Sustainable Sourcing for Category Managers: Using the FMI Guide

Five Winds International &

Ecos US

October 29, 2010

Webinar Logistics

• Welcome!• All attendees are muted• Interactive polls• Q&A – write your questions in chat box and we will

answer them at the end

• United Soybean Board

• FMI Sustainability Executive Committee and Council– Specifically those that helped to launch the development of the

guide: Suzanne Forbes (Wakefern), Harriet Hentges (Ahold USA), Tom McIntyre (Supervalu), Karen Meleta (Wakefern), Tracy Taylor (Ahold USA) and Jeanne von Zastrow (FMI)

• All those who participated in our Guide survey and submitted additional comments

Produced “by the industry for the industry”

Thank you to:

Acknowledgements

Background on Guide & Presentation

• This presentation accompanies the document:

Sustainability on the Shelves

A Sourcing Guide for Category Managers and Buyers

• Please customize the Guide and these slides for your own use

Agenda

• Learning Objectives• What is Sustainability?• Sustainable Sourcing• Decision Framework for Grocery• Take-Home Messages• Questions

Learning Objectives

1. Provide good working understanding of sustainability in the food retail sector

2. Identify key sustainability issues specific to each product category

3. Possess questions and tools to help understand and verify sustainability claims, recognize “greenwashing”, and select more sustainable products

What is Sustainability?

Sustainability

“Business practices and strategies that promote the long term well-being of the environment, society, and the bottom line” - FMI

Sustainability in Your Company

Poll: Who is in charge of sustainability in your company?

8

What is Sustainable Sourcing?

9

SUSTAINABLE ATTRIBUTES

Quality

Availability Price Service

Sustainable Sourcing

I take my decision-making elements of price, service, quality and availability and

simply add our sustainable seafood priorities as a fifth. Not all elements carry equal weight at all times but they are my top priorities when choosing what to buy.

- Tracy Taylor, Ahold USA

Is Sustainability a Strategic Business Issue?

300% Growth of U.S. sales of “ethical” cleaning products in 2009. Packaged

Research

35% Percent of U.S. consumers that said they would pay more for

environmentally-friendly products. Mintel Oxygen Reports, Mar 2010

$73M Additional profit generated by Marks and Spencer’s Plan A

sustainability strategy in 2009. M&S 2010 Progress Report

10

What is a Sustainable Product?

11

eco-labelled

less packaging

fair trade

less toxics

use less resources durable

organic

recycled content

packaging

BPA-free

How do these terms relate to sustainability?

recyclablelocal

Stepwise approach to buying more sustainable products

Step 1: Know Your Priorities

What are your company’s priorities?

Sustainable sourcing strategyCompany sustainability priorities

Product priorities

• Poll: What sustainability issues are your customers asking about? (select all that apply)

Step 1: What are your customers’ priorities?

What are the Sustainability Issues for Grocery?

Carbon Footprint

Sources: US EPA Greenhouse Gas Equivalencies Calculator and http://www.walkerscarbonfootprint.co.uk/walkers_carbon_footprint.html and http://openthefuture.com/cheeseburger_CF.html

See Guide, page 22

A carbon footprint includes all greenhouse gases emitted by a product’s production, transportation, consumption, and end of life.

Final carbon footprint calculation for a standard bag of Walkers Crisps is 80g CO2 which compares to 243g CO2 for an average cheeseburger

Water Footprint

53 gallons!

Source: http://www.huffingtonpost.com/2009/02/13/1-latte-53-gallons-of-wat_n_166759.html

See Guide, page 22

Waste Footprint

Every year, the US generates around 14 million tons of food waste, equivalent to 106 pounds of food waste per person

Source: http://www.epa.gov/reg3wcmd/solidwasterecyclingfacts.htm

See Guide, page 23

Packaging

Source: http://www.cleanair.org/Waste/wasteFacts.html

Almost 1/3 of the waste generated in the U.S. is packaging

See Guide, page 24

Organic, Local, and Bioengineering

Consumer demand? Sustainability science?

Source: http://pubs.acs.org/doi/abs/10.1021/es702969f

See Guide, page 25

Sourcing is the Hot Spot for Grocery

Sourcing is the Hot Spot for Grocery

Agriculture uses 50% of the Earth's habitable land

70% increase in food production needed

Agriculture69%

Industry23%

Municipal8%

Water Use by Sector, Globally

Step 2: Communicate Needs to Suppliers

I am interested in sourcing products that address:

• The sustainability attributes of my product category

• My company’s sustainability priorities

Step 3: Acquire Information

Poll: How do you typically get information about sustainability from your suppliers?

Step 3: Acquire Information

• You’ve started the conversation, now begin to acquire information on company and product sustainability

• See page 21 of Guide for General Questions to ask your suppliers

http://www.greenbiz.com/news/2010/03/11/how-to-embed-sustainability-into-company-dna#ixzz10qIvI7SA

It is no longer enough for companies to have special projects or initiatives.

Comprehensive sustainability strategies are expected. 

Mindy S. Lubber, Ceres President

Step 4: Evaluate Information

• If you have information gaps, circle back to “Acquire information”

• Do you have a process to manage information?

• Possible starting points:– Review and compare to information in

Guide & “For More Information” links– Compare information with your

company priorities identified in Step 1– Talk to your sustainability team– Talk to other category managers

Types of information you may receive:

Evaluate Information

SOURCES: World Resources Institute, Big Room Inc. | Bonnie Berkiwitz and Laura Stanton/The Washington Post - May 3, 2010

Learn more about the eco-labels for your category

Eco-Labels: One tool in your toolkit

Greenwashing

• Poll: If you think you’ve seen greenwashing, what about it made you question the claim?

a) No data/proof provided

b) Vague or undefined terms used

c) Claim seemed too good to be true

d) Hidden trade-offs may exist

e) Other

(Used with Permission)

1. Sin of the Hidden Trade-Off

2. Sin of No Proof

3. Sin of Vagueness

4. Sin of Irrelevance

5. Sin of Fibbing

6. Sin of the Lesser of Two Evils

7. Sin of Worshiping False Labels

For more information, see Guide pages 27-28

Ask for substantiation on vague terms like:

• Eco-friendly• Sustainable• Green• Environmentally-friendly

Step 5: Make Purchasing Decision

• Evaluate sustainability as only one aspect in your purchasing decision

Quality Availability Price Service Sustainability attributes

Take-Home Messages

1. Know the key sustainability issues for your category and how they fit with your company’s approach

2. Be on the lookout for greenwashing - when you see vague claims (e.g., “green”), dig deeper! (see Guide pages 27-28)

3. Just get started! Start small and build up, using the Guide as a reference tool along the way

Q&A

Thank you

for your attention and participation today!

Libby BernickFive Winds Internationall.bernick@fivewinds.com(610) 640-2302 x102

Kats MaroneyEcos USecosmaroney@verizon.com(610) 299-1949

Coming soon via Survey Monkey

Did this webinar:

1. Provide you with a good working understanding of sustainability in the food retail sector?

2. Identify key sustainability issues specific to your product category?

3. Possess questions and tools to help understand and verify sustainability claims, recognize “greenwashing”, and select more sustainable products?

Living Our Values

Five Winds is a Carbon Neutral Company

and follows a Sustainable Purchasing Policy