Sustainability Strategies within the Global Food Industry
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1 Sustainability Strategies within the Global Food Industry Prepared by: Jonathan Thomas, Principal Market Analyst, Leatherhead Food Research Innovation Nutrition Regulatory Safety Sensory
2 Agenda Areas of discussion will include the following: Why Sustainability Matters Sustainable Packaging Carbon Footprint & Energy Reduction Water Stewardship/Reduction Sustainable Sourcing Conclusions
3 Why Sustainability Matters 1. It s our future 2. Good news story to engage customers 3. Satisfying stakeholders & investors 4. Encourages innovation 5. Engages and motivates employees 6. Can save money in the long-run (efficiencies) 7. Opportunity to be leader 8. If you re a manufacturer, retailers will increasingly rate you on it
4 Sustainable Packaging
5 Global Sustainable Packaging Market Value (USDbn) Source: Pike Research
6 Sustainable Packaging According to a 2012 study from DuPont and Packaging World: sustainability is set to overtake cost as the primary concern for the global packaging industry during the course of the next decade. The share of the total global packaging market taken by sustainable varieties in value terms is set to rise from 21% in 2009 to almost a third (32%) by 2014.
7 Sustainable Packaging in Action Kraft Foods has introduced refill bags in the UK for Kenco coffee. These use 97% less packaging material than standard glass jars. Kraft Foodservice in late 2012, introduced a new Yes Pack (a flexible film bag) in North America for salad dressings such as Ranch and Catalina. This replaces HDPE jugs, and uses up to 60% less plastic.
8 Sustainable Packaging in Action The Coca-Cola Company (TCCC) launched the PlantBottle in 2009, a new form of plastic bottle made from 30% plant-based material. It is used for brands such as Coca-Cola, Diet Coke and Coke Zero, and is now found in 24 countries worldwide. Since its launch, over 10 billion units have been sold. HJ Heinz has adopted the PlantBottle concept for its 20-oz bottles of ketchup, in the US (2011), followed by Canada (2012).
9 Carbon Footprint & Energy Efficiency
10 Carbon Reduction in Action PepsiCo/Walker s Has been working with the Carbon Trust since 2003 In 2007, Walker s became the first consumer food brand to obtain a carbon reduction label The carbon footprint for a standard bag of Cheese & Onion crisps is 80g of carbon dioxide 36% of this comes from raw materials (e.g. potatoes, sunflowers), with packaging accounting for a further 34%. The carbon footprint has been reduced by 7% since it was first identified, via initiatives such as reductions in packaging weight, use of British potatoes to reduce food miles and greater waste recycling
11 Carbon Reduction Food Retailing Tesco Has worked with the Carbon Trust since 2008 Carbon labels now appear on more than 1,000 of its products, including orange juice and milk Opened the UK s first zero-carbon store in Cambridgeshire in 2009 Additional zero-carbon stores have since opened in Powys and Lincolnshire, and the concept has also moved overseas to the Czech Republic and Thailand Aims to become a zero-carbon business by 2050
12 Energy Efficiency Energy reduction targets in place HJ Heinz set itself the target of reducing global energy consumption by 20% by 2015 between 2005 and 2011, a reduction of 15.1% was achieved Greater use being made of renewable energy sources PepsiCo has installed wind turbines at a beverages plant in India, thereby eliminating 3,000 tonnes of GHG emissions Solar energy is being used at snack food manufacturing plants in California and Turkey More use is being made of alternative fuels Examples include biogas and spent coffee grounds
13 Water Stewardship/Reduction
14 CEO Water Mandate A public-private initiative set up by the UN in 2007 to foster sustainable water policies and practices In 2012, it launched a global Water Action Hub (the world s first online platform to unite companies, government, NGOs, etc) during World Water Week As of end 2012, there were 80+ signatories, including many leading food & drink multinationals
15 Water Stewardship in Action SABMiller Its water to beer ratio has consistently fallen since 2008 Total water consumption used to produce beer fell from 793m hl in 2008 to 731m hl in 2011 and 706m hl in 2012 In 2008, it set a target of reducing water consumption per hl by 25% by 2015 A recent initiative by MillerCoors in Idaho has saved almost 4.7m hl of water (9% of annual use) Water to Beer Ratio (hl),
16 Sustainable Sourcing
17 Sustainable Agriculture Initiative An organisation created by the global food industry to support the development of internationally-accepted standards for sustainable agriculture Sustainable agriculture has social, environmental and economic dimensions (People/Planet/Profit) Co-ordinates working groups in areas such as coffee, dairy, fruit, beef and arable/vegetable crops Founded in 2002 by Nestle, Unilever and Danone Now has 40 members (30 food companies, plus 10 affiliates)
18 Sustainable Palm Oil Palm oil is the most widely-used vegetable oil worldwide, used in the manufacture of products such as margarine and cocoa butter Increasing focus on the environmental impact of palm oil production deforestation, threat to biodiversity and the subsequent threat to various animal species The Roundtable on Sustainable Palm Oil (RSPO) was established in 2004 to promote and develop sustainable palm oil Original founders include Unilever and Sainsbury RSPO certified palm oil plantations now cover an area 22 times larger than Singapore As of 2012, 14% of global palm oil supply carries RSPO certification
19 Sustainable Fish/Seafood As of 2012, 288 fisheries worldwide are engaged in the Marine Stewardship Council (MSC) programme Certified fisheries have an annual catch of more than 7 million tonnes of seafood, or 8% of the total wild capture harvest Worldwide, over 17,000 seafood products bear the MSC ecolabel Retail sales amounted to over USD3.2bn in 2011/2012 McDonalds has recently introduced MSC-accredited Filet-O-Fish in over 7,000 restaurants spread across 40 European countries All of Tesco s wet fish counters have carried the MSC mark since 2005, while Sainsbury sells over 130 products bearing the MSC logo As of 2011, 73% of wild fish and farmed seafood sold via Wal-Mart/ Sam s Club carries a sustainability certification
20 Fairtrade World market for Fairtrade food and drinks grew from USD3.1bn to USD6.65bn between 2007 and 2011 Sales are heavily skewed towards Western Europe (e.g. UK, Germany) and US Major product sectors include bananas, coffee and cocoa/ chocolate Fairtrade goods are supplied by almost 1,000 producer organisations 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Global Fairtrade Food Market (USDm), ,100 4,480 6,
21 Conclusions
22 Conclusions Clear business case & relevant Driven from the top / imbedded in company philosophy Behind the scenes work in place tighter control / monitoring will come Feed across entire supply chain (suppliers) Engage customers through continuous dialogue & in a language they understand A holistic approach is being taken Companies are being independently audited and ranked according to their sustainability efforts (e.g. Dow Jones Index)
23 Thank you Contact: Jonathan Thomas, Principal Market Analyst Innovation Nutrition Regulatory Safety Sensory
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