[Article and photo originally published on Retail IT Insights 11.25.2020]
Today’s consumers demand to know the “farm to fork” journey of their food choices. They expect safe and affordable foods that are marketed with transparent claims about environmental impacts and sustainability. The pandemic accelerated the consumer demand for sustainably sourced food and beverage products because they’re focused on personal wellness and the need for better regenerative food production practices.
A survey from global independent consulting firm Kearney found nearly 50 percent of consumers reported more concern about the environment due to the pandemic. They’re also cooking from home more and paying closer attention to the products they purchase. The Kearney survey noted 78 percent of respondents thought food companies could do more to explain the environmental impacts of their products.
This sustainability and transparency concern furthers drives the need for retailers to respond with an array of food and beverage products that are sustainability sourced from their raw ingredients, to transport, to packaging. Since consumer preferences guide the entire supply chain, food and beverage producers and retailers must work together to ensure every supplier follows and can prove sustainable practices.
Consumers Speak With Their Wallets
The Millennial generation is not as young as it used to be. A simple-sounding statement, but one that food and beverage retail managers should take to heart. This group by 2025 will represent 75 percent of the U.S. workforce. Their purchasing power and demand for sustainability and good corporate practices mean food and beverage companies and the retailers that sell their products must take notice.
This generation is willing to switch their brand allegiance to more sustainable products and will buy them at a premium if necessary. They lean toward products that embrace sustainability as a core practice, from the packaging materials to the farm supplier’s environmental stewardships. And the generations younger than Millennials also demand sustainability. According to a survey from Impossible Foods, 62 percent of Generation Z members were willing to spend more money on sustainable food options.
Organic food product sales reached over $55 billion in 2019, a massive market figure underscoring consumers’ desire to spend for products they believe are safer for them and the environment. Along with this growth is more awareness among consumers about what “sustainability” means when it comes to their food. They’re looking deeper at the supply chain and brand’s claims, moving beyond just “organic” to focus on holistic sustainability. Retailers need to stay ahead of this trend by not only procuring and offering sustainable products but providing proof to back up sustainability claims.
Challenges At The Source
Consider a family-owned dairy farm in Nebraska that produces dairy for a leading cheese company. The cheesemaker might have a “sustainability pledge” in place that mandates its suppliers follow best practices. This might include water usage and recycling, soil health, and overall carbon reduction in terms of improved transportation or processing operations. But how does the farm ensure its practices fit within this pledge, and how do they communicate their commitment? How can they show their farm is a worthy partner with a sustainability ethos that can make its way from the fields to the retail shelves and ultimately the consumer’s hand?
For the food and beverage retail company creating a sustainability-focused brand, there’s a challenge in proving the products they are sourcing back to the farm are indeed sustainably produced. The farms providing the lettuce, beef, or milk for cheese often lack verifiable data about their sustainability practices. They might know they’re using less water and improving their farm’s biodiversity, but they don’t have the metrics on hand to “tell their story.” So instead they’re often stuck with generalities and vague promises, as opposed to data that can stand up to scrutiny by their partners, retailers, and the end customers.
Using Verified Metrics To Prove The Sustainability Case
With consumers demanding transparency and sustainability throughout a product’s life cycle, food and beverage suppliers and retailers desperately need more information. They require data from their farming partners to answer key questions including:
- Do our farmers employ regenerative farming practices?
- Have we used a third-party to evaluate various environmental metrics?
- Do our suppliers track carbon emissions and efforts to sequester or reduce emissions?
- Are our goals for water, energy, biodiversity, and animal welfare verified and transparently available?
- Do we have data on the sustainability practices our consumers care about the most?
- Do our suppliers have a continuous improvement plan?
An impactful way to quantify and prove sustainability at the farm level and answer these key questions is through a third-party verification platform like EcoPractices®. This platform, available through Sustainable Environmental Consultants, gives farms and their brand partners verified metrics.
These data points not only provide concrete evidence for sustainability claims, but they also give food and beverage retailers and marketers impactful messages. For example, perhaps the dairy farm supplier is recapturing and reusing 115 million gallons of water a year or removing the equivalent of 600 cars off the road due to carbon offsetting actions. Whatever the specifics, the data points allow food and beverage retailers to back up their product’s sustainability claims with hard evidence, which can reassure customers and improve their brand/retailer loyalty.
The pandemic accelerated the transition to a customer-centric economy. These customers demand sustainable actions from their chosen companies. With food products, this means transparency about what’s contained in the food they eat and the broader impacts of that food’s production.
Food and beverage retailers and their supplier partners that want to thrive in this customer-focused dynamic can use third-party sustainability verification to validate practices and environmental impacts. Increased usage of this data provides financial opportunities for those retailers. They can, for example, support farms and other providers that boast the most impressive sustainability gains, which creates a further cyclical focus on sustainability for the entire supply chain.
With better data, food and beverage retailers also can market high-value items like produce, seafood, and dairy with concrete and impactful sustainability stories on their signage, social media, and marketing campaigns. The retailers reduce their reputation risk by providing verified environmental metrics to support their sustainability benefits, to be authentic, and build long-lasting competitive advantages to help them stand out.
About The Author
John Harsch is President and COO of Sustainable Environmental Consultants, a leader in providing a full range of environmental services needed by food companies, their agriculture supply systems, and investment management corporations. John has been instrumental in SEC’s growth since starting the company in 2008. He brings to the business more than 25 years of experience in environmental practices, natural resources, and conservation.
About Sustainable Environmental Consultants
Established in 2008, Sustainable Environmental Consultants is part of the Wright Service Corp. employee-owned family of companies. Since our inception, we have endeavored to be a leader in providing innovative solutions to better the planet through our three divisions of sustainability risk management, agricultural compliance and engineering, and erosion control. We provide a full range of environmental services needed by food companies and their agriculture supply systems. To learn more, follow on LinkedIn.