Food represents the most important item that we purchase and consumer on a regular basis. Therefore, our food decisions represent the most important way that consumers can have a direct effect on an entire food production system. This article defines sustainability and outlines it’s key features. One of the most important and interesting aspects of the modern food supply chain is how the major food retailers (particularly Walmart) have taken responsibility and devoted resources to ensuring the sustainability of their supply chain. This represents a social innovation because it involves collective action aimed at benefiting the larger society. It is also clear that the government oversight system is no longer seen as adequate to protect food safety and social responsibility.
I recently gave an invited talk in San Antonio, Texas to the Pickle Packers International’s annual meeting. My goal was to provide understanding and appreciation for how social and technological changes affect the supply chain for food. The presentation is attached as a PDF file. CLICK FOR Hoban – PPI Below are some highlights about how social changes affect the food supply chain. For example, consumers now control the food production process more than suppliers. After that you will find a series of articles about sustainability in general and Walmart’s sustainability initiatives in particular. The fact that corporations now must take responsibility for ensuring food safety and sustainability is a strong indictment against the government’s lack of willingness and ability to do this.
Social Changes Reshape Food Values and Behavior
- Aging of the baby-boomers
- Lack of time, trust and attention
- Evolving women’s roles
- Concerns for environment
- Ethnic and regional diversity
- Search for simplicity and comfort
- Hunger for social connection
Successful New Products Build on Social Meanings of Food
- Food is a source of identity and activism
- Back to nature and connection to land
- Sense of community and solidarity
- Way to “Think globally and act locally.”
- People want variety and diversity in food
- Rise in popularity of various ethnic foods
- Melting pot has become a salad bowl
- People seek social connections through food
- More pot-lucks and community festivals
- Community Supported Agriculture (CSA)
More Consumers Expect Simple Ingredients and “Clean Labels”
- Consumers’ lives are busier than ever.
- Innovations can help make life easier
- Simpler formulations (fewer ingredients)
- Easy to understand packaging (less clutter)
- Easy to prepare (ready-to-eat)
- Consumers want to avoid “chemicals”
- Eliminate artificial ingredients
- Avoid multi-syllable, Latin words
- Labels and packaging claim simplicity
Sustainable Innovation Must Involve the Whole Food Value Chain
- Food retailers and restaurants have gained considerable clout in the supply chain
- Food processors, farmers and input suppliers continue to lose power in the chain.
- If consumers demand or reject particular products, retailers listen
- Major food companies bought organic brands.
- Growing acceptance of private label brands by cost-conscious consumers
- Walmart Sees Consumer Demand and Internal Savings with Sustainability
Wal-Mart, the nation’s largest retailer, announced that it would cut some 20 million metric tons of greenhouse gas emissions from its supply chain by the end of 2015 — the equivalent of removing more than 3.8 million cars from the road for a year.
The company plans to achieve that goal by focusing on popular product categories with the highest embedded carbon — milk, bread, meat, clothing — and by pressing its suppliers to rethink how they source, manufacture, package and transport those goods. Essentially, suppliers are being asked to examine the carbon lifecycle of their products, from the raw materials used in manufacturing all the way through to the recycling phase.
Wal-Mart’s sustainability executives will work with suppliers to help them figure out what measures to take. Any costs related to making products more energy-efficient — redesigning packaging or using a different fertilizer — will be the responsibility of each supplier, not of Wal-Mart. …
At the beginning of the decade, Wal-Mart began taking an industry-leading role in environmental sustainability, in part to burnish its image. Soon, Wal-Mart was wielding its heft to change industry practices.
Wal-Mart said supplier participation in its effort to reduce greenhouse gas emissions would not be mandatory. But the giant retailer — with sales of more than $400 billion last year — made it clear that it was interested in doing business only with suppliers that share its goals. Critics argue, though, that rather than change its business model, Wal-Mart pressures suppliers to change theirs — which can lead them to cut corners and produce shoddier products. …
For the latest initiative, Wal-Mart is collaborating with organizations including the Environmental Defense Fund, PricewaterhouseCoopers, ClearCarbon, the Carbon Disclosure Project and the Applied Sustainability Center at the University of Arkansas. The groups will help advise Wal-Mart and its suppliers, as well as evaluate and measure reductions.
