The European Food Summit Brussels, 11-12 April 2002

Meeting consumers' needs in the 21st century
by A. Burgmans
Chairman, Unilever
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Ladies and Gentlemen,

First and foremost, allow me to thank the CIAA for the invitation to speak today on the important subject "Quality for a Confident Consumer". Important, because the CONFIDENCE of the consumer in our products and in our companies is THE crucial success or failure factor for the future of the food chain and all who work in it.It was the apple that drove us from Paradise. Since then mankind has had to worry about the availability of food, about threatening famine and the quality and the safety of what we eat. Concern about food availability is an age-old problem.

You no doubt know the stories in the Bible about the manna in the desert and the miracle of the five loaves and two fishes. Concern about food safety is centuries old too. A seventeenth-century recipe book tells the housewife how to discover whether "an unscrupulous baker" has possibly used copper vitriol to bake bread using flour containing over-ripe grain. "Spread a slice of bread with a thin layer of yellow prussiate of potash. If a reddish-brown stain appears then the presence of copper cannot be doubted."Mistrust of the local baker in those days has now been replaced by broad-felt distrust of the agricultural and food processing industries. While it is true that they provide large parts of the world with a vast quantity of - relatively inexpensive - food, they are also perceived to destroy the landscape, to treat animals without respect, to deplete the fish stocks and to be unable to guarantee the safety of our food. Confidence in our system of food production has been seriously affected by major and minor incidents, I mention only BSE and foot & mouth disease, and alarming reports such as the Brundtland report "Our Common Future".

Many people are making an all-out effort - as I will demonstrate - to restore the consumer's confidence about the way in which we produce food and about the safety of our products. Not in a cosmetic way, but through continuous and structural improvements to the present system. The first successes have been booked, but there is still a long way to go. In the coming 20 minutes I want to answer two questions:

1. when it comes to food, what are the consumers' needs in the 21st century?

And:2. what are the consequences of the way in which we produce and sell food worldwide?

I will restrict myself to a number of main issues. Namely: the sustainability of food on the one hand, and quality, health and safety on the other. I will begin with the views of the consumer. It is very simple: the customer is always right. His or her views and requirements determine our way of thinking and acting and NOTHING else: consumer value is the all-decisive value in our business dealings. At the beginning of this new century we - at Unilever - had a worldwide study carried out into what the consumer wants, thinks and feels. This study revealed a number of mega-trends, two of which are extremely relevant today.

1. Everywhere in the world, the consumer has a growing desire for health and well-being. The longer life expectancy in large parts of the world is generating a demand for a better quality of life. And worldwide that translates into a demand for healthy and health-promoting foods.

2. Equally universal is the growing concern for the environment and the sustainable use of resources.

Unfortunately there are still too many areas in the world where there is no clean water and not enough good food. In central and southern Africa alone, 200 million people are undernourished. It is a distressing indictment of our inability to pay more than lip service to Human Rights. Moreover the consumer plainly sees the medium-term perspective as alarming. In just 30 years we will have to feed not 6 but 9 billion people. A challenge of inconceivable proportions, and the consumer realises this.

Availability of food and high quality and reliability are therefore basic consumer requirements. First the availability issue. There can be no doubt that availability is no longer guaranteed. Fish is the most evident example. If we continue to pursue our current fishing practices then the end is in sight. In the case of agriculture and meat production the situation is more complicated, but here, too, there is a limit.

Shortage of fresh water, soil erosion and huge increases in plant and animal diseases herald the bankruptcy of our present way of producing food. The growth of the world population, starvation in countless countries and the exhaustion of the agricultural acreage require action at every conceivable level. In the first place at a political level. Only a "grand alliance" against poverty can offer the perspective of an inhabitable world in the coming century. There is no room for isolationism and protectionism. Thankfully there are signs that offer hope. I am referring to speeches by Presidents Bush and Chirac during the UN International Conference on Financing for Development, held three weeks ago in Monterrey, Mexico.

They acknowledged whole-heartedly that a global crusade against poverty is of vital importance. I quote President Chirac from the Washington Post of Friday 22 March. "What can be done against terrorism can surely be done against poverty, in the name of a more human, manageable globalisation."These are important words which - according to the Washington Post - are accompanied by important deeds: 10 billion dollars extra for American development aid in the coming five years. But: only for countries that are capable of breaking away from corruption and the favouring of a small top elite. Those countries that are prepared to create a trustworthy and solid government policy, because this is a prerequisite if markets are to function. If this is the beginning of a new worldwide campaign against poverty and under-development then there is a gleam of hope.

But, I immediately hasten to add, donating money to poor countries is simply not enough. Simultaneously we in Europe and elsewhere in the industrialised world will have to radically reform our outdated agricultural policy with its total lack of perspective. I say it straight out: the present European Common Agricultural Policy (CAP) and the Common Fisheries Policy (CFP) seriously impede structural and sustainable solutions. The agricultural policy has resulted in quantities of food supply that do not match the demand for quality foods.

