PwC
Sustainability Trade Research Study
November 2009
PwC
PwC
Contents
PAGE
1. Retailer interpretation on consumer understanding
03
2. Sustainability areas of key focus in short to medium term
08
3. Rationale for corporate sustainability initiatives
14
4. Examples of significant sustainability programmes
18
5. Overview of sustainability programme and initiatives across companies
24
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Section One:
The “sustainability” issues that retailers
identified as being relevant and
understood by consumers
PwC
Section One – The “sustainability” issues that retailers identified as being
relevant and understood by consumers
This section examines the level of understanding consumers have on sustainability as perceived by the retailers.
Retailers are in a position to quickly identify consumer trends and also through consumer enquiries the retailers
gain insights into consumer reaction and values. The retailers showed broad agreement on what they
considered as being the issues of interest to consumers at the present time. In this section the retailer
understanding and definition of “local” is presented.
The key findings are as follows:
•
Currently retailers believe that mainstream consumers are limited in their knowledge of sustainability. They
like to do the right thing but in reality consumers are not actively judging products for environmental impacts.
•
Retailers believe the environment is not yet a basis of choice among mainstream consumers.
•
The issues identified as being relevant and understood by consumers were local, animal welfare, fair trade,
organic and packaging & waste.
•
Other attributes such as biodiversity and pesticide use are gaining interest and prominence with consumers
in some markets such as Sweden, Italy and the UK.
•
Aspects such as “carbon” and “water” are not yet understood by the mainstream consumer. Hence these
aspects are not part of the present buying consideration of retailers. It is really only those issues that are
understood by the consumer that form part of the buying criteria. Therefore currently only “animal welfare”
and “local” will feature within the product specification / product supply selection criteria.
•
Clearly Ireland has an opportunity to develop compelling consumer messages based on sustainability
attributes and thereby build trust and generate a following among consumers and retailers.
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Retailers believe sustainability will grow in importance, and though currently
broadening in scope, it is not yet well understood by mainstream consumers
“A proportion of consumers will use
the environment as a basis for
choice, but in the mainstream
consumers will not necessarily stop
buying a product if the carbon
number is higher than peer products”
“Little by little consumers will become
more aware of sustainability but will not
pay more for it”
“Consumer has little if
any knowledge of
climate change /
methane emissions”
“Sustainability in the context of the
mainstream consumer is best
understood on two parameters only ‟
food miles and packaging ”
“Reassuring for consumers to
know that Sainsbury works with
farmers to ensure the products
are produced while protecting the
environment”
“Consumers want to make the right
environmental choices but are not
actively judging products against
environmental criteria”
“Currently it is animal welfare and food
miles that are important to Italian
consumer”
“Sustainability will become just as
important as food safety in the future”
“Sustainability is becoming an issue
and this movement is set to continue”
“Consumer has limited knowledge
on sustainability”
“Impact of carbon on consumer
purchasing at the moment is minimal”
“Media has created consumer
awareness around sustainability issues”
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Retailers identified “local” and “animal welfare” as the issues which are
currently most relevant and best understood by the mainstream consumer
Table : Summary of the priority issues
•Amount and type of
•Programmes with
packaging
farmers
Sainsbury
•Local Supply
•Animal welfare
Coop
•Origin / provenance
•Food safety
•No GMO feed
Conad
•Local
•Provenance
•Small artisan producers
•Focus is on the social
•Anticipating future
aspects (labour
conditions etc.)
