Let me start by telling you about mustard.
In 2021, a heatwave hit western Canada. Temperatures reached 49.6°C, the hottest ever recorded. Mustard seed production collapsed by half.
Six thousand kilometres away, in a matter of weeks, French supermarket shelves went empty. Dijon mustard, a market with a potential to grow to €200 million, almost disappeared.
If you don’t know the story already, you might be wondering why this happened.
France grows almost none of its own mustard seed. 80% comes from Canada. Which means a single climate event on one continent emptied shelves on another within weeks.
This is what happens when what we call a future risk becomes a current operating condition.
Next story is about cocoa.
In 2024, climate change added six weeks of temperatures above 32°C across West Africa’s cocoa belt, above the threshold where cocoa trees function. Prices spiked 400%, from $3,000 to over $12,000 per ton. (source)
By early 2026, the market reversed. Which means that Ghanaian farmers haven’t been paid since last November. And that 200.000 tons of Ivorian cocoa sat unsold. (source)
This resulted in every major chocolate company trying to manage a supply chain in crisis. Searching for alternative recipes or ingredients. Diversifying.
A June 2025 study in Nature quantified what’s coming with climate change. Every additional degree of warming is set to reduce global crop production by 4.4%. (source)
Their study showed that reduction in crop production would result in loosing around 120 calories per person per day. Or as the lead author put it: “If the climate warms by 3 degrees, that’s basically like everyone on the planet giving up breakfast.”
What all of this tells us is that we need to build beyond pilots, to manage upstream disruption before it hits margins.
The Risk
Risk management problem
The companies most exposed to that disruption are the same ones whose climate plans are rated as insufficient, which means the risk compounds.
The Corporate Climate Responsibility Monitor for 2025 assessed the 5 largest food companies: JBS, Nestlé, PepsiCo, Mars, Danone. (source)
Their conclusion? Current climate plans are “unlikely to lead to meaningful emission reductions.”
And we’re not talking about small players here. These are companies that have set SBTs, have dedicated sustainability teams, and have invested millions in regenerative agriculture.
And yet, the report shows that none have committed to reducing livestock production. None have plans to reduce fertiliser emissions. All rely on commodity certificates for deforestation claims without physical traceability.
Emissions management problem
The reason for this is structural. These companies are managing their own operations while the real exposure sits in the supply chain, upstream, out of sight.
According to WRAP UK, Scope 3 emissions can comprise up to 90% of a food company’s total carbon footprint (source). A BCG report found supply chain emissions are, on average, 26x higher than direct operations (source).
In Ceres report we see that food sector retailers often lag, indicating only 4 of 12 retailers disclosed supply chain emissions. (source)
SBTi requires companies to halve emissions before 2030 (for their near term targets). (source)
Which is only 4 harvests away.
Meanwhile, the alternatives are failing.
In one of the examples, in Western Australia, farmers signed 25-to-100-year soil carbon contracts with a company funded by Chevron. (source, source)
One Queensland farmer, Steve Blore, was initially featured in promotional videos praising carbon farming. Today, he tells a different story. After audits, his land’s expected carbon capacity was cut by 40-50%. (source)
“They got the numbers wrong,” he said. “The landholder is taking the burden.”
In May 2025, a Germany-based soil carbon developer exited the market, calling the sector “a poor fit for offsets”. (source)
Moreover, the voluntary carbon market contracted 56% in 2023 due to quality concerns. (source)
And if you’re relying on government programmes or carbon markets to solve your Scope 3 problem, that’s could be a difficult bet.
Take the $3.1 billion USDA Climate-Smart Commodities programme, the largest federal investment in regenerative agriculture in US history, as an example. It was cancelled in April 2025. (source)
(guess why)
Which meant that one hundred forty-one projects, and at least as many farmers, got their contracts voided… mid-season. (source)
We’ve seen many alternatives failing or getting off track.
You might ask what works then?
The most commonly chosen alternative to reduce upstream supply chains emissions currently is embedding regenerative practice into procurement as a sourcing standard. Let’s first see why companies are choosing regenerative agriculture.
The practices for upstream decarbonisation
The science of regenerative agriculture
Regenerative agriculture includes a number of practices such as soil cover, reduction of synthetic inputs, reintegration of diversity… The specific combination varies by crop and climate. But the underlying logic is applied everywhere.
Soil is treated as a living system. While conventional farming treats it as a growing medium, regenerative farming treats it as an asset.
A 2024 meta-analysis of 104 studies found that cover cropping increases yields by 2.6% overall. When leguminous cover crops replace synthetic fertiliser, that rises to 21.8%. (source, source)
A study from September 2025 shows no-till practices could reduce direct CO2 emissions from soil by up to 47% (source). Another study from 2024 showed combining both sequesters – no till and cover crops – could lead to a mean of 1.01 tonnes of carbon per hectare per year (source).
