population is projected to increase from 2,7 billion in 2011 to 5,1 billion in 2050 (Asia +1,4 billion, Africa +0,9 billion, and Latin America and the Caribbean +0,2 billion). Over the same period, the urban population of the more developed regions is expected to remain stable (Figure 3.2.1 and Figure 3.2.2).

Figure 3.2.1: URBAN AND RURAL POPULATIONS BY DEVELOPMENT GROUP, SELECTED PERIODS,

1950, 1970, 2011, 2030, 2050

Source: United Nations, Department of Economic and Social Affairs, Population Division: “World Urbanization

(billions) 1950 1970 2011 2030 2050

Urban Population

World (total) 0,75 1,35 3,63 4,98 6,25

More Developed Regions 0,44 0,67 0,96 1,06 1,13

Less Developed Regions 0,30 0,68 2,67 3,92 5,12

Rural Population

World (total) 1,79 2,34 3,34 3,34 3,05

More Developed Regions 0,37 0,34 0,28 0,23 0,18

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Figure 3.2.2: URBAN AND RURAL POPULATIONS BY DEVELOPMENT GROUP, SELECTED PERIODS,

1950, 1970, 2011, 2030, 2050

Despite the expected increase in absolute terms, forecasts expects the rate of growth of the world urban population to slow down in the next future, moving from an average growth rate of 2,6% per annum between 1950 and 2011, to a 1,7% annual increment in the period between 2011 and 2030, down to a further increment of just 1,1% from 2030 to 2050(Figure 3.2.3 and Figure 3.2.4).

!

0 1,75 3,5 5,25 7 1950 1970 2011 2030 2050

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Figure 3.2.3: AVERAGE ANNUAL PERCENTAGE RATE OF CHANGE OF URBAN AND RURAL

POPULATIONS BY DEVELOPMENT GROUP, SELECTED PERIODS, 1950, 1970, 2011, 2030, 2050

Figure 3.2.4: AVERAGE ANNUAL PERCENTAGE RATE OF CHANGE OF URBAN AND RURAL

POPULATIONS BY DEVELOPMENT GROUP, SELECTED PERIODS, 1950, 1970, 2011, 2030, 2050

(percentage) 1950 - 1970 1970 - 2011 2011 - 2030 2030 - 2050

Urban Population

More Developed Regions 2,09 0,89 0,52 0,29

Less Developed Regions 4,04 3,33 2,02 1,34

World (total) 2,98 2,41 1,66 1,13

Rural Population

More Developed Regions -0,48 -0,48 -0,92 -1,14

Less Developed Regions 1,74 1,03 0,07 -0,40

World (total) 1,36 0,87 -0,01 -0,44

Population Gr

owth (in per

centage) -0,75 0 0,75 1,5 2,25 3 1950 - 1970 1970 - 2011 2011 - 2030 2030 - 2050

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Interestingly, the average annual rate of chance of urban and rural populations will both decline at almost the same constant rate over the next years, thus confirming the declining trend of population growth expected in the same period.

As a consequence of these dynamics, at global level, urbanization is expected to rise from 52% in 2011 to 67% in 2050 (Figure 3.2.5). The more developed regions are expected to see their level of urbanization increase from 78% to 86% over the same period, while, in the less developed regions, this will likely increase from 47% in 2011 to 64% in 2050.

Figure 3.2.5: PERCENTAGE URBAN POPULATIONS AT WORLD LEVEL, SELECTED PERIODS, 1950,

1970, 2011, 2030, 2050

Figure 3.2.6 finally translates the analysis of how urbanization will evolve in different regions of the world from 2011 to 2050. Clearly, the two american continents and Oceania will be less affected by future urbanization trends given the already high level in 2011. Oppositely, Russia, the mediterranean Africa and the Arabic region will register the highest increments.

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(percentage) 1950 1970 2011 2030 2050 World (total) 29,4 36,6 52,2 59,9 67,2

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Figure 3.2.6: PERCENTAGE OF POPULATION IN URBAN AREAS, SELECTED PERIODS 2011, 2030,

2050

!

