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