According to the 2014 “Conscious Consumer” study from Gibbs-rbb Strategic Communications, Americans are willing to spend 31 percent more per week on groceries if those products are made in ways that align with their social and environmental values. Specifically, shoppers are willing to spend more on brands that can prove to them that they advance the well-being of the planet and humans, as well as provide finished products at retail that come from safe food sources.
Increasingly, sustainability isn’t an option for most manufacturers. If they want to compete, they must pursue “green” operations, practices and ingredients—and address potentially volatile labor practices.
“Consumers are holding brand owners more accountable for the environmental footprint of their supply chains and factoring proactive sustainability efforts—or lack thereof—into purchasing decisions,” explains Brad Hansen, president, Presto Specialty Group, Presto Products Co., Appleton, WI. “In response to consumer demand for greener options, many retailers have mandated progressive measures for reducing the environmental impact of the brands they stock.”
A strong impetus for this acceptance has come from the Millennial generation. “Millennials believe brands have the power to unite and inspire people, and even change society,” says Mary Zalla, global president of consumer brands, Landor Associates, and managing director of the company’s Cincinnati and Chicago offices. “Companies that focus on making a meaningful difference, including those that focus on sustainability, are winning because their brands mirror the values of their audience.”
The “Conscious Consumer” study also reveals that 72 percent of shoppers are willing to switch from trusted food brands if they find that the company engages in irresponsible labor practices. “Consumers want to know that you have sustainable business practices,” says Zalla. “And they aren’t just saying they support purpose-led companies, as we have seen in the past—they are supporting these brands through the power of purchase.”
According to Todd Camp, senior director of corporate social responsibility and community relations, The Hershey Co., Hershey, PA, manufacturers and suppliers need to not only commit to sustainability, but also communicate their efforts to consumers. “With the continued influence of social media, as well as more-traditional media channels, much more information is available to consumers and, ultimately, can influence their purchasing decisions,” he explains. “Consumers clearly want to know the company behind the brands they choose, so the need for companies to establish what they stand for, to be more transparent and communicate demonstrated sustainability progress, is higher now than it’s ever been.”
Operations and supply chain
One way companies are setting themselves apart on the sustainability spectrum is by streamlining their operations and optimizing their supply chains. Hershey, for instance, has made notable improvements in the areas of water usage (total consumption is down 73 percent since 2009), zero waste to landfill (with 97 percent of U.S. production occurring at 12 zero-waste-to-landfill facilities), waste (down 38 percent since 2009) and emissions (down 22 percent from a 2009 baseline).
According to Andrew Ly, president and CEO, Sugar Bowl Bakery, their company is also streamlining its operations with an eye to sustainability. It has embarked on internal process improvement initiatives that reduce electricity, natural gas and water usage, while also reviewing its solid waste stream to minimize the amount going into landfills.
“In the near future, we plan to work with our suppliers to minimize the amount of packaging they use to ship components to us,” Ly adds. “Initiatives like investing in bulk silos, totes or super sacks for oil and sugar not only reduce our costs, but also eliminate paper bags going into recycle processes.” The company also recently made the switch from plastic containers to corrugated boxes in its own packaging and installed the largest solar panel system in Hayward, along with electric vehicle charging stations to encourage employees to purchase electric cars.
Les Lawrence, CEO, Lawrence Foods, Elk Grove Village, IL, cites three principles that support his company’s formal corporate commitment to sustainability. First, he says that he senses the growing interest in sustainability among consumers—and sees any efforts as a significant marketing opportunity. Secondly, focusing on sustainability not only helps the earth, but it also helps to cut costs in most scenarios, he adds.
But Lawrence’s third reason is one that isn’t often cited and reflects on a business’s own health when it commits to eco-initiatives: “We believe that the willingness of employees to invest their creative energies into their jobs is strongly influenced by the sense that what they do has importance beyond the generation of a paycheck for themselves and profits for their employer. We see a focus on the initiatives as a means of reinforcing that our employees are on a team that is a responsible corporate citizen, which in turn, sets an expectation for responsible, productive and respectful relationships.”
