Sobey’s Strategic

Approach to Sustainable

Seafood SupplyPrepared by: Neha Randhawa

External Issues

Brundtland Commission gave rise to sustainable development movement

Certain major competitors announced they would sell only ‘certified sustainable’ seafood

Ongoing pressure in the marketplace to be competitive in the sustainability agenda through measuring the ‘triple bottom line’ – social, environmental and financial performance

Industry veterans suggest the primary incentive for retailers is supply risk management – to protect the future availability of healthy fish stocks instead of current retailing profitability

Mainstream consumers not actively seeking sustainable seafood nor willing to pay a premium price for it

Environmental scanning and seeking industry collaboration (partners, suppliers, peers, NGOs, non-profits) to address sustainability issue

See Appendix 1 for PEST analysis

Internal Issues

Sobey’s faces a hefty challenge – sustainable retailing cannot interfere with operating or financial goals and must be consistent with overall corporate strategy

How to develop a sustainability strategy when mainstream customers have latent demand – not actively seeking ‘green label’ seafood nor willing to pay a premium to retailers for the product offering

To start, Sobey’s purchasers had no idea where their seafood was sourced from

Top management support and sustainability strategy alignment (purpose and policy)

Leadership capabilities of Sobey’s management team and its supply chain (supply chain integration – from fisheries through to the retailer)

Overall Issues Sobey’s Faces

How to be competitive on sustainability front with other retailers (eg.

Overwaitea, Loblaws, Safeway, Metro and Walmart)

How to protect their financial profits while driving forward the seafood

sustainability policy

How to educate customers on safe seafood practices and what Sobey’s is

doing to address this – to drive consumer demand for sustainable seafood

Ensuring seafood supply continuity – transparency, traceability, supplier

relationships – will there be enough supply for the future

Supplier collaboration to achieve long-term objectives

Alternatives Considered

Reactive supply chain sourcing

Supplier selection and supply chain sourcing

Proactive supply chain sourcing

Supplier development and supply chain management

Certification process & Customer engagement

Ecolabels - MSC ecolabels to recognize certified sustainable seafood

Traceability – barcode or RFID to provide transparency of where seafood is being

sourced from

Fishery improvement projects – collaboration with fisheries and NGOs to improve

fishery supply chain

Evaluation of AlternativesReactive supply chain sourcing

Pros

Maintain operating and financial

short-term goals

Customers may see this as still

working towards seafood

sustainability through ‘green only’

sourcing

In line with other major

competitors’ current practices

Addresses short-term goals

Cons

May lose close supplier

relationships

Lose influence on fishery

management practices – ‘red’

supply will move to less discerning

markets – lose opportunity to

change behaviour

Does not work in the spirit of long-

term goals to drive sustainable

seafood practices (‘greenwashing’)

Supplier selection and supply chain sourcing – work only with farms & suppliers

who provide ‘green’ eco-friendly seafood

Evaluation of AlternativesProactive supply chain sourcing

Pros Displays strategic sustainable

sourcing practices

Alignment to long-term goals of organization without affecting financial or operating goals now

Supply chain development with increased supplier cooperation

Investments into better fish farming practices to limit risk of future supply

Opportunity to deliver greater value to customers through packaging and education

Cons Some customers might not

understand ‘yellow’ and ‘red’

labels seafood

May perceive Sobey’s as not on the

forefront of sustainability agenda

Competitors only selling ‘green’

certified sustainable seafood –

competitive disadvantage

Supplier development and supply chain management – work with suppliers over

time to influence them to ‘green’ fishing practices while still accepting ‘yellow’

and ‘red’ seafood with labels

Evaluation of AlternativesCertification process & Customer engagement

Pros

Ecolabels are easily identifiable and

many customers aware of its

associated benefits

Barcode or RFID traceability –

provides customers with knowledge

of safe sourcing practices and drives

customer engagement

Fishery improvement projects

provide for supply chain integration

and forward looking sustainability

practices to protect future supply

Cons

Many competitors also using

ecolabels – not a point of

differentiation

Barcodes or RFID’s require financial

investment and supply chain

integration

Fishery projects are time

consuming, complex and require

in-house expertise

Recommendation Go beyond certification to ‘fix the worst first’

Implement proactive supply chain sourcing practices

Certification and customer engagement

Rationale:

Alignment to Sobey’s overall corporate strategy

Does not interfere with short-term financial or operating goals

In the spirit of making a difference to the seafood sustainability agenda –Sobey’s able to influence suppliers to utilize better fish farming practices over the long-term

Will reduce risk of future seafood supply

Continue to provide breadth of seafood products to customers, while educating them and allowing them to make informed decisions easier

Next Steps

Go beyond certification to ‘fix the worst first’

Fishing continuum of ‘red’, ‘yellow’ and ‘green’ labels by SeaChoice

Review current seafood products offering and continue to list ‘red’ zone seafood as long as supplier has improvement plans in place

If supplier does not have improvement plans, de-list them

Implement proactive supply chain sourcing practices

Work with suppliers to drive better fish farming practices (develop trust, long term viability with key milestones and measurements) through shared goals

Coordination with NGOs and non-profits to educate all stakeholders (customers, suppliers, buyers, retailers) on importance of sustainable seafood practices

Drive transparency through supply chain

Leverage local supply where available to minimize carbon footprint

Train and educate staff on sustainable practices

Next Steps… continued

Certification and customer engagement

Implement ecolabels, barcodes or RFIDs for traceability, and fishery improvement

projects

Make it easier for the customer to make informed buying decisions

Measure progress through sustainability scorecard

Appendices

Appendix 1 – PEST Analysis

Political

Brundtland Commission giving rise to sustainable development

United Nations, NGOs, and non-profits placing pressure on industry to develop sustainability agendas

Environmental

Future seafood supply in danger due to overfishing and illegal fishing practices

Major retail competitors announced sustainability targets to sell ‘certified sustainable’ only

Social

Consumers in a state of confusion –desire to help drive sustainability but don’t know how

Latent consumer demand – not actively seeking ‘certified only’ seafood and not willing to pay premium

Technological

Complex seafood supply chain requiring re-tooling to be competitive via integration

Current fishing practices ‘enmasse’ – not sustainable approach