regulatory cost of
carbon
Asda
•Local products (Best of
British)
•Animal disease
Tesco
•Quality is key
ICA
•Animal welfare
Delhaize
Mercadona
•Food safety (Belgium
and dioxin crisis)
•Animal Welfare
(consumer trust –
e.g. German & Polish
pork poor)
•Biodiversity (free-
range)
•Country of origin
•Animal welfare is
important (farm audits)
•Food safety
•Biodiversity
•Animal welfare
•Sustainable fishing
(Marine stewardship
Council approval)
•Food miles and
•Local sourcing
provenance
packaging understood at
consumer level
(local business
and economy)
•GMO free feed
•Local
•Quality
•Consumer trust/
•Animal welfare
•Reduce the
•Local
environmental
impact of products
•Must be trust-worthy
(credible)
•Packaging
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….in addition, consumers are concerned about packaging. Also the “fair trade” and “organic” themes are well understood and accepted among the
more concerned consumers
Table : Summary of the priority issues
•Support small
System U
•Local products
Esca
•Animal welfare
McDonalds
•Local wherever
possible
business / artisan
companies
•Local when
possible
•Organic has grown
•Carbon, water,
•issues such as
over the last 3 years,
currently expanding
from 250 to 400
products
biodiversity not
emerging yet as
consumer
issues
feed traceability,
GMO and
pesticides may
emerge
•Packaging reductions
/ optimisation
•Origin
•Animal welfare
•Food safety
•Fair trade
•Local
•Requesting details
Casino
Morrison’s
•Organic
•Local
(britishness)
•Animal welfare
on the environmental
impact of products
•Regional offers /
products
•Environmental
Albert Heijn
Unilever
Marks & Spencer
•Animal welfare
•Fair grower
income
•Waste reduction
•Organic
•Fair trade
•Deforestation
•Animal welfare
•Animal welfare
•Biodiversity
•Waste reduction
•MSC certified
fish
•Pesticide use in
•Nutritional
agriculture
quality
•Provenance
(regionalisation)
issues (CO2,
climate etc.)
coming
•Fair trade
Current buying criteria focusing on local, animal welfare standards and fair-trade
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Section Two:
Sustainability areas of key focus in
short to medium term
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Section Two – Sustainability areas of key focus in short to medium term
This section covers the approach being taken by the retailers in addressing sustainability. We also outline the
issues that are of immediate concern and profile those issues that retailers expect to grow in importance over
the coming years.
The key findings are as follows:
• NGOs are seen as holding significant influence, retailers now realise the need to engage with NGOs in
understanding their positions. The retailers are acting on those topics that matter most to the NGOs and are
enlisting NGO support to endorse the work being done by the retailers.
• While animal welfare is very much a current issue the considered view among the retailers is that it will
remain to the fore and many expect that increasing attention will come to bear on animal welfare conditions.
• All retailers have a reliance on farm assurance schemes that are independently certified. These schemes are
progressing from quality assurance towards environmental assurance. Hence the emerging focus is on
measuring the environmental aspects of food products and farming.
• While all retailers have already done a level of LCA analysis, the leaders will be asking food producers to
deliver carbon reductions. Some are now using the term “low-carbon” farming. Some retailers have already
started discussions with suppliers on addressing climate and carbon.
• After carbon, retailers are expecting that water, pesticides and biodiversity will become the key issues.
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Companies are proactive in relation to engaging with NGOs
This engagement identifies the issues of concern and provides feedback on specific areas of activity. The NGOs
bring expertise on specific questions as well as the networks to deliver practical initiatives on the ground.
The role of the NGO is exemplified in the path towards developing a sustainable supply chain for palm oil. The
move towards a certified sustainable source of palm oil occurred over a 10 year time-frame. This only happened
after co-operation across both the large and small growers together with a multi-stakeholder approach involving
governments, processors, manufacturers, growers and NGOs, all participating in the Roundtable on Sustainable
Palm Oil (RSPO).
The NGOs play a key role in promoting change within the industry, this is especially important where supply
chains are fragmented across multiple participants.
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Some companies are raising the bar in relation to “environmental” and
“climate” issues by introducing additional schemes / programmes.
There are several farm assurance schemes in operation, McDonalds estimate that across Europe they work with
over 300 such schemes. Those schemes that receive independent certification are judged as representing more
stringent standards. Some retailers expressed the view that they will continue to work with the existing farm
assurance schemes and are not setting out to develop additional standards.
However a number of retailers including Albert Heijn, Marks & Spencer and Sainsbury are developing their own
schemes aimed at measuring the environmental standards and capable of demonstrating the environmental
benefit of such standards. These initiatives represent a migration from quality assurance to environmental
assurance. It is expected that the additional schemes will create a point of differentiation in the market.
All retailers and customers are looking for continuous improvement, even within the existing schemes
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Carbon is clearly an emerging issue with most retailers already working on it
Up to recently there were few examples of low carbon foods, however in July ASDA issued a press release in
relation to its low carbon beef programme. ASDA worked with its suppliers to put in a place a low-carbon beef
supply chain which will prove beneficial in the event of regulatory initiatives introducing carbon taxes.
New Zealand lamb is considered as representing a low-carbon supply chain, this has been validated in
published studies. The impact of this work is such that New Zealand is now exporting its lamb genetics to the
UK. Marks & Spencer are currently doing their own validation work on low-carbon lamb and should the lowcarbon status be validated they will communicate and promote this aspect.