Lawrence Foods recently teamed up with engineers to analyze and implement a range of eco-friendly business practices, from optimizing lighting systems to bringing in highly efficient air compression systems. “In addition, concern for carbon footprint considerations has become a standard element of all ingredient, supply and capital expenditures,” Lawrence added.
Sustainable sourcing abroad
Camp believes that Hershey’s efforts in the area of cocoa sustainability distinguish the company. “Our primary approach has been to provide actionable information and meaningful training to the cocoa farming families of West Africa, where about 70 percent of the world’s cocoa is grown,” he says. “By leveraging technology, such as mobile and GPS mapping, and partnering with nonprofit and government agencies, we’ve been able to demonstrate improvements to social and environmental practices in the cocoa sector, ultimately leading to increased cocoa yields and increased incomes for these vital members of our supply chain.”
Hershey’s CocoaLink program, a mobile technology service that aims to improve incomes and livelihoods by sending timely farming, social and marketing information to cocoa farmers in 15 communities in western Ghana, has recently been awarded the P3 Impact Award for creating an impactful public-private partnership (see http://concordia.net/p3i/p3-impact-award.html).
At Cargill Cocoa & Chocolate, Lititz, PA, the Cargill Cocoa Promise focuses on improving the lives of farmers and their families and enhancing the future of sustainable cocoa, notes Courtney LeDrew, marketing manager for the company. “This can be achieved by increasing the yields and incomes of farmers,” she explains.
In July, Cargill announced a new Palm Oil Policy that builds on the company’s previous commitments to achieving a sustainable supply chain. “The policy covers no deforestation of high-conservation and high-carbon-stock areas, no development on peat, respect for land and labor rights, and inclusion of smallholders in the supply chain,” says Colin Lee, director of corporate affairs, Cargill Tropical Palm, Singapore. This policy is applicable to all of the palm produced, traded and processed by Cargill.
Additionally, in July, Cargill joined a group of growers, traders, end users and key stakeholders in the palm oil industry to create the “Sustainable Palm Oil Manifesto,” designed to build on existing sustainability commitments. “The manifesto aims to build traceable and transparent supply chains, accelerate the journey to no deforestation through the conservation of high-carbon-stock forests and the protection of peat areas, and include socioeconomic considerations for local communities,” explains Lee. “A study is currently underway to establish high-carbon-stock thresholds that take into account environmental, socioeconomic and political factors, as well as other practical considerations in developing and emerging economies where oil palm is cultivated.”
On the shelf
“Another major challenge facing baking and snack manufacturers is the threat of fully costed waste—product that expires on the shelf before it is ever purchased by consumers,” says Hansen. “This is where packaging plays a critical role, as it helps maintain freshness and extend the shelf life of products, which not only reduces food waste but also delivers a better brand experience for consumers.”
This also applies to post-purchase waste. For instance, packaging outfitted with flexible closure systems helps ensure that consumers can continue to maintain freshness and minimize waste at home.
On the manufacturing level, the Fresh-Lock Zipper Spool Recycle and Reuse programs at Presto Products divert the large spools on which the zippers are transported away from landfills. “There is no additional cost for participation,” says Hansen. “Presto simply hauls away the reusable spools upon delivery of the next shipment. We then provide a calculator tool to customers, so they can track their resulting sustainability benefits and leverage these details in their scorecard reporting to retailers and consumers.”
This communication can have a snowball effect. “Manufacturers can stand out in sustainability branding by helping consumers to act on the beliefs they already have, by inspiring customers to adopt new behaviors, and by being audacious and different in their approach, while still delivering a quality product at a sensible price point,” says Zalla. “Be consistent in messaging. Find creative ways to engage customers in the message through mobile apps and social media—and be bold by taking public stances on sustainability issues in public policy.”