Green Grocers

Consumers are voicing their opinions louder than ever about how their food is produced, how far it travels, and how the companies selling it do business.

But the food industry also is committed to sustainability in its own right—and rightfully so, say industry observers.

"The [sustainability] progress in the food industry is not being driven by consumers. It's being driven by visionary companies that see what's going to happen if we don't start sourcing our products in a more green and responsible way," contends Jeanne von Zastrow, senior director at the Food Marketing Institute in Arlington, Va.

The food industry is paying attention to issues like energy consumption and environmental impact partly because global population growth will require it, she says. "We know that when there (are) 9 billion people on this Earth, we're going to have some serious problems with food. If we're more responsible now, we'll be in a much better place than if we just ignore it," she says.

Getting a handle on sustainability

The definition of sustainability varies from company to company, and the lack of clarity can lead to confusion. "What is the most troubling for everyone is that sustainability doesn't have a definition," says Karen Karp, president of Karp Resources, a New York food and agriculture consulting firm, and a member of the Sustainable Food Lab's leadership team. "Individual companies need to establish their own sense of what's important to them," she says.

But "the simplest definition, which transcends any industry, is making sure your actions today are leaving something for future generations," says Nate Schlachter, executive director of the Food Trade Sustainability Leadership Association in Portland, Ore.

What is sustainability? "The simplest definition, which transcends any industry, is making sure your actions today are leaving something for future generations."

—Nate Schlachter,

Food Trade Sustainability Leadership Association

Sustainability is a huge topic that starts at the producer level and continues through the supply chain to retailers. It includes everything from raw ingredients to packaging to the way manufacturers and retailers build their facilities and care for their customers and employees.

"Five years ago, companies didn't want to talk about sustainability."

—Karen Karp,

Karp Resources food and agriculture consulting firm

However it's defined, the issue is picking up steam, Karp says. "Five years ago, companies didn't want to talk about sustainability," she says. They also didn't want to spend money on what was considered a "luxury concept." But that attitude has changed. "Enough awareness has been raised on those issues for major brands to say, 'We've got to do something about this," Karp says.

In late June, Minneapolis-based Supervalu announced plans to turn 40 locations into "zero-waste" operations this year by diverting from landfills at least 90 percent of the waste the stores produce. The company, which operates about 4,300 stores, reported that it was the first food retailer to achieve zero-waste status last year when two Albertsons locations contributed almost nothing to landfills by emphasizing recycling and composting and making donations to food banks. The effort is part of a larger goal to reduce Supervalu's landfill waste by 50 percent in five years, according to the company's corporate social responsibility report.

In fact, setting a goal often makes a difference. Cincinnati-based Kroger Co., which has created annual sustainability benchmarks, has cut the amount of waste its manufacturing plants send to landfills by 30 percent—22 million pounds—since 2009, the company reports.

Kroger also has reduced in-store energy consumption by 30 percent since 2000, and its goal is to reduce its stores' overall energy use by 35 percent by 2013. At the same time, by promoting reusable bags, Kroger saved 159 million plastic bags from use last year and wants to save a billion plastic bags from use by 2014. Along with its customers, Kroger recycled 26 million pounds of plastic last year, up 180 percent from 2007, the company says in its 2011 sustainability report.

The sustainability trend is trickling down to entrepreneurial grocery retailers as well. Urban Orchard, a new Chicago-based boutique grocer, aims to "act as an everyday farmers market" with food sourced from Midwestern states, says vice president Eric Mazzone. When building out the company's first location, which was scheduled to open in mid-August, Mazzone chose reclaimed barn woods and other existing materials for an environmentally friendly approach. "We think it's the right thing to do," he says.

Green from green

Being a sustainable business means making decisions with a triple bottom line in mind—people, the planet and profit, says Wendy Berger Shapiro, president of WBS Equities, a Chicago real estate consulting firm with a focus on green food manufacturing and distribution. Shapiro recently served as project consultant on a new 86,000-square-foot distribution center for Chicago-based Testa Produce, which includes a 750-kilowatt wind turbine that will produce about 880,000 kilowatt hours of energy per year, a solar hot water system, a 45,000-square-foot green roof, a 5,000-gallon water reclamation system and a 765,085-gallon retention pond.