The key customers are expecting that the livestock sector will work on carbon reduction initiatives.
Carbon measurement
Pasture - carbon sink?
Min Till / Zero tillage
Soil organic content
Methane
Feed additives
Nutrient planning
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While “local” dominates the current agenda, many of the key customers are
looking ahead and addressing those aspects likely to gain greater importance
Consumers asking for more information on the nutrition of products, and show increasing concern on the type of
feed and the use of pesticides. GMO remains a concern in Sweden, Italy, and France where both Casino and
Systeme U drew specific attention to the GM issue.
Many retailers identified water as a key issue and are beginning to take action in the area, with some suggesting
that they are now doing measurement on water similar to the initial work done on carbon three to four years ago.
Marks & Spencer is now working with WWF to develop a water plan for the supply chain and identifying
“hotspots” where they will work with suppliers
Many retailers are phasing out the use of pesticides ahead of EU legislation, some have even launched
“Pesticide Residue Reduction Network” with supplier to reduce the use of pesticides / fungicides and develop
alternatives to pesticides.
Biodiversity is also gaining attention, many retailers developing measurements to demonstrate the benefits.
Deforestation
Pesticides
Water
GM food
Biodiversity
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Section Three:
Rationale for corporate sustainability
initiatives
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Section Three – Rationale for corporate sustainability initiatives
This section provides an overview of where companies are positioned in relation to the role of sustainability. We
have clustered the strategic objectives into two thematic areas and have mapped the companies against the
thematic heading most relevant to them, as determined from the consultations.
The key findings are as follows:
• There is one group of companies clustered around the theme of protecting the reputation. These companies
are committed to complying with the law, they see “sustainability” as growing in importance and believe it will be
as critical as “food safety” in time. However these companies do not subscribe to the view that “sustainability”
will build competitive advantage or that consumers will pay extra for sustainability.
• On the other hand are those companies that believe “sustainability” will build brand value. These companies
have a view that consumers will pay extra, they see “sustainability” as being a route to creating a USP and a
point of differentiation.
• Those companies that now recognise sustainability for the potential to build competitive advantage previously
belonged to the group that acted solely with the interest of avoiding reputational damage.
• The message among the leaders is that a lack of action leads to market share loss and reputational damage,
whereas a proactive approach will win market share and business.
• Some companies are now integrating “sustainability” into their value proposition. These companies are
using elements within “sustainability” as building blocks in delivering the product offering. Increasingly these
“sustainability” aspects are embedded within the marketing activity and consumer communications.
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Strategic role of Sustainability varies
Build brand value
• Offer something extra
• Value for values
• Point of differentiation
Reputation
• Answer the accusation
• Robust defense
• Compliance with the law
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Some retailers are beginning to examine products and identify sustainability
aspects that offer additional value / differentiator
Those companies that are committing significant resources to sustainability are beginning to identify the value
attaching to sustainability for themselves, their suppliers and their customers.
Albert Heijn awaits the performance of its “Pure and Honest” brand following the launch in September, 2009.
The retailer will have a measure of the consumer reaction and will discover the extent to which consumers are
willing to pay for the value of sustainability within the product.
Good for
growers /
farmers
Good for
animal welfare
Good for the
environment
Good for
consumer
health
Value of Sustainability program
Sainsbury has identified that consumers are looking at four levels of sustainability, they are looking for products
that are good for the health, good for the environment, good in terms of animal welfare standards and make a
social contribution through supporting farming communities. These aspects provide for a level of differentiation
and consumers will increasingly value these additional standards.
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Section Four:
Examples of significant sustainability
programmes
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Section Four – Examples of significant sustainability programmes
This section outlines some examples of farm programmes which companies are undertaking. Sainsbury,
McDonalds and Marks & Spencer all operate special farmer programmes, this section examines the main
highlights and reviews the key objectives of these programmes.
The key findings are as follows:
•
A common objective across the programmes is to improve the environmental performance. In this regard all
the programmes are aiming to develop key indicators which are measured so that environmental
improvement can be demonstrated.
•
Sainsbury define these indicators within their “environmental scorecard” and hence farms are benchmarked
against performance on this scorecard. McDonalds are measuring performance against the “McDonalds
Agricultural Assurance Programme” (MAAP) which is defined across 6 policy areas. Marks & Spencer is
expanding its select farm audit programme to include environmental criteria, such as biodiversity, and is
currently piloting the initiative.
