The world today could be grouped into four economic groups, he said. Europe, North America, Japan/South Korea and Oceania form the high-income group, while the former Soviet Union countries, the Middle East and South America form the smaller middle-income regions. China and other Asian countries form the very large middle-income regions, while Africa and India form very large low-income regions.
India, China and other Asian countries are enjoying fast economic growth, he explained, and volume sales are set to rise by 2.1% each year over the coming decade in these poorer regions.
But higher income consumers will be shifting towards higher quality and more processed food at the same time – and these higher value sales will outstrip volume sales by growing 4.5% a year.
He forecast that diet would be a greater health issue in coming years. Obesity has overtaken malnutrition as a key concern globally, and food and drink consumption in the US is already down 1-2%, accelerated by the fast adoption of GLP1 weight loss medications.
Geopolitical uncertainty
Sales of alternative proteins are rising as a result – but past examples of low-calorie carbonated drinks and low-alcohol beer suggest fundamental changes in consumer habits take a generation to happen. By 2035, alternative proteins will remain niche, he said, with dairy alternatives making up only 9% of the market, and meat alternatives only 4%.
But despite the global growth in prosperity, Harry painted an unpredictable picture of world trade and geopolitics in the years ahead, with the emergence of two major power blocs. North America, Europe, Oceania and Japan/South Korea will face another bloc made up of China, the former Soviet Union and other Asian countries, with other nations caught in the middle.
Because of this risky global environment, the more-stable UK home market offers real opportunities for farmers, Harry said, pointing out that the UK is the second most populous country in Europe while currently having a relatively small agricultural sector.
Opportunities at home
With a projected 2.9% growth in consumer expenditure on food and drink in the years to 2035 the UK could be one of the fastest growing food markets in Europe – and one that UK farmers should be ideally placed to take advantage of.
“Tapping into these opportunities may require change on your farm – but also changes for the UK as a whole.”
Rabobank senior analyst Harry Smit
“As a farmer you can forget a bit about those global developments – your market is not in China or in Africa,” he said. “Your market is closer to home – with high-income consumers spending relatively a lot on food.”
To make the most of opportunities farmers need to build up resilience and perhaps sacrifice some independence, added Harry, suggesting four cornerstones for success.
‘Anticipation and insight’ involves using data, knowledge and research to look ahead and monitor progress.
‘Resilience and control’ means steering events rather than reacting to them. Farmers should form local cooperatives for nature/environmental services or creating farmer-developed sustainability schemes.
‘Reducing dependencies’ involves diversification, building strategic reserves, and strengthening local production.
‘Innovation and circularity’ suggests a wider collaboration across sectors and borders (such as between crop and livestock farmers), leveraging each other's strengths and jointly search for win-wins. This could also involve greater collaboration with organisations such as NGOs and industry.
He concluded: “There will be a riskier global environment and a UK home market that offers opportunities. Tapping into these opportunities may require change on your farm – but also changes for the UK as a whole.”
Meet the speakers:
Harry Smit
Senior Food System Analyst, Rabobank
Harry leverages his extensive knowledge of the agricultural sector to advise clients and the bank, and he is a frequent speaker at industry events. His core focus is on how the transition of the global food system impacts business models throughout the supply chain.
One of his recent publications, Five Key Transformations to Watch to Navigate the Global Food System Amid Increasing Volatility, is available online.
Harry’s expertise stems from a career spanning multiple roles within Rabobank and the Ministry of Agriculture.
He holds a degree from Wageningen University and grew up on his family’s farm in the Achterhoek region, giving him a strong foundation in agriculture from an early age.
Paul Williams
NFU Cymru Deputy President (incoming)
Paul has been an active NFU Cymru member for more than 20 years and has previously served as NFU Cymru Clwyd County Chairman.
He was instrumental in the iconic display of 5,500 pairs of wellingtons laid outside the Senedd in 2023 to show the industry’s opposition to the Welsh Government’s Sustainable Farming Scheme framework at the time.