There are many studies on the topic, some highlighting the benefits of regenerative practices when it comes to decarbonisation and some trying to disprove them. Results always depend on the climate and whether the farm chosen the best practices that fit its geography.
The economics of regenerative agriculture
The European Alliance for Regenerative Agriculture studied 78 farms across 14 EU countries and found regenerative practices:
- had 20% higher gross margins than conventional
- used 61% less synthetic nitrogen
- had only 2% lower yields
Michigan State tracked transitioning farms and noticed that, by year three, economic returns matched conventional because regenerative systems had lower operational costs, essentially because they used fewer inputs.
(source, source, source, source)
It sounds good, in theory. Two recent programmes show what it looks like in practice – one in South America, one in Europe – and they share a structure worth understanding.
CASE STUDY 1: PepsiCo in Brazil
In November 2025, PepsiCo launched a programme in Brazil’s Cerrado with corn supplier Milhão. What makes it different:
- They pay farmers twice. First, upfront payments to offset transition costs. Second, performance bonuses for reducing agrochemical use. They call this model a hybrid Payment for Practice and Payment for Outcomes.
- They designed for scale from day one. The pilot started at 7,000 acres, designed to cover 30,000 acres by year three – to cover PepsiCo’s entire corn sourcing volume in that region.
- They set aside a fund for investments. They dedicated $1 million to the project for the three years, aiming to finally achieve a transition in procurement.
The project is still ongoing, but there are a couple of things that already make it an example of good practices. Structured incentives are tied to actual purchasing volume and there is a pathway to full sourcing coverage mapped before the first seed was even planted. (source)
CASE STUDY 2: Routes to Regen in the UK
In March 2025, the Sustainable Markets Initiative launched “Routes to Regen” with an unusual consortium including McCain, McDonald’s, Waitrose + banks (Lloyds, NatWest, Barclays) + insurers (Aon, Tokio Marine Kiln).
“Why banks and insurers?” you might be asking.
Because the two biggest barriers to farmer adoption are financial risk and fragmented support.
The programme provides discounted seeds and inputs, weather insurance for transition-year losses, flexible repayment terms, and peer-to-peer learning.
Why it is an example of good practice? Multiple buyers pooling demand creates leverage. And when financial institutions come together to share risk, it changes the economics for farmers.
COUNTEREXAMPLE: NGO supported project in Indonesia
A quick contrast.
In Central Kalimantan, a regenerative pilot launched with 96 smallholder oil palm farmers. Early results were promising, as they offered better soil health, and lower costs.
But it got off track. Why?
There was no coordinated buyer involvement, it depended on NGO funding. There was no pathway from pilot to procurement. When the grant ended, so did the acceptance of the method.
The farmers who improved their practices had nowhere to sell at a premium.
This shows a pattern that’s present too often. Programmes scale because they have structured incentives, buyer integration from day one, and multi-year horizons. Programmes get delayed or off track when they have aspirational commitments and no commercial pathways.
We talked about when pilots work and when they fail. Let’s see how to move from pilot to procurement strategy.
A couple of examples from the field below show good practices for building the framework for successful transition.
The next story, Sustainable Food Lab framework, explains why the Indonesian pilot got off track, and why PepsiCo and Routes to Regen didn’t.
The 4 pillar framework
The Sustainable Food Lab spent five years convening 20+ food and beverage companies to map best practices to navigate regenerative agriculture from pilot to scale.
Their conclusion? One should focus on changing the systems around farmers, rather than only focusing on better farming practices.
Three leverage points emerged and they’re not what most companies focus on. (source)
PILLAR 1: The 3-legged Stool of Farmer Adoption
A 2026 Ivey Business School study on scaling regenerative agriculture found the pilots: “fail because the systems around farmers are not designed well to support them.” Traditional supply chains push volatility upstream, leaving farmers to absorb shocks alone (source), as we’ve previously seen farmers testify.
System change research suggests regenerative practices become the new norm when 30% of farmers in a region adopt them. (source)
Below that threshold, early adopters face social and economic headwinds. Above it, the culture changes as neighbours, advisors, and local networks reinforce the change.
Research from the Sustainable Food Lab found that farmers adopt regenerative practices when three conditions align:
- Financial viability. They can make a living without undue risk.
- Technical mastery. They’ve learned the methods from people they trust.
- Cultural fit. Their choices align with neighbours, advisors, and local farming identity.
It’s clear companies should consider all three conditions when designing the pilots.
PILLAR 2: Supplier Engagement
An INSEAD field experiment with a Fortune 500 company in India tested two approaches to supplier engagement:
- Contractual approach: Simply requiring suppliers to meet standards written in their contracts.