•
Both the Sainsbury and McDonalds work is focused on reducing on-farm energy use as an enabler to
delivering improved environmental performance.
•
All the companies seek independent certification for their programmes which provides credibility. The Carbon
Trust has worked with both McDonalds and Sainsbury, while Marks & Spencer have availed of the expertise
of WWF and Royal Society for Protection of Birds (RSPB). The intention is that through these programmes
the companies can provide consumers with assurance that high standards are being achieved.
•
Continuous improvement is a key element behind all programmes
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Sainsbury has initiated a programme of direct engagement with farmers – the
Sustainable Dairy Development Group. Sainsbury is committed towards
developing dedicated supply chains
This initiative aims to achieve the following objectives
•
To reduce the environmental impact
•
To provide consumers the assurance that farmers are focused on protecting the environment.
The programme is aimed at working with farmers on three elements. Firstly to focus on the on-farm energy
use. This will reduce the input costs while at the same time reducing the environmental impact. The second
element is to focus the farmer on herd health & husbandry. The third element is to generate a farm business
improvement, this could include developing additional value chains on the farm.
1.On farm energy
use
Environmental scorecard:
„
„
„
„
„
„
„
Nutrient testing of soil
Nutrient testing of manure
Water, rainwater, run-off water
How energy is purchased
Level of recycling
Calibration of fertiliser spreaders
Diet reformulation
2.Herd health /
husbandry
Managed by third party
company “AB Sustain”
Farm results pooled and
classed into areas of red,
amber, green
3.Farm business improvement
Sainsbury’s Goals:
„ Achieve security of supply
„ Long term becomes business as
usual
„ Farms become commercially
sustainable
Participating farms are paid a
premium over the base
market price
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Since 2001 McDonalds has operated their own “Sustainable Agriculture
Programme”. This programme audits each direct supplier annually against
the McDonald‟s standards.
The “McDonald‟s Agricultural Assurance Programme” (MAAP) is the approach to assess the agricultural
production standards employed in growing the farm products used in McDonald‟s restaurants. The aim of this
approach is to raise the standards employed on farms and covers the core agricultural products of beef, chicken,
eggs, milk, cheese, potatoes, wheat, lettuce, tomatoes and cucumber.
The MAAP programme sets standards across 6 policy areas. These aim to protect the environment from
pollution of air, land and water, minimise the production of greenhouse gases and protect natural habitats.
Promote farming that preserves the ecosystem, biodiversity and the rural landscape.
McDonalds’ supply chain works with approximately 300
different farm assurance schemes in Europe. McDonalds
conducts a gap analysis for each scheme against its own
McDonald’s standards. McDonalds use these existing
farm assurance schemes to monitor suppliers and farms.
The overall aim is to set targets and drive continuous
improvement through the supply chain.
As part of the MAAP programmes McDonalds monitor
the following 6 areas of agricultural production:
Environmental
Animal health
1
Agricultural practices
4
Transparency
2
Animal welfare
5
Genetics
3
6
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McDonalds is starting an “on-farm carbon audit model” in association with
the Carbon Trust. McDonalds will make public the results of this on farm
measurement
The Flagship Farm project builds on the MAAP approach, identifying progressive farmers that exemplify good
practice in specific areas of economic, ethical and environmental sustainability. The intention is to share these
good practices with other farmers and to incorporate into the MAAP standards, thereby continually raising the
standards.
McDonalds through Esca is measuring the footprint across 300 beef farms. Esca selected 6 suppliers, who each
in turn selected 50 farms. The selection process was such that the farms represent a cross section, covering
both intensive and extensive production systems. McDonalds worked with the carbon trust in developing the “onfarm audit tool” and will make the results public. The programme of on-farm measurement will run over a 3 year
period with annual measurements.
The aim is that this measurement will focus the farmers on energy use which will lead to reductions in emissions
but provide cost savings for the farmer. Hence energy reduction will drive the environmental improvement.
McDonald’s Criteria for assessing Environmental good practice
Irish farm selected as the flagship farm for Beef
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Marks & Spencer operates a farm programme aimed at sourcing as much
food as possible from the UK and Republic of Ireland
Marks & Spencer operates a sustainable farming programme which aims to improve environmental performance
in the food chain. The aim is to develop independent standards together with food producers and food
processors, these standards can demonstrate environmental benefits. This programme is not with suppliers
contracted exclusively to Marks & Spencer, the exemption of dedicated suppliers is in the case of milk.