It encourages the over cropping of our valuable land, the excessive use of fertilisers and crop protection agents. It costs the taxpayer loads of money. We spend some € 44 billion of EU taxpayers' money on agriculture annually, without a proper sustainability assessment! According to Commissioner Fischler more than 70% of this budget goes to only 20% of all farms, namely the biggest, mainly arable producers. And on balance the hard-working farmer doesn't even earn an acceptable income. It is in all respects counter-productive.But look at the impact the CAP has outside Europe.

Prohibitive tariff barriers create frustration in developing countries and in countries with an efficient agricultural production system. This protection of inefficient food production in the EU is now being challenged in the WTO Doha Development Round. At the same time we subsidise EU exports to third countries with export restitutions. This system has created damaging effects in the production capacity in third countries, in particular in developing countries. I realise that radical reform of the agricultural and fisheries policy will be painful and will give rise to resistance in the short term. And yet it must take place now. For ecological reasons and for economic reasons. We will force ourselves into bankruptcy if we continue to distribute subsidies to new EU member states for inefficient food production.

At Unilever, since Brundtland, we are quite convinced that we must make a U-turn. We must be able to guarantee sustainable production if we wish to continue to satisfy the wishes of the consumer and thus survive as an enterprise. Conviction then, out of enlightened commercial self-interest. No fish, no fish fingers. No water, no tea. It's as simple as that.Sustainability, that fairy-tale wedding between economic growth, environmental protection and social progress poses challenging questions for an enterprise such as ours. How can we procure fish from sustainable sources and at the same time promote the living conditions of small-scale fishermen in Spain or Greece? Can we apply gene-technology in products and at the same time protect the environment? Can we book economic growth in India and create jobs by producing and selling more detergents without environmental impact? Just go ahead and try!

Well now, we did just that. In the firm conviction that it is possible to realise economic growth, sustainability and social development simultaneously. We have set concrete campaigns in motion.I will name four:Together with the World Wide Fund for Nature we have established the Marine Stewardship Council. Objective: to establish sustainable fishing. The MSC is by now an independent organisation supported by more than 100 fish processing companies, traders and retailers from more than 20 countries. The MSC stipulates the criteria for sustainable fishing methods, both technical and social. The MSC monitors observance and certifies fish that are caught or farmed according to sustainable methods. As a token of our commitment to sustainable fishing, we have undertaken as of 2005 only to buy and process fish from sustainable sources. We will inform the consumer of this decision and we are certain that the consumer will then demand fish products obtained according to sustainable methods. If our 100 colleagues in the industry and everyone else involved does the same, this will be a tremendous impulse for the entire chain.

We have begun experiments with countless partners - such as farmers, universities, trade unions and retailers - for the sustainable production of agricultural crops. Starting with crops that are strategically important for us. Tomatoes, tea, spinach, peas and palm oil. Let me single out one product: our frozen peas. In the UK our company Birds Eye collaborates closely with farmers, universities, bird specialists, environmental and animal protection organisations. We now succeed, together, in maintaining high qualitative and quantitative standards; the use of fertilisers and crop protection agents has been reduced and biodiversity increased. It is still too early to report concrete results across the board - these kinds of processes are too complicated for that - but I do advise you to examine the highly-promising progress reports on our website.

A third initiative: pilot projects in the field of water management. Once again in collaboration with numerous partners, but also "solo" within our own organisation. In just a few years we have succeeded in reducing our water consumption from 1.7 billion m3 to 1.25 billion m3. The fourth example. We have decided to open up our activities to all companies wishing to participate in the efforts to promote sustainable food production. We exchange concepts and ideas with our partners in the chain, other food companies with the same objectives and with the authorities and international organisations. We discuss criteria, best practices, desired changes in legislation and whatever else that could be instrumental to the ultimate goal: sustainable agriculture.
In the Netherlands we support the project "Internet everyday" which shares best practices between agricultural producers.

A large group of stakeholders "From Farm to Fork" is now committed to sustainable production, using transparent internet applications. In Johannesburg at the Rio + 10 conference this year we will discuss with the world community the advances we have made in the past ten years in the field of sustainable agriculture. And thankfully, we can report concrete progress. We look forward to that conference and hope that it will be the restart for far more and broader-based sustainability initiatives.Ladies and Gentlemen,I come to the second part of my contribution: food, health and safety. A highly complex subject with many aspects that are closely interlinked.There can be no doubt, in my opinion, that health and food are related to each other. You see living proof of this every day. Thanks to improved hygiene and sufficient, good and varied food, our health has improved and our life expectancy has increased. But you also see many people who are overweight and suffer from poor health.

