As part of her scientific work, sustainability expert Dr Beate Gebhardt spends a lot of time looking at the meat industry. What has always fascinated her is the high proportion of family-run companies in this sector. In this interview, she explains how important the principle of ‘future-proofing’ (“Enkelfähigkeit” in German) is for developing sustainable prospects, and why it is not necessarily linked to biological successors.
In what way is ‘future-proofing’ connected to sustainability?
To me, ‘future-proofing’ is another term for sustainable business. This concept helps us take the future into view, which is essential for any sustainable measure. For example, where will my company be in 30 years’ time? It’s about entering into dialogue and interaction with future generations. It requires more time and deep work than writing a quarterly report.
“Where will my company be in 30 years? ‘Future-proofing’ means asking yourself that question.”
What exactly does ‘future-proofing’ mean?
While there is no certificate or standard that defines it, the term ‘future-proofing’ implies that it is about the economic future in connection with ecological and social considerations. You can also find people using the term in practice. For example, it is used by organic farmers and companies opposing agricultural poisons. There is also an ‘Enkelfähigkeit® Academy’ with speakers from major agricultural companies.
How ‘future-proof’ is food production today?
We are talking here about a wide range of diverse companies and complex value chains, some of them global. We also need to differentiate between areas such as plant cultivation, animal husbandry, processing, and the food trade. There are various problems and relationships, but also options. Furthermore –and this also complicates things– sustainability as a guiding principle is a fantastic ideal, but one that is difficult to quantify and will probably always remain imprecise and uncertain.
Let’s take this step by step: What makes the food industry so special?
Food is at the heart of everyday life. As consumers, we have an existential connection to food. The ethical aspect is becoming increasingly important. High-quality, healthy food is very interesting to us. This is why we are likely to find trailblazers or pioneers in the food industry. There is a demand for positive headlines. Many business and sustainability organisation chairpersons now identify the food industry as a leading sector for sustainability.
“The food industry is now widely recognised as a leading sector for sustainability.”
Your estimate: How many companies in the food industry are actively concerned with sustainability?
In a study I conducted some time ago on sustainability excellence in the dairy and meat processing industries, the results were a little modest. Half of the dairies communicated sustainability aspects on their websites; the meat processing industry provided significantly less information about its sustainability activities.
What makes the meat industry more cautious in this respect?
In my opinion, the meat industry is moving towards sustainability. However, unlike other food industries, it faces a critical, fundamental issue that has long led to uneasy communication: We enjoy eating meat, but we don’t actually want to kill for it. So far, there has been no solution to this dilemma. Perhaps the answer lies in laboratory-grown animal proteins, which are trying to resolve this.
A very high proportion of businesses in the German meat industry are family-run. Why is that?
The answer is quite simple: there are lots of butchers. Meat was the last food category to be made available in supermarkets’ self-service sections. For a long time, people used to buy meat from butchers. Germany still has many butchers’ shops, which are usually small, traditional, family-run businesses with strong regional ties.
Can every family business be made ‘future-proofing’?
Well, when there are grandchildren... But no, there’s not necessarily a correlation there. In Germany, some family-run businesses in the meat sector are strongly committed to sustainability. They have set up a sustainability strategy and include meat substitutes in their product range and they pay strict attention to how animals are treated when they purchase meat. However, some family businesses in Germany are closing up shop or are being singled out for their unsustainable business activities. I would say that ‘Enkelfähigkeit’ is an attitude that is not tied to a specific type of company.
“Looking into the future requires more time and deep work than writing a quarterly report.”
‘Future-proofing’ can also refer to a successful handover…
The question of succession is a huge challenge and vital for the continued existence of many companies because of the demographical change and inverted population structure in Germany. After all: who wants to in skilled trades anymore? And who wants to work in agriculture? Economic continuity is a fundamental consideration when we talk about sustainability and ‘future-proofing’.
What about resilience?
Today, companies need staying power. The multiple crises have taught us to plan better for the future. The need for adaptability and resilience affects everyone today. I often ask myself whether family businesses, especially small companies, are really in a better position. They typically operate with a very streamlined structure, often with a managing director responsible for both strategic and operational matters. But who is supposed to keep the business running when transformation is the order of the day?
Not exactly good news!
However, this does not mean that large companies are in a much better position here. Studies on the impact of the covid pandemic have shown that, while many set up crisis teams, they disbanded them again after the crisis had passed – rather than using the chance to transition these teams into sustainability management teams. This would have been true ‘future-proofing’! The good news is that many SMEs are committed to taking the issue forward, even though sustainable business practices have been faced with some backlash recently.
Can family businesses utilise the natural conflict between generations as a driver of innovation during a handover? A bit like: the father did it one way; the son does it differently.”
The required skills are different now. Young people simply bring digital skills with them. However, values have also changed; the younger generation values sustainability more highly and sees it as more central. I often observe this: when a farm is taken over by the children of the previous owners, things start moving that were simply unthinkable before. Employees then experience a new appreciation.
Couldn’t that also lead to conflict?
Perhaps, but not necessarily. It’s very fortunate when children are willing to follow in their parents’ entrepreneurial footsteps but also bring in their own ideas! Not everything that the children come up with has to be a hit, as long as it doesn’t have serious consequences. Personality traits are also important: can the older generation step back from the business and enter a sort of a mentoring role? What if there are several successors in line? One approach is to involve mediators to help identify the strengths of each sibling.
“Can the older generation step back from the business and enter a sort of a mentoring role?”
When is the ideal time for successors from the family to join the company?
I have the impression that it sometimes happens a little late. The parent generation thought their children weren’t interested, or that they were gravitating towards other professional fields, only for them to come knocking on the door at some point. Is there still enough time then for succession planning? It takes years to truly understand how a butcher’s, baker’s or craft business works. Children often bring an academic education with them, which was not usual before in artisan businesses. This raises the question of what qualifications are really needed to run the business.
Do young women face disadvantages when it comes to succession?
Yes, there is a gender gap; we have fewer women as company heirs and in management in general. The situation is slightly better in the service sector. Germany is very focused on mechanical engineering, an area in which we have the fewest women. We can also see how gender affects succession planning in food companies. Young men are drawn to production roles, while women tend to go into marketing. The fact that a higher proportion of women are busy with childcare does not exactly favour this development either.
If there are no grandchildren, how can the succession be organised in a ‘future-proof’ way?
There are now study programmes at dual universities in Baden-Württemberg that aim to train agricultural managers, a little like the vocational academies we used to have. Prospective agricultural managers are employed on farms while pursuing an academic education, with theory and practice closely linked – both women and men represented. Other successful approaches to running a business without a successor include placing it in the hands of employees, forming co-operatives, or establishing foundations.
For meat companies, the expansion of production, e.g. to include meat substitutes, can pose a financial problem if, for example, research has to be financed. Here, ‘grandchildren’ alone cannot help ...
The ‘rejuvenation’ or long-term perspective can be promoted through collaboration with start-ups. We have a strong start-up culture at universities, and entrepreneurship centres are popping up. It is possible to find collaborators here and to access venture capital – when you have a good concept. Large companies such as the Schwarz Group, which owns Lidl, are demonstrating how to collaborate with NGOs and establish start-up innovation hubs. While you might not describe this as ‘Enkelfähigkeit’, it certainly secures the future.
Michael Hopp
Author at Foodtech Now! editorial office, who wants to show through his stories that tradition and innovation belong together.