- Relational approach: Investing in supplier capabilities while addressing their unmet needs.
The relational approach outperformed on every metric – farmer retention, practice adoption, and cost-effectiveness.
Their insight was that farmers change when you invest in them.
Yet most companies do the opposite. Apexanalytix found that most supplier sustainability assessments end with a questionnaire, rarely influencing contract terms or payment conditions. (source)
(source)
PILLAR 3: Building the infrastructure between the farm and the buyer
The Rockefeller Foundation spent five years studying why regenerative procurement fails. Their finding: “Even farmers who grow nutrient-dense food in ways that restore ecosystems still need access to the logistics and infrastructure that connect them to buyers.” (source)
What’s usually missing in pilots is:
- Aggregation: combining products from multiple small farms to reach volume
- Cold storage and processing: preserving and packaging to buyer specifications
- Trusted intermediaries: coordinators who translate between farmer realities and corporate requirements
(source)
We saw what makes good pilots. Let’s look at how to translate them into procurement.
PILLAR 4: Contracting
Most companies run procurement and sustainability as parallel functions where one sets targets and the other buys ingredients.
The programmes that scale are built on a different premise. And they start with a contract both departments agreed on. 3 models are in active use.
- Payment for Practice: farmers receive a per-acre payment for adopting specific methods, such as cover crops, reduced tillage, no-till. These are simple to administer and easy to verify. The limitation is that you pay for action, not for outcomes. (source)
- Payment for Outcomes: farmers are paid per verified tonne of carbon sequestered or per verified input reduction. (source)
- Contractual conditionality: incorporating regenerative benchmarks – cover cropping rates, deforestation-free land, verified carbon outcomes – directly into contract renewal terms as a condition of supply. (source)
A variable that determines whether any of this works is contract length. A good contract terms would not suffice without an appropriate lenght of transition.
Daily Harvest gives farmers three-year contracts alongside price premiums for transitional crops. That’s long enough for a farmer to invest in practice change without absorbing year-one losses alone. (source) I’ve seen programs incorporate even longer contracts – five years or more.
Your supplier won’t invest in practice change – new equipment, new inputs, transition risk – if you might switch next season. Nor can he transition a farming system in 12 months. Companies that offer longer-term contracts shape ingredient quality, reliability, and supply chain resilience in ways that short-term engagement cannot.
PILLAR 5: Tiering suppliers
A good procurement strategy doesn’t mean not treating all suppliers the same but knowing which ones to focus first, how fast, and with what level of support. That requires a tiering model.
Food and beverage multinationals have begun creating procurement triggers that cascade through supplier tiers. (source)
Two approaches in practice:
- Progress-based tiers: suppliers are segmented based on their progress toward regenerative practices, not by volume alone. Each tier should come with a different package of support, timeline, and pricing incentive. (source)
- Engagement tiers linked to contract value: PepsiCo distinguishes an “engaged” tier of direct suppliers that receives direct investment in transitioning practices based on the value of their contracts. Their logic is that the most valuable supplier requires the most urgent engagement. (source)
Putting it all together
4 procurement practices that companies scaling regen ag use to transition away from pilots:
- Replace annual contracts with multi-year offtake: Some retailers provide multi-year purchasing commitments specifically to offset transition-year risk. Without that guarantee, farmers won’t invest.
- Align procurement and sustainability on shared targets: Mars’s outgoing CEO said it plainly: “We used to buy against quality and price. Now sustainability teams and procurement teams need to work closely.” Without shared metrics, the two functions optimise against each other. (source)
- Create internal transition finance: PepsiCo launched an internal co-investment fund in 2021, the Positive Agriculture Outcomes Accelerator, specifically to reduce the risk and cost of projects before they reach procurement scale. (source)
- Build it into the contract itself: Danone uses tools like the Cool Farm Tool and embeds the requirement into supply agreements, alongside dedicated investments in irrigation and soil management infrastructure. (source)
As we can see from all examples, procurement has to be in the room before the pilot starts and involved throughout the process.
Conclusion
Let me close where we started.
Mustard in France. Cocoa in Ghana. Corn in Brazil.
Good practices and industry risks aren’t separate stories. They’re the same story – about a supply chain designed for a stable climate encountering one that isn’t.
The Rockefeller Foundation puts the annual funding gap at $250–430 billion to transition global food systems. (source)
Corporate investment covers a fraction of that. Government programmes have been cancelled mid-season. Startups have changed course and focus.
What fills the gap isn’t more funding. It’s structure.
Unilever’s Nutrition President said it clearly: “The time for pilots is over. It is time to go big.” (source)
He’s right, but I will politely disagree. But big isn’t enough. It has to be systemic.
The mustard shelves didn’t empty because of a bad harvest but because no one built the system before they needed it.
We still have time to build ours.
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