Already, Wal-Mart is working to change the labels on clothing it sells to indicate the products can be washed in cold water (therefore lowering customers’ electricity bills), and to sell private label compact fluorescent light bulbs in Mexico. The company said the 20 million metric tons of greenhouse gas emissions it intends to cut from its supply chain by the end of 2015 is 150 percent of the estimated growth in carbon emissions from its own operations over the next five years.
SOME FACTS ABOUT WALMART
- Walmart, with headquarters in Bentonville, Arkansas, is the major force in global retail. Net sales for their last fiscal year topped $405 billion, with international net sales exceeding $100 billion.
- Walmart is the world’s largest retailer. It is the largest corporation and private employer in the United States.
- Walmart is the biggest employer in 25 states. They set the standard for wages and labor practices.
- Walmart employs 1.4 million workers worldwide and over 1 million in the United States.
- Walmart has more than 3,000 stores in the U.S. and almost 1,300 International operations.
- Walmart topped the Fortune 500 list of America’s largest corporations ranked by sales for the fourth year in a row.
- Walmart is the top U.S. seller of products ranging from dog food to diamonds.
Whatever you think of Walmart, whether you shop there or not — they have a huge impact on global commerce and goods. And the company is very serious about energy efficiency and sustainability. The company’s motivations may not be out of pure altruism. But the firm seems to realize that long-term competitiveness, value, and costs are improved by doing the right thing from a carbon footprint standpoint. …
Walmart, along with Clear Carbon Consulting, is launching a cooperative effort with its suppliers to identify, measure and eliminate 20 million tons of greenhouse gas emissions from the life cycle of the products they sell around the world by 2015. Elizabeth Sturken of EDF said, “Walmart’s supply chain is where the action is.” 90% of Walmart’s carbon footprint is in the supply chain.
When the Environmental Defense Fund (EDF) first fought for a ban on the pesticide DDT more than 40 years ago, the non-profit organization went to court and fought hard. Back then, says Fred Krupp, the organization’s president, “the motto was ‘Sue the Bastards.’”
Times have changed. In its drive to combat climate change, EDF now assigns staff members to a place like Bentonville, Arkansas, corporate headquarters of WalMart, the world’s largest retailer. “I think we are the only national environmental group that has a staff stationed full-time in Bentonville,” says Krupp. “We walk in and out of the WalMart offices going to whatever meetings we want, really, to advise them on how to take their immense supply chain and get them to be greener.”
While the tactical makeover did not happen overnight, the environmental group still frequently has to defend this new business model for a non-governmental organization (NGO). “The whole idea is to change the world,” says Krupp. “If you want to change the world, it’s important to work with some of the big forces in the world.” …
WalMart’s current sustainability initiatives are having a major impact on the retailer’s suppliers, according to Krupp. Flat-screen televisions are still sold at WalMart, for example, but now they are energy efficient. “WalMart has something very precious that these vendors want, which is shelf space,” Krupp says. WalMart and EDF are being “inundated” with phone calls from suppliers who say that if the new standards determine “whether or not we get shelf space, we want to know what we can do to meet or exceed expectations.” …
EDF does not accept money from any of its corporate partners. “We thought it would be better for us, and better for the companies we work with, to keep our good name and reputation, and to be above reproach,” Krupp says. At McDonald’s, “we wouldn’t even accept a free hamburger in their restaurants.”
To accommodate the increased workload from the corporate engagements, EDF has grown from about 40 employees twenty-five years ago to more than 400 now. The current annual budget of about $120 million is funded through private contributions from foundations and more than 700,000 individuals; corporate donations total less than $500,000 annually, according to Krupp.
Asked which companies might be next on EDF’s target list, Krupp declined to be specific. “If you think about the biggest companies in the world, that have the most impact on climate,” he says, “those are the ones we want to work on…work with, and on.”
The concept of sustainability received worldwide recognition as a result of a report that was published in 1987 by the World Commission on Environment and Development (known as the Brundtland Commission) and entitled “Our Common Future”. The commission, chaired by Norway’s Prime Minister Gro Harlem Brundtland, developed today’s generally accepted definition of sustainability, stating that sustainable development is “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” Basically, therefore, it is a question of inter-generational equity. Sustainability demands that we pass on to our children a world that is virtually no worse than the one we inherited. Or, to put it differently: we should live off the ‘interest’ and leave the ‘capital’ untouched.
