Organic Growth: Being Green to Build Customer Loyalty


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  • Organic Growth: Being Green to Build Customer Loyalty

    1. 1. Organic Growth: Being Green to Build Customer Loyalty 18 May 2008 National Restaurant Association
    2. 2. More Frequent, More Personal, More Food <ul><li>People connect to sustainability personally and initially through their food choices. </li></ul><ul><li>Food is the new “newspapers and aerosol deodorant.” </li></ul><ul><li>The responsibility to make the right choice increasingly falls to Food Service Professionals </li></ul>
    3. 3. Special Focus on Food Choices <ul><li>Media attention </li></ul><ul><li>Activism from PTA to Celebrity Chef’s </li></ul><ul><li>Connection between “Health, Fresh, Natural, Local and Sustainable.” </li></ul><ul><li>Food Safety incidents now at historic levels…and certain to climb. </li></ul><ul><li>Connecting the dots of food inflation, biofuels and climate change. </li></ul><ul><li>A “dash” of anti-China sentiment. </li></ul>
    4. 4. Consumer Insights <ul><li>Environmental Concerns drive consumers to buy “Green Products.” </li></ul><ul><li>...Except for Food </li></ul><ul><li>Health Concerns drive consumers to buy Natural and Organic Foods. </li></ul><ul><li>Mintel Green Living March 2008 </li></ul>
    5. 5. So What is “Green”? Truly Fusion Cuisine! And who will come up with the next Thai Pizzaritto? Healthy Local Animal Welfare Fair Trade Good for the Planet Organic Fresh Natural Biodegradable
    6. 6. The Premium Conundrum <ul><li>About half of consumers are willing to pay a 10% premium for “green products” (Mintel) </li></ul><ul><li>And maybe less than 25% (Brandweek) </li></ul><ul><li>The rest will buy them when they are available at mainstream places at prices </li></ul><ul><li>Only the most committed consumers seek out “green products” at specialty retailers. </li></ul><ul><li>Premium shoppers are most skeptical of “green” claims. </li></ul><ul><li>For the 50-75%, it’s a difference maker. </li></ul>
    7. 7. The Big Opportunity in the Middle The Retail Response
    8. 8. Boom to X <ul><li>Younger consumers are less likely to buy “green” premium products than Baby Boomers and Seniors. </li></ul><ul><li>They are more likely to expect their food to reflect their values. </li></ul><ul><li>Good cooking and good practices are a “ticket to play.” </li></ul>
    9. 9. How to Reach the Consumer? <ul><li>Certification </li></ul><ul><li>Or </li></ul><ul><li>Marketing? </li></ul>
    10. 10. What’s in a Certification <ul><li>Third party verification of means of production </li></ul><ul><li>Sets standard for all businesses </li></ul><ul><li>Which one to choose? </li></ul><ul><li>How many are there? </li></ul>
    11. 11. What’s in a Certification? <ul><li>Does it reflect the values you are trying to communicate? </li></ul><ul><li>Is there sufficient supply and selection? </li></ul><ul><li>Who else is associated with the certification? </li></ul><ul><li>Is the certification recognized by your customers? </li></ul><ul><li>Or does the certifying agency have a compelling plan to do so? </li></ul>
    12. 12. Can Marketing Work? <ul><li>Can you tell a more compelling and verifiable story yourself? </li></ul><ul><li>Is the message a part of your existing brand identity? Or closely associated with it? </li></ul>
    13. 13. There are good cars and bad cars for the environment… But is there really good food and bad food?
    14. 14. How much energy is used? <ul><li>What percentage of overall US energy needs go to producing food? </li></ul><ul><ul><li>1-3% </li></ul></ul><ul><ul><li>3-5% </li></ul></ul><ul><ul><li>5-7% </li></ul></ul><ul><ul><li>10% or more </li></ul></ul>
    15. 15. How much energy is used? <ul><li>The food sector now consumes 10.4% of all energy used in the United States.* </li></ul><ul><li>Globally, the food sector consumes between 10 and 15% of all energy used in industrialized countries.** </li></ul><ul><li>In the United States, 2-5% of US energy consumption, is used on the farm alone.*** </li></ul>
    16. 16. Energy needs for food <ul><li>The cheeseburger </li></ul><ul><li>… from farm to plate </li></ul>Carlsson-Kanyama, Annika and Mireille, Faist, Energy Use in the Food Sector: A data survey
    17. 17. Close up: the hamburger <ul><li>Hamburger Ingredients* </li></ul><ul><li>Bread .16 lb </li></ul><ul><li>Hamburger .19 lb </li></ul><ul><li>Dressing .04 lb </li></ul><ul><li>Lettuce .06 lb </