During his keynote speech at the annual City Food Lecture in London on Feb. 25, Nestlé CEO Paul Bulcke warned that water scarcity is one of the greatest threats facing the food industry.

Bulcke argued that overuse of fresh water poses not only a serious environmental hazard, but also a major risk to political and social stability.

He said water scarcity will be the cause of massive food shortages within the next 15 to 20 years and that now was the time for industry, governments and other stakeholders to act decisively.

In particular, Bulcke noted that there will be up to 30% shortfalls in global cereal production by 2030 due to water shortages.

“This is a loss equivalent to the entire grain crops of India and the United States combined," Bulcke said.

“Resource shortages lead to price increases and volatility,” he continued. “Higher prices for staple cereals are not so much of a problem for the West, or for most people in Europe. But a price increase of more than 200% will certainly be felt when you have to spend 40 to 60% of your income on food, mostly staple food.”

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Bulcke also highlighted some of the other challenges currently facing the food industry, particularly the horsemeat crisis that has affected a number of retailers and manufacturers in Europe, including Nestlé.

“The horsemeat issue affects the entire industry,” he said. “Widespread fraud is being committed by a few across Europe. I understand that many consumers and many of you in the industry feel misled, I feel the same. This should not happen, it is unforgivable. We have let our consumers down."

Bulcke pointed out that while the food industry is often heavily criticized, it has played an important role in society.

“Our industry has made major progress over the years,” he added. “Food has never been safer and yet, the perception is sometimes the opposite. But the current issue is not a food safety issue, it is a trust issue."

Bulcke cautioned that if food companies are to continue to produce enough affordable, quality food for the fast-growing and increasingly prosperous global population, ensuring availability of fresh water is vital.

“There will be a further 2.3 billion people on the planet by 2050, adding to existing demand for food and energy,” he said. “Already today, water withdrawals are in excess of sustainable supply, and this gap continues to widen. It is only by working together with policymakers, civil society, agriculture and other stakeholders at local and international levels that we can develop effective, coherent and concrete action. This is an issue that must be addressed urgently. I am convinced it can be solved. We should give water the right priority, the right value.”