Marks & Spencer has been running their “Select Farm Audit” scheme and are now expanding the scheme to
include criteria which will further measure the biodiversity and animal welfare impacts on the farm. The intention
is that these additional environmental standards will measure and demonstrate the environmental benefits that
result from the additional requirements.
Marks & Spencer is developing these environmental measurements with WWF, the Royal Society for the
Protection of Birds (RSPB) and Linking Environment And Farming (LEAF), so that improvements can be tracked
Retailer
Processor
Farmer
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Section Five:
Overview of sustainability
programme and initiatives across
companies
PwC
Section Five – Overview of sustainability and initiatives across companies
This section reviews the main themes that underpin the work being done across companies. While each
company is doing its own specific work, there is a level of commonality. Companies can be clustered into
groupings on the basis of overlapping strategic objectives. The section also includes a series of summary tables
that capture the aspects highlighted in the consultations as best defining the initiatives, key goals and approach
in each respective company.
Key findings are:
• There is a level of overlap in the strategic objectives across companies with three groupings identified. There
is one grouping aiming to lead the industry and these are attempting to build competitive advantage through
sustainability. The second grouping are those that are adapting a defensive approach and are largely
concerned with mitigating reputational risk. The third grouping are essentially the followers who are still in the
early stages of sustainability. For this grouping the focus is still very much on the internal operations.
• The indication is that over time sustainability will become business as usual, with every company aiming to
build competitive advantage.
• There are some clear overarching strategic positions such as achieving security of supply, reducing the
environmental impact, enriching biodiversity, establishing leadership on issues such as low carbon and water.
• The focus varies from country to country. In France ,labelling appears to dominate the sustainability
programme. This stems from the Grenelle Law which makes environmental labelling mandatory from 2011. In
the UK, security of supply is a key issue for companies, partly due to the fact that there is a preference for
local and regional products and hence the companies need to sustain local food production.
• Farmer programmes are being launched to address the security of supply risk and also to measure
environmental performance. The companies aiming to lead on improving environmental standards are working
to impose additional standards backed by credible farm assurance schemes.
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Goals and rationale behind retailer initiatives
• All the customers are doing sustainability initiatives, however the scope and depth of activity varies
across the retailers. Some such as Delhaize, System U, Conad, Morrison's are still in the early
stages with the main focus on the internal operations. This group are not making public commitments
and will not be putting forward ambitious plans, they are however committed to playing their part in
the industry.
• At the other extreme is the group aiming to lead the industry. Among these are Marks & Spencer,
Sainsbury, Albert Heijn, Unilever and the objective is to build competitive advantage. These strongly
believe that sustainability will differentiate them from the competition and will be a key growth driver.
• There is also a set of companies such as Asda, McDonalds and ESCA that are concerned about
reputational damage and future regulation. The threat of future regulation is prompting these
companies to engage and understand sustainability and its impacts for their businesses.
• All companies have already undertaken LCA studies on both the internal operations and on selected
products. Some are aiming to reduce the impacts while others aim to have sufficient information so
they can respond to potential questions and be ready for external accusations
•Reassure the
Sainsbury
•High yielding farms
consumer that
Sainsbury growers
are protecting the
environment
•Sainsbury
•Achieve long term
•Develop dedicated
security of supply
supply chains
•Reduce the carbon
•Promoting biodiversity
footprint of operations
and agro-biodiversity
on various meat
products to build
knowledge
•Study sustainability
•Long term expecting
•LCA being conducted
and understand the
impacts
sustainability to be as
critical as food safety
on yogurt to understand
what is involved
•Anticipate issues &
•LCA conducted on 100
•Lamb link programme
•Regional
prepare responses at
corporate level
farms to gather data for
„sensible debate‟
with local farms
(saves road miles)
sourcing helps
reduce food miles
perform best on
environmental standard
customers
demand local
product.
•LCA being conducted
Coop
Conad
Asda
•Anticipate future
regulatory change
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Goals and rationale behind retailer initiatives contd.
• Security of supply is an important goal for companies, especially Sainsbury, McDonalds and Esca.
Sainsbury‟s customers “demand local products” and therefore Sainsbury needs to ensure it can provide
local products over the long term. Hence Sainsbury is building dedicated supply chains with farmers.