Figure III. Percentage of the population in urban areas, 2011, 2030 and 2050 2011 80 and over 60 - 79 40 - 59 20 - 39 Less than 20 2030 2050

Source: United Nations, Department of Economic and Social Affairs, Population Division: World Population Prospects DEMOBASE

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3.3 Future Prospects for Nutrition

The issue of food production for feeding a growing global population have always been a source of debate among scholars, institutions and the scientific world. History, however, has taught that food production grew faster than population in the last sixty years, thus increasing per capita consumption up to 2.770 kcal/person/day in 2003/2005 . From a purely 33

theoretical point of view, at aggregate level there is enough food product for everyone to be well-fed. Unfortunately, this is not the real situation, with malnutrition and undernutrition that still afflict millions of people around the world.

From the nutritional point of view, the future trends outlined in the previous paragraphs will inevitably force a change in diet habits, thus completely transforming the daily intake and its composition each person will consume by 2050. The key variable used for measuring and evaluating the evolution of the world food situation is food consumption , in terms of Kcal/person/day. 34

Since 1970 it has increased from an average of 2.370 kcal/person/day to 2.770 kcal/person/day in 2003/05.

For the future, current projections suggest that average daily energy availability could reach 3.070 kcal per person by 2050 (Figure 3.3.1 and Figure 3.3.2).

!

Source: FAO and USDA

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The term “Food Consumption” is considered as the national average apparent food consumption or

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Figure 3.3.1: PER CAPITA FOOD CONSUMPTION BY DEVELOPMENT GROUP, SELECTED PERIODS,

1970, 1980, 1990, 2006, 2015, 2030, 2050

Source: FAO (re-elaborated)

Figure 3.3.2: PER CAPITA FOOD CONSUMPTION’S FUTURE TRENDS BY DEVELOPMENT GROUP,

SELECTED PERIODS, 1970, 1980, 1990, 2006, 2015, 2030, 2050

Source: FAO (re-elaborated)

As already explained and as the chart shows, future expectations for food consumption forecast a less sloped increase from 2005/2007 to 2050 (+10,75% at world level) if compared with the one experienced between 1969/71 and 2005/2007 (+16,81% at world level) (Figure 3.3.2). This trend, together with the similar ones related to world population growth and urbanization, are expected to negatively influence agricultural consumption

(Kcal/person/day) 1969 1971 1979 1981 1989 1991 2005 2007 2015 2030 2050 Developed Contries 3.138 3.223 3.288 3.360 3.390 3.430 3.490 Developing Countries 2.055 2.236 2.429 2.619 2.740 2.860 3.000 World (average) 2.373 2.497 2.634 2.772 2.860 2.960 3.070 Kcal/person/day 1.800 2.250 2.700 3.150 3.600 1969/1971 1979/1981 1989/1991 2005/2007 2015 2030 2050

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Analyzing more in details the data, the higher increment in per capita food consumption have occurred and will occurred among the developing countries, given that developed ones had already high levels of per capita food consumption.

However, the expected production increase would not be sufficient to ensure food security for everyone. Undernourishment in the developing countries 35 36

(expressed in world population terms) could fall from 12,5% in 2005/07 to 3,5% in 2050, meaning that still 318 million people would be still undernourished in 2050 (Figure 3.3.3 and Figure 3.3.4).

Figure 3.3.3: INCIDENCE OF UNDERNOURISHMENT, DEVELOPING COUNTRIES, SELECTED PERIODS,

1990, 2006, 2015, 2030, 2050

Source: Alexandratos, N., Bruinsma, J.: “World agriculture towards 2030/2050: the 2012 revision”, 2012, ESA Working Paper No. 12-03. FAO, Rome.

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1990/1992 2005/2007 2015 2030 2050

Million People 810 827 687 543 318

Percent of Developing Countries’

Population 19,7 15,9 11,7 7,9 4,1

Percentage of World Population - 12,5 9,4 6,5 3,5

The term “undernourishment” is used to refer to the status of persons whose food intake does not provide

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enough calories to meet their basic energy requirements. Actually, a threshold level is not provided since calculations consider different parameters (age, sex, total population, agricultural products and trade) and thus there are different thresholds. The term “undernutrition” denotes the status of persons whose anthropometric measurements indicate the outcome not only, or not necessarily, of inadequate food intake but also of poor health and sanitation conditions that may prevent them from deriving full nutritional benefit from what they eat (FAO, 1999: 6).

