A common enemy
A new line of aerosol cleaning products available at Wegmans Food Markets offers shoppers a unique value proposition. The Breathe brand is the first aerosol cleaning line ever certified by the Environmental Protection Agency’s (EPA) Safer Choice Program and represents a major technological advancement, according Ross Sklar, CEO of Breathe manufacturer Starco Brands.
“Breathe’s air powered technology is the future of aerosols by removing the toxic, flammable and carbon foot-printing propellants that make you need to open a window just to clean your bathroom,” Sklar said. “Wegmans has a history of supporting products that are both efficient and safer for people, pets and the environment.”
That support has earned Wegmans the Environmental Protection Agency’s Safer Choice Partner of the Year award for the third consecutive year. Decisions to offer shoppers a choice with brands such as Breathe is recognition that consumer culture is shifting in meaningful ways with a key driver being the concept of conscious consumerism.
“Brands are the new entry point for engaging consumers in climate action,” said Eric Pierce, Director of Business Insights for the NEXT Data and Insight group at the New Hope Network, organizer of the Natural Products Expo shows. “New product concepts that are positioned in part based upon their climate impact or environmental responsibility have a strong probability of success in the market.”
That is a powerful statement given overall high failure rates of new items. A brand such as Breathe, or any product with a sustainability message, still needs to sell at acceptable volumes and margin rates to retain distribution at Wegmans or any retailer. Pierce believes that with every passing day the likelihood of that happening increases and he has data on his side to make the case. Shoppers are willing to pay more for responsibly produced food, with 65 percent of millennials indicating they would pay more versus only 28 percent of baby boomers, according to New Hope Network research.
“It is the millennial consumer that is going to drive (sustainability) deep into commerce,” Pierce said. “Tomorrow’s consumers want brands that are of depth and character.”
The Breathe brand is the type of product with a distinct point of differentiation retailers claim they want suppliers to provide and one example of how retailers can show their commitment to sustainability through the assortment they offer. Other efforts aren’t as visible or as easy to execute as adding a new product. Just ask anyone involved in the work of reducing greenhouse gas emissions, driving supply chain efficiency or eliminating food waste. Even when there is buy in at the C-level, the education, cooperation and actions of countless mid-level managers and front line employees are required to get anything done. That was the case when Wegmans introduced zero waste pilot stores and began a food waste diversion program in those locations in 2001.
“It was an eye opening journey for our stores to see what is wasted. The perception is that sustainability costs more so it is important to let operators know than you are not looking to add complexity,” said Jason Wadsworth, Manager of Sustainability with Wegmans. “A new way of doing the right thing that makes jobs easier really resonates with folks on the front line because no one wakes up in the morning wanting to waste food. One of the easiest ways you can start tracking progress is to start separating organic waste. Begin at the diversion side and work back upstream to source reduction.”
The work and the supply chain implications of various actions is tricky stuff so Wegmans participates in the Food Waste Reduction Alliance, a collaboration between the Grocery Manufacturers Association, the Food Marketing Institute and the National Restaurant Association. Involvement with the group helps because, as Wadsworth puts it, “We are an inch deep and five miles wide in some of the areas that are really complicated. The opportunity for the future is to work with partners focused on food waste reduction on a day to day basis.”
Retailers sit in the middle of the sustainability and waste reduction equation, able to directly impact their own operations while influencing suppliers’ upstream and shoppers’ downstream behaviors.
“Food waste is our number one waste stream,” said George Parmenter, Manager of Sustainability with Delhaize America, operator of stores under the Hannaford Brothers and Food Lion banners. “We treat sustainability like a business function. We have quarterly updates to senior management and if we aren’t on track with our targets there is a remediation plan.”
The increased focus across the supply chain is yielding big wins, oftentimes from changed behaviors that can seem obvious in hindsight. For example, ConAgra was throwing away 1,000 tons of Snack Pack brand pudding because of a production line changeover. When a line would switch from one flavor to another a sort of mystery flavor would be produced during the transition. Rather than throw away the perfectly edible hybrid flavor the product is sold to jails.
Remediating production inefficiencies is fertile ground for manufacturers and then once products are shipped new technology is helping with issues such as cold chain compliance that can further reduce losses. For example, thanks to IoT sensors retailers are able to know on a pallet by pallet level whether goods on refrigerated trailers are kept at appropriate temperatures as opposed to simply knowing if the refrigeration unit ceased operation temporarily, which could result in the loss of an entire load.
“We are able to use digital information to reduce waste in a way that we never could before,” said Blythe Chorn, manager of sustainability with Deloitte Consulting. “We are really bullish on what can be accomplished with food waste reduction and we are seeing huge bottom line impacts. That’s when the CFO starts paying attention to food waste.”
Consumers are also paying more attention to food waste too and retailers have simplified that task thanks to new date labeling initiatives designed to reduce the volume of edible food thrown away, according to Andy Harig, Senior Director of Sustainability, Tax & Trade with FMI.
The Date Labeling Initiative joint effort between FMI and GMA began by identifying the nearly 50 variations of product date labels in use, including the dozen most commonly used, and distilling those down to two recommendations. The goal was to simplify consumers’ understanding by adopting the phrases, “best if used by,” and “use by,” so that products safe for consumption don’t end up in landfills.
The effort fits with the industry’s overarching sustainability agenda and recognition that what was seen as a fringe movement as recent as 10 years ago has developed into a mainstream motivator of shopper behavior.
“Sustainability is about business resiliency and the ability to operate long term. That is how you get the attention of the C-suite and the board,” said Jay Watson, Sustainability Engagement Manager with General Mills. “Responsible marketing is a big piece of it as well. It is important to have supply chain at the table with marketing to inform strategies. Big food is often synonymous with bad, but it should really mean big impact.”
Indeed, large companies are in a position to leverage their scale in ways that can have a dramatic impact in areas central to climate change, an issue which promises to intensify in the coming years regardless of the Trump administration’s view on the Paris Climate Agreement. Several major events promise to keep climate change atop global agendas include the Global Climate Action Summit scheduled for Sept. 12-15, 2018, in San Francisco and a planned United Nations climate summit in New York the third week of September 2019.
Experts and opponents on the issue can debate the extent of climate change, the timetable of change, the impact of humans and what if anything can be done to alter the planet’s weather. The reality for retailers and consumer goods companies is those most effective at reducing greenhouse gas emissions or broadly conserving resources will be best equipped to manage their expense structure, mitigate reputational risk and tap into shoppers’ evolving sensitivities. RL
“A new way of doing the right thing that makes jobs easier really resonates with folks on the front line because no one wakes up in the morning wanting to waste food.”
—Jason Wadsworth, Manager of Sustainability with Wegmans.