Now in its fifth year, California’s drought is being felt across the state, with districts asking homeowners to take shorter showers and stop watering their lawns. But the economic pain has been most acute for the state’s agricultural industry. This year alone, the drought is expected to cost the agricultural industry some $2.7 billion and more than 18,000 jobs, according to a report by the University of California-Davis.
But Will Sarni, director and practice leader of water strategy at Deloitte Consulting, told FoodNavigator-USA that the drought isn’t happening in a vacuum—there are bigger trends driving water scarcity.
“What we have to do to a very large degree is acknowledge the drought and climate change versus the big trends driving water scarcity independent from that in order to have a better conversation about what needs to change,” Sarni said.
“We operate in a world where there’s a greater demand for water. I think that in some ways, we need to stop calling it a drought, and acknowledge these bigger issues.”
We need to stop calling it a drought
Perhaps the biggest driver of water scarcity is the growing global population, which—at 7 billion strong—is well on the way to its projected 2050 figure of 9 billion. Simply put, more people need more energy and more food—both of which require water, Sarni said.
The former (biofuels, gas, etc.) largely pulls from rivers and streams to cool power plants before the water is returned to its source. Through this process, little is lost to evaporation and is thus considered nonconsumptive.
Consumptive use, on the other hand, refers to evaporative water that’s consumed through growing plants for food and textile production. More than half of consumptive water use is in animal agriculture production—a number that seems likely to rise alongside the middle class continues to grow worldwide, as upward mobility often leads to a trade-up from grains to higher forms of protein.
“When you layer a short-term drought or climate change on top of these bigger water scarcity trends, it becomes even more complicated,” Sarni said.
And although physical scarcity is spurring policy change, many of these regulations act largely as a form of catch-up, Sarni added. Thus, companies have a unique opportunity to lead the way by taking on water stewardship as a business issue, rather than waiting on legislation or simply looking at water through the narrow lens of corporate social responsibility (CSR).
“When speaking to businesses, we try to frame water as a business issue not as a CSR issue,” Sarni said. “What does water mean to your business? And how will you manage it over the long term as opposed to waiting to see what happens?”
Food and beverage companies have made some of the biggest strides in water conservation of any industry
Examining the water footprint of products and services enables food and beverage companies to get better insight into where the biggest risks are across the value chain and how to manage it. For food and beverage companies, that means digging into their agricultural supply chains, where their largest water use sits.
Even despite their comparatively large water footprint, Sarni noted that food and beverage companies have made some of the biggest strides in water conservation of any industry.
“If you look at many beverage companies in particular, they are leading on the issue, which means they’re reaching into the agricultural supply chain and working cooperatively to drive increased efficiency and deploy water technologies,” he said.
Examples range from proficiency agriculture to data acquisition and analytics and investments in water technology hubs and consumer education through water usage labels. Startup firms have a unique opportunity to think about their relationship to water from the outset and as they scale.
An aggressive, unusual approach
Even companies that don’t use a lot of water can play a big part in raising awareness, Sarni noted.
“One global CPG company that doesn’t use a lot of water developed a water stewardship strategy because they’re recognized in parts of the world that are water scarce and water stressed. They took an aggressive, unusual approach in communities where they operate and with employees and customers, recognizing that they have an important role to play even though their footprint isn’t that big.”
Indeed, with less to go around amid growing demand, Sarni favors a collaborative approach. “The reality is there’s less to go around. But we also have a great opportunity to use that as a platform for creativity and cooperation,” he said.