Here the word developing countries comprehends all world countries except the developed ones. Indeed, it

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Figure 3.3.4: INCIDENCE OF UNDERNOURISHMENT, DEVELOPING COUNTRIES, SELECTED PERIODS,

2006, 2015, 2030, 2050

Source: Alexandratos, N., Bruinsma, J.: “World agriculture towards 2030/2050: the 2012 revision”, 2012, ESA Working Paper No. 12-03. FAO, Rome.

Increasing food consumption has always being accompanied by significant structural change in nutrition habits. With the rise of per capita food consumption, diets have moved towards livestock products, vegetable oils, etc. and away from staples such as roots and tubers. Today, however, especially in the most developed countries, this trend is reversing, with a sharp rise in vegetarian food consumption (see later).

When speaking about diet transitions, it is important to keep in mind culture and religion, which heavily shapes these transition, like in India, where there are taboos on cattle meat, or in the Muslim countries, where the religion forbid pig-meat consumption.

Diet transitions have also medical impacts. Shifting towards energy-dense diet regime, high in saturated fat, sugar and salt could generate an increase in diet-related diseases, like obesity in western countries.

To briefly sum up, over the longer term significant progress can be made in

Per centage of Under nurished People 0 3,25 6,5 9,75 13 2005/2007 2015 2030 2050

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3.4 Land Availability in 2050

In the equation of food security, food demand, together with nutrition and the caloric intake, is just one part of the system. Opposite to the demand side, there is the supply side, which in turn is influenced by many aspects like land and water availability, future yields and agricultural output. All these factors must be compared and opposed to population growth and nutritional changes in order to have the complete picture of how the world will be by 2050. All those factors will be analyzed in the next paragraphs.

In the very large majority of the mostly used economic models, land is always considered as a constrained input, thus excluding any possibility to increase the quota of fertile land devoted to agricultural production. This is reaffirmed also by the estimations in this paragraph. Indeed, land increment expected by 2050 is of just 70 million hectares out of 13 billions hectares currently used (GAEZ, 2011). The reason of such a small increment is related to the fact that spare land is often not accessible because of lack of infrastructures or because it is located in remote areas, thus making its exploitation for agricultural purpose uneconomical. In addition, the large majority of spare land is condensed in a small number of countries, thus this does not solve the land availability problem at global level.

With the purpose of understanting which could be the future availabity of arable land in the world, IIASA (International Institute for Applied System Analysis) and FAO in their study called “Global Agro-Ecological Zone” (GAEZ) (2011) shows that, out of the total world land area of 13,019 billion hectares (in-land water excluded) currently available, only 11,76% is categorized as arable land and permanent crop, 25,912% is permanent meadows, 31,15%

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is covered by forests, and the remaining 31,18% is accounted as other land (Figure 3.4.1 and Figure 3.4.2). 37

Figure 3.4.1: WORLD LAND AREABY CATEGORY IN 2005/2007

Source: FAOSTAT

Figure 3.4.2: WORLD LAND AREABY CATEGORY IN 2005/2007

Source: FAOSTAT

In addition, out of the GAEZ study, what have emerged is also that the 1,53 billion hectares already employed for crop production is just a small share (21,25%) of the total 7,2 billion hectares of land with rain-fed production potential. The remain 5,67 billion hectares, however, could not be considered as potentially usable for crop production because 2,8 billion hectares are forests and 1,5 billion hectares are of poor quality for rain-fed crops.

Total Land Arable Land and Permanent Crops Permanent Meadows and Pastures

Forest Area Other Land

Million Hectares 13.019 1.530 3.374 4.055 4.060 Percentage of Total Land 100,00 11,76 25,91 31,15 31,18 31,19% 31,15% 25,92% 11,75%