17/04/2026
Introduction: The Energy Crisis as the New Normal
The global energy crisis is no longer a temporary disruption. It has become a persistent condition shaping economic and industrial systems worldwide. Among the sectors most vulnerable to this shift is the food system.
Modern food production depends heavily on fossil fuels at every stage, including fertilizer production, transportation, processing, and storage. As energy costs rise and supply becomes unstable, this dependency is reaching its limits. The result is an emerging structural challenge that can be described as “food’s fossil fuel reckoning.”
Geopolitical Shock and the Food Supply Chain Reaction
Recent geopolitical events have demonstrated how tightly food systems are linked to energy markets. The disruption of maritime traffic through the Strait of Hormuz in early 2026 triggered a cascade of effects across global supply chains.
This chokepoint is critical to global trade, handling approximately:
• 20% of global oil supply
• 20% of liquefied natural gas (LNG)
• 33% of seaborne fertilizer trade
Following the disruption, oil prices surged, and fertilizer costs rose sharply. Urea, a key nitrogen fertilizer produced using natural gas, experienced a rapid price increase. This significantly raised input costs for farmers, tightening already fragile margins.
The broader pattern is consistent and systemic:
• Fossil fuel instability increases fertilizer costs
• Fertilizer costs raise crop production expenses
• Higher crop costs affect animal feed
• Food prices rise, increasing the risk of hunger
Energy is embedded not only in fertilizers but throughout the food system, including machinery, transportation, cold storage, processing, and packaging. When energy prices fluctuate, the entire cost structure of food shifts simultaneously.
Over the past decade, repeated disruptions—including geopolitical conflicts and the COVID-19 pandemic—have exposed this vulnerability. Each crisis has reinforced the same lesson: food security is inseparable from energy security.
Macroeconomic Impact: The Case of Japan
Japan provides a clear example of how energy shocks translate into broader economic pressure. Rising energy costs linked to geopolitical tensions have contributed to higher bond yields and currency depreciation.
As a country highly dependent on imported energy, Japan faces increasing costs for both households and businesses. The weakening of the yen further amplifies the cost of imported food and raw materials.
Globally, governments continue to support fossil fuel systems through substantial subsidies. While these subsidies stabilize prices in the short term, they also sustain a structurally fragile system that remains exposed to recurring shocks.
The Core Problem: System Design, Not Production Volume
Despite widespread concern about food shortages, global agricultural output is already sufficient to feed more than 10 billion people. The real issue lies in inefficiencies and structural imbalances within the system.
Key inefficiencies include:
• Approximately 20% of food is wasted
• Around 13% is lost during distribution
• A large share of global crop production is concentrated in a small number of species
This concentration has also led to nutritional imbalances, contributing to rising health costs associated with diet-related diseases.
Modern agriculture is dominated by annual monoculture systems that lack resilience. These systems have limited capacity to absorb shocks because they lack diversity and long-term ecological stability.
Regenerative agriculture offers an alternative approach. By incorporating perennial crops, agroforestry, and ecosystem-based design, it aims to improve resilience while maintaining productivity. Over time, such systems can enhance biodiversity, carbon storage, and economic returns.
As input costs—particularly synthetic fertilizers—continue to rise, resilience becomes more important than maximizing short-term yields.
Industry Implications: Prepared Food Sector Risks
The prepared food industry faces particularly acute challenges because it relies heavily on energy in multiple forms. It can be understood as a “double energy” sector, requiring both heat for production and cooling for preservation.
The most significant energy burdens include:
• Heat-intensive cooking processes, especially frying
• Continuous cold-chain logistics
• Food waste, which represents embedded energy loss
Products that combine frying, meat, and high moisture content carry the highest risk because they require intensive energy inputs across production, storage, and distribution.
In addition, key raw materials such as cooking oils, poultry, and wheat are highly sensitive to global energy markets. When energy, logistics, and waste costs rise simultaneously, profit margins can disappear rapidly.
Strategic Direction for Transformation
To adapt to this new reality, the food industry must shift toward lower-energy system design. This involves rethinking both production methods and product development.
Key directions include:
• Transitioning from frying to baking or steaming
• Reducing reliance on meat through hybrid protein approaches
• Designing products with lower water activity to reduce refrigeration needs
• Simplifying product lines through modular design
There is also a growing need for next-generation prepared foods that emphasize efficiency and stability, such as high-quality frozen products, shelf-stable items, and simplified processing systems.
In this context, profitability will increasingly depend not on raw material costs alone, but on how effectively companies manage energy use and minimize waste.
Conclusion: A Structural Turning Point
Energy disruptions are likely to continue, and each new shock will further expose the vulnerabilities of the current food system. The industry now faces a fundamental choice:
• Continue optimizing the existing system
• Or undertake a structural transformation toward resilience
The future of global food systems will depend on how this choice is made.