Likewise Morrison‟s being committed to British food are concerned about future supply.
• Regional sourcing is a common theme with all the UK retailers. M&S define regions at the country level,
whereas Morrison has identified seven regions within England in addition to the Scotland and Wales
•Price and
Tesco
value are the
current drivers
•„Feed the family for
less‟
•Reduce the
ICA
environmental
impact with
younger
animals at
slaughter
•Reduce the level of
packaging and
transport impacts
(larger unit pack size)
•In Belgium the
Delhaize
priority is
energy
conservation in
the internal
operations
•Key driver is animal
welfare
•Aim to adopt sound
•Quality issue in
environmental
practices, committed
to environmental &
social issues
2007 when stores
changed the expiry
date on meat
products
•Considered a broad
•Has not extended
the boundary back to
suppliers yet
issue and is an
umbrella for a range
of issues
•Concerned that
green-washing is
creating confusion
•Animal welfare not
considered a big
issue in Belgium
•Currently
Mercadona
preparing for
the future, see
it as an
emerging issue
•Converting all
Marks & Spencer
fresh turkey,
duck, geese
and pork to
free range
•Reducing energy in
the internal
operations
•Launched plan A in
•Sustainability is a
January 2007, plan A
set our a 100
commitments across
the important social,
environmental and
ethical challenges
driver of competitive
advantage and is
seen as a point of
difference between
M&S and other
retailers
•Core values to M&S
include quality, value,
service, innovation
and trust. Building
“trust” on
environmental and
social issues is
critical for M&S
•M&S is pushing
ahead on issues
such as water and
is developing a
water action plan
with WWF for the
whole supply chain
•Continues to
•Key focus on
source
sustainable
wood, cotton
and fish.
certification by
credible
independent
schemes
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Goals and rationale behind retailer initiatives contd.
• A number of companies are committed to reducing the environmental impacts and are developing
programmes with farmers that measure the benefits. McDonalds and Sainsbury have had their separate onfarm methodologies accredited by the Carbon Trust. Marks & Spencer has developed its on-farm
environmental indicator framework with the assistance of WWF and RSPB. Unilever branded their on-farm
programme for milk as “Ben & Jerry‟s caring dairy”.
• Many of these programmes are imposing additional standards and to ensure credibility they are
independently certified.
• There is a progression towards the concept of “low-carbon farming”. Marks & Spencer see this as the
ultimate goal, while both Albert Heijn and McDonalds stated that they will be seeking carbon reductions
•Beginning to
•Internal focus on
LCA work
evaluate the
environmental
impacts of the
private label range
energy
conversation in the
stores and efficient
transport
•Grenelle makes
•Participating in
environmental
labelling mandatory
from 2011
workshops
regarding Grenelle
(AFNOR, FCD)
labelling, may go
beyond CO2 to
pesticides and
other impacts
•Concern that current
•Doing the carbon
•Significant focus
with buying
strategy focusing
on the long-term
supply chain
structure is not
economically
sustainable
measurement at
farm level in
response to the
accusations
on audits/ KPI
measurement and
continuous
improvement
suppliers to act
now on the
environmental
aspects ahead of
they becoming
legislation
•On farm carbon
•In beef looking for
•Annual supplier
•A key task is to
•Inform NGOs on the
address the
misinformation
around carbon
work being done e.g.
Sustainable
Agriculture Program
audit to provide
robust data in
readiness for
external
questioning
GHG emission
reductions, will
only talk about the
reductions not the
actual number
auditing
programme,
extends to 300
farm assurance
schemes
•Not going public
System U
Casino
with sustainability
targets
•The Grenelle Law
is the key driver
•Just beginning with
•Extensive work on
•Animal welfare not
•Strongly
•Key focus is
a consumer issue
but governed by
regulation
influenced by
pressure from
domestic farmers
sourcing fish
products with
MSC label
•Only providing
•Sustainability is
not yet embedded
in the buying
strategy
information, not
yet judging
products on
sustainable
impact
•Encouraging
•Assured supply
Esca
McDonalds
•Starting work on
water footprint
measurement
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Goals and rationale behind retailer / food manufacturer initiatives contd.
• In France regulation is having a significant impact. The “Grenelle Law” is shaping the direction for French
companies and from 2011 environmental labelling will be mandatory.
• Biodiversity is now gaining attention from more retailers. Marks & Spencer, Co-op Italy, ICA all identified
biodiversity as a key activity and are working towards enhancing the biodiversity.