In 1992, the first United Nations Conference on Environment and Development (UNCED) was held in Rio de Janeiro. The conference focused on the question of the relationship between environmental and developmental goals. Both the Rio Declaration and Agenda 21 were adopted at this conference, which was attended by approximately 10,000 delegates. Agenda 21 is an action program for global sustainable development that made the concept of sustainability a formal political principle. It was now recognized that global environmental protection is only possible if economic and social aspects are also taken into consideration.
The EU formulated the three pillars of sustainability at its Copenhagen Summit and with the Treaty of Amsterdam of 1997. Known as the “three-pillar model of sustainability”, the principle states that sustainability not only comprises the natural heritage we pass on to the next generation but also the economic achievements and social institutions of our society, such as democratic political participation or peaceful conflict resolution. Sustainable development thus rests on an ecological, an economic and a social pillar. If one of the pillars gives way, the ‘sustainability building’ will collapse.
The World Summit on Sustainable Development was held in Johannesburg in 2002, ten years after the Rio Earth Summit. Its goal was to assess the progress made since Rio in terms of sustainable development. The findings were, however, disillusioning. In most countries of the world, the situation for the environment and population had even deteriorated.
A resolution was taken to adopt an agenda with five key areas: by 2015,
- the share of the population without access to basic sanitary facilities is to be halved,
- negative impacts on human health minimized,
- the decline in global fish stocks brought to a halt,
- the loss of biodiversity arrested.
- national sustainability strategies developed.
In many cases, one characteristic feature of sustainability strategies is the close involvement of social players such as associations, environmental organisations, societies and municipal authorities, the underlying idea being that sustainable development cannot be prescribed by law but that all players and agents must contribute to it. The concept of sustainability is accepted as a principle today. It is now a question of putting it into concrete practice. A large number of companies are setting a good example in this respect and an increasing number of firms have introduced environmental or sustainability management systems, publish sustainability reports or are members of the UN Global Compact for environmentally and socially responsible corporate management.
In March 2005, the Millennium Ecosystem Assessment (MA) was released. This 2,500-page report was four years in the making, drawn up by 1,300 researchers from 95 nations over four years, and funded by the Global Environment Facility, the United Nations Foundation, the World Bank and various others. Surveying the planet, it made a number of conclusions that many have stressed for years. The key messages from the report included the following points:
- Everyone in the world depends on nature and ecosystem services to provide the conditions for a decent, healthy, and secure life.
- Humans have made unprecedented changes to ecosystems in recent decades to meet growing demands for food, fresh water, fiber, and energy [which has] helped to improve the lives of billions, but at the same time they weakened nature’s ability to deliver other key services such as purification of air and water, protection from disasters, and the provision of medicines….
- Human activities have taken the planet to the edge of a massive wave of species extinctions, further threatening our own well-being.
- The loss of services derived from ecosystems is a significant barrier to the achievement of the Millennium Development Goals to reduce poverty, hunger, and disease.
- The pressures on ecosystems will increase globally in coming decades unless human attitudes and actions change.
- Measures to conserve natural resources are more likely to succeed if local communities are given ownership of them, share the benefits, and are involved in decisions.
- Even today’s technology and knowledge can reduce considerably the human impact on ecosystems. They are unlikely to be deployed fully, however, until ecosystem services cease to be perceived as free and limitless, and their full value is taken into account.
- Better protection of natural assets will require coordinated efforts across all sections of governments, businesses, and international institutions. The productivity of ecosystems depends on policy choices on investment, trade, subsidy, taxation, and regulation, among others.
More focus is needed on developing technologies that are “environment friendly.” Advances in such technologies would have a profound impact on all manner of society. Yet, achieving sustainable development seems primarily a political task not a technological one, though technology may be one of the many factors that could play an important part in moving towards more sustainable development. Without the political will to overcome special interests, it will prove difficult and those without voices to be heard, such as the poor that make up the majority of the planet, would be impacted the most.