The links between food and health are clear. Relatively little is known about how they are precisely connected, but insights are developing rapidly. The connection has been made between the daily diet and overweight, as has the connection with cardiovascular disease and certain forms of cancer. Cardiovascular disease is the major cause of mortality in Europe. And overweight is becoming an increasingly pressing problem. In the USA 67% of the population is overweight and 28% even excessively overweight. In the UK the percentages are by now 50% and 17%. We, the food processing industry, share the responsibility when it comes to health and providing the consumer with the relevant information. And we also assume that responsibility. For eleven years, together with the retail trade, we have been the promoter in the Netherlands of the multi-media campaign "Watch out for fat".

And for many years now our researchers have explored the possibilities of contributing to health and the quality of life via our products. The cholesterol-reducing margarines are the best-known example of this. The development of rice enriched with vitamin A is another example. Application of this in many countries could contribute to combating eye disorders. Food and health are extremely delicate subjects. Misuse is a permanent risk - because we know how sensitive the consumer is about anything that promises healthy gums, increased vitality or a healthier heart. We have now landed in a field full of pitfalls and traps. On the one hand health claims may be made with impunity about the most exotic extracts of algae and toadstools, while on the other hand there is great restraint in the approval of new foods that can contribute to improved health.I believe that we have in fact no choice here. If we wish to act responsibly, then thorough scientific research is the only practicable basis for decision-making. But this must be consistent and must be based on the understanding that safety is a relative concept.I want it said here: the excellent medical principle "in dubio abstine" (abstain if in doubt) has been turned into a caricature by applying it to what is termed the "precautionary principle" whether it is relevant or not. The "in dubio abstine" principle makes it necessary for the medical profession to take calculated risks when treating diseases.

The "precautionary principle" is put forward - I would say abused - to silence the world and block all progress. I can point to the "a priori" opposition attitude that we see particularly here in Europe towards biotechnology in relation to food. We simply cannot permit ourselves such a rigid attitude. Please don't misunderstand me: I am in total agreement that the highest demands be made on the scientific foundation of a health claim. I, myself, would prefer to go even a step further: it would be expedient to redefine legislation in Europe and make a clean sweep of the range of national systems presently available. We are confirmed supporters of strict, transparent legislation.

We would be delighted to see the European Food Safety Authority developing into an agency with the same authority as the American FDA or the EMEA - the European Medicine Evaluation Authority. An independent authority that bases its decisions on thorough scientific study. With no risk of political sentiments. An authority whose procedures are strict, but also fair, open, efficient and predictable.I hope that this year the European institutions will take a few steps in this direction by taking decisions on three important files:
- Vitamin and mineral enriched foods;
- Health claims and particularly claims concerning risk reduction;
- Review of the procedure for authorisation of new functional foods

.Before I finish I would like to say a few words about food safety. The importance of this needs no explanation: in my opening sentences I already identified a trusting and confident consumer as the single most important measure for success.Modern food chains are long and extremely complex. It is absolutely impossible to hold one player in the chain responsible for the entirety of it. Chain responsibility is therefore the responsibility of each player in that area that he or she can oversee and control. In concrete terms that means that each player in the chain takes responsibility for quality and safety; observance of laws and regulations and full and direct information to the authorities, the trading partners and, if necessary, the public, if something goes wrong. Each of us is obliged to ensure that our suppliers recognise this responsibility and can actually fulfil this. One step up and one step down in the chain. This means that fragmented initiatives, which only look at part of the supply chain, should be rejected.

I am proposing to involve all stakeholders in food safety in a common effort, as they have a joint responsibility:

- agricultural producers (food and animal feed)
- raw materials and ingredients suppliers
- food manufacturers
- retailers
- caterers
- consumers
- EFSA and
- regulators

. Such a food safety project should be an integrated European approach, defining roles and responsibilities of all stakeholders and making them accountable for agreed actions. This can take the form - for example - of agreeing that everyone works with recognised, reliable and certified suppliers.

Consumers know little and therefore understand little about the fundamentals and complexities of the total supply chain. To regain public confidence, a common effort to make food production more transparent is an essential part of such a food safety project. We need to not only communicate reactively when something goes wrong, but to pro-actively open our doors to show what we are doing and the safety systems we are rightly proud of!

Great responsibility rests with the authorities that have to enforce the regulations and organise effective European crisis management. They must be able to rely on the full co-operation of the food chain. Speaking on behalf of and to the food industry: we should be and are ready to share all our expertise to build a stronger and more credible food policy.I hope, or rather I expect, the European Commission to warmly welcome such an initiative and I am convinced that CIAA wants to be a more than willing partner to act as a catalyst on behalf of the total food chain.

Only by working closely together and by building strong and lasting partnerships will we be able to satisfy the consumers' needs in the 21st century.

Thank you.