• Companies are also adding water to their activity programme. McDonalds and Marks & Spencer both outlined
their initial efforts in measuring water across the food supply chain.
•Not committing to
•Strategy based
Morrison‟s
on supplier
compliance with
the law
•Sustainability
Albert Heijn
Unilever
adopted by the
board as a
strategic goal
aspirational
statements, as
they will not invest
in additional
auditing /
validation of
aspiration
•Vertically
•British origin is the
priority area, may be
at risk depending on
future CAP reform
•Sustainability
•Increasingly more
seen as a driver of
future growth and
a key point of
differentiation
initiatives with the
NGOs e.g. Dutch
RSPCA and “Better
life” label
•Want to lead in
•Since 2005
those industries
where Unilever
has a significant
buying position,
particularly in oils
and tea
assessing brands
on social &
environmental
aspects using a
process called the
“Brand Imprint”
integrated model
but do not contract
directly with
farmers (no
dedicated farm
supply yet)
sustainable farming,
climate change
(carbon reduction),
water stress,
resource use.
farm assurance
schemes, not
imposing additional
requirements
•Promoting higher
•Specific work on
animal welfare
standards with
selected Irish farms
•The consumer
•The key issues are:
•Accept existing
relevant issues are
animal welfare with
the move towards
cage free eggs.
Also deforestation
is a key issue in
relation to palm oil
standards and
setting out
additional
assurance
schemes
•A number of
initiatives and
collaborations with
NGOs e.g.
Rainforest Alliance,
Greenpeace,
Compassion in
world farming,
UNICEF,
•Supporting
•Will play their
research on the
commercial and
environmental
sustainability of
farming
part within the
industry but will
not be increasing
their efforts on
carbon and water
•Looking for
reductions /
improvements in
GHG emissions at
farm level
•Ben & Jerry‟s
Caring Dairy works
with farmers, who
are using fewer
pesticides,
converting bio-gas
into energy and
maintaining high
standards of animal
welfare
•Unilever keeps
the most
significant issues
under review and
through a
process of
“issues
management”
continually tracks
the current and
emerging issues
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PwC
Retailers are rolling out a number of sustainability related initiatives ..……….
e.g. “low carbon eggs” in Asda….. “biodiversity beef” in ICA
• In the current economic climate many retailers are focused on offering value to consumers, for Sainsbury
this is communicated through the campaign slogan “feed the family for a fiver”
• Sainsbury launched the “Sainsbury Dairy Development Group” to help farmers create a more sustainable
Sainsbury
Sainsbury Dairy Development
Group
Coop
supply of British milk. The scheme is intended to drive profitability for dairy farmers by implementing
efficiencies. The key goals of the programme are to improve herd health and husbandry, reduce or enhance
the environmental impacts, and improve the business viability for farmers. Famers are paid a premium for
being part of the scheme.
• Co-op is investing resources into biodiversity and recently published a paper on agriculture and the role and
impact on biodiversity
• While ASDA presents the view that consumers will not pay a premium for sustainable products, they are
supporting the “Respectful Free Range Egg” brand.
• This is a free range egg source exclusive to ASDA which has been branded as “Respectful” to reflect the
Asda
superior sustainability credentials.
• These eggs are produced using hen housing supplied by a combination of wind and solar energy and
therefore the eggs are considered low carbon. The carbon footprint is estimated to be half the carbon
footprint of the conventional production systems
• ICA remains committed to organic products and extended the range from 370 products in 2006 to 660
products in 2008. ICA has developed the umbrella brand of “ICA I love ECO” for its organic range.
• ICA has two sustainable beef offerings, the “selection range” and the “free range” offering
ICA
• The selection range is based on Irish beef and is promoted as “beef from the open fields of Ireland”. Here
the sustainability focus is on the animal welfare standards.
• However the more sustainable offer is the “free-range” beef, which was launched in association with WWF.
This project began as a way to preserve biological diversity in Sweden where 32,100 hectares of
pastureland have been restored.
• “Home” is a movie produced by the French film director Yann Arthus Bertrand.
• The movie was distributed free over the internet with a story line highlighting the dangers of global warming.
Delhaize
• The movie drew attention to the food chain and in particular livestock products in western diets and the
negative environmental impacts of such production systems.
• Delhaize suggested the showing of similar movies will influence consumer behaviour in future years.