While few food companies can afford to build green facilities from the ground up, retrofitting an existing space with T8 fluorescent lighting helped cut related energy usage by 62 percent at Grecian Delight Foods, which produces flat breads, dips, spreads and specialty meats in Elk Grove Village, Ill., says Jeff Derr, senior manager of retail marketing and sales. What's more, the company has increased its use of recycled materials by 50 percent during the past two to three years, he says.

"We all need to be responsible corporate citizens and custodians for our environment," Derr says. "Not only is it our own responsibility to be that way, the population as a whole is demanding it."

Green energy is increasingly becoming more visible. In February, Campbell Soup Co. announced plans to build a 9.8-megawatt PV solar power system consisting of 24,000 high-efficiency solar modules at its 60-acre Napoleon, Ohio facility. The solar system will provide about 15 percent of the plant's electricity annually, or more than 14.7 million kilowatt hours during the first year of operation, the company says. Campbell is targeting financial savings of up to $4 million over 20 years, while the project is expected to eliminate 250,000 metric tons of greenhouse gas emissions, the company reports.

In Lancaster, Pa., Kroger recently added two wind turbines at its Turkey Hill Dairy. The company expects the turbines to supply 25 percent of the dairy processor's electricity, or enough power to produce 6 million gallons of ice cream annually, ac cording to Kroger's 2011 sustainability report.

And in Fairfield, Conn., Whole Foods Market has installed its fourth fuel cell system since 2008. The alternative energy system is expected to produce 90 percent of the store's electricity, while preventing more than 847 metric tons of carbon dioxide from being released. The byproduct thermal energy will provide heating, cooling and refrigeration energy, and the PureCell System Model 400 fuel cell will help save 3.5 million gallons of water annually.

Wrapping it up

Building construction and improvement is one aspect of sustainability, but smaller, more manageable steps also contribute. Among other environmental focuses, the food industry is working to reduce packaging. A report by the Grocery Manufacturers Association in Washington, D.C., suggests a group of major food companies eliminated more than 1.5 billion pounds of packaging between 2005 and 2010 and plan to cut another 2.5 billion pounds by 2014.

Several new package design changes at Campbell Soup are the result of the company encouraging its 18,000 employees worldwide to look for ways to reduce energy and waste throughout its operations, says Dave Stangis, vice president of corporate social responsibility at the Camden, N.J.-based food company. Suppliers also share ideas, he says. "It's almost as if you have 100 different ideas simmering," Stangis says. "Some are easier to implement."

By redesigning the shape of a Pace jar slightly, for example, Campbell was able to eliminate an extra piece of corrugate in the shipping cartons to prevent the jars from rattling around. That one small change cut out about 400,000 pounds of packaging and resulted in approximately $400,000 in annual savings, the company says. By making the jar more squat, the company took out 27 truckloads of glass and was able to fit more jars per pallet, cutting down on shipping costs.

Similarly, a slight change in the height of the Goldfish cracker carton and a switch from virgin fiberboard to recycled stock saved $500,000 and lots of trees, Stangis says. Now the cartons are made from 100 percent post-recycled material.

By buying local, "I'm using less fossil fuels to get [products] from the origin to the store."

—Tim Metcalfe,

co-owner with brother Kevin (left), Metcalfe's Market

Small changes can add up to big savings, Stangis notes. Campbell realized a savings of $3.5 million in fiscal year 2009 when it made the lid on its condensed soup cans a little bit thinner. And by reusing water in a spice plant in Milwaukee, Campbell cut its water usage by 60 percent, or 90 million gallons, resulting in a savings of $130,000 in annual energy costs, he says.

Going local

Consumers, on the other hand, have shown they're willing to pay more for certain sustainable products. In Madison, Wis., some customers seek out Metcalfe's Market because they know they'll find local items, which have been the company's bread and butter since its founding in 1917. To stand out from the crowd, Metcalfe's launched a Food Miles program about five years ago, which involves announcing in shelf signage how many miles away a particular item was grown or produced.

"We had done a lot of buying local, but we had never really taken credit for it," Metcalfe says.

Now customers know to look for the signage. The benefits of buying local extend beyond helping the local economy, Metcalfe notes. "I'm also buying fresher food. I'm using less fossil fuels to get it from the origin to the store," he says.

Freelance journalist Ann Meyer is editor of and chief executive of L3C Chicago, L3C. Meyer formerly was a freelance small business columnist for Chicago Tribune and has written for a variety of business publications, including BusinessWeekSmallBiz, Crain's Chicago Business, Specialty Coffee Retailer, Multichannel Merchant and Prepared Foods.