• Delhaize highlighted one impact being the town of Ghent proclaiming Thursday as “veggie day”
30
PwC
Retailers are rolling out a number of sustainability related initiatives
………......…..Unilever‟s “Sustainable Agriculture Programme”
……………... Albert Heijn promoting “animal welfare” with “better life” beef
• Nutrition and obesity is not only a consumer issue but is a public health issue. Unilever‟s approach has
Unilever
been three fold: reformulating products to better nutritional profiles; developing products that deliver
positive health benefits and improving consumer information through marketing and communication
• The basis of the communication is to provide simple clear labelling and consumer information
• The Choices Programme uses a front-of-pack stamp to enable consumers to identify healthier products,
foods that are in line with internationally accepted dietary guidelines
• Unilever set up a “Sustainable Agriculture Programme” in 1997 based on specific guidelines covering 11
Unilever
aspects of farming including: water, pesticide use, energy, biodiversity, social capital and animal welfare
• Today the aims are as follows: improve the soil fertility, enhance biodiversity, protect and enhance water
availability, ensure viable farm income
• Priority crops are where Unilever purchases a significant share of global supply as with Tea, Palm oil. The
aim is to buy Tea from farms certified by the Rainforest Alliance and certified sustainable palm oil
• Another key priority is animal welfare and for Unilever products the concern is “cage free” eggs. In this
regard Unilever is committing to cage free eggs across Hellmannn‟s, Amora, Calvé and Ben & Jerry
brands
• In September 2009 Albert Heijn launches a new umbrella brand “Pure & Honest”. This represents a
Albert Heijn
sustainable offering to consumers and is priced at a premium above the standard private label offer. The
premium is much less than that asked for on organic products.
• Pure & Honest represents products grown or sourced with extra care for the environment, animal welfare
and social conditions for people
• Pure & Honest takes account of fair trade, local buying, carbon miles, biodiversity, animal welfare
• The brand will appear across a range of products such as rice, toilet paper, dairy, meat
• In September 2009 Albert Heijn launches the “better-life” label on beef. This sets a standard for animal
welfare and is certified by the Dutch Society for the protection of animals (Dutch SPA).
Albert Heijn
• The beef is Irish beef, and was chosen given that it is “better-life” than Dutch beef, grown outdoors on
grass, more space per animal, better climate for grass, animal welfare standards regarding use of
anaesthetics
31
PwC
Retailers are rolling out a number of sustainability related initiatives
……Morrison‟s “regional milk”…..Conad‟s local brand of “Sapori & Dintorni”
• Local sourcing defines sustainability in Morrison‟s, with the priority to be closer to source. Morrison‟s
Morrison’s
place a big emphasis on British food and claim to be the first of the large supermarket to sell 100%
British fresh meat throughout the year.
• Morrison‟s are providing regional products to consumers and in the case of fresh milk work with Dairy
Crest and Robert Wiseman to segregate milk from the regions, Morrison is not working with milk
suppliers directly. Morrison‟s aim to source milk from seven regions in England in addition to all
Scottish and Welsh own-label milk.
• Casino is actively promoting awareness around ecology and environmental issues. One of the
initiatives from Casino is one where they offer consumers a car pooling service.
Casino
• Casino strongly advocates the carbon labelling approach and supports the idea of providing
environmental information on the label and extending beyond carbon into pesticides, water and other
impacts.
• Casino is advocating that farmers be proactive in taking steps to reduce GHG emissions
• Conad has an umbrella brand “Sapori & Dintorni” representing locally sourced products
Conad
• The literal translation for “Sapori & Dintorni” is “flavours and surroundings”
• The range includes 120 products which are produced by small artisan producers
• Tesco had a very positive view of Scotch Beef , especially in terms of consumer eating preferences. It
was considered more premium.
• Scotch beef was seen as representing a set of positive attributes such as provenance, heritage, quality
Tesco
genetics, consistency in eating quality.
• The sustainability paper from QMS Scotland was welcomed by the retailer
• Tesco expressed a view that in the short term the main focus was on value for money and “feeding the
family for less”, however post the economic downturn consumers are expected to seek out additional
values and trade up the notches again
• Marks & Spencer launched Plan A in January 2007, setting out 100 commitments on the most
Marks & Spencer
important social, environmental and ethical challenges, annually M&S are reporting on progress against
the targets set for these commitments
• Plan A consists of 5 pillars, i.e. climate change, recycling & waste, sustainable raw material, fair
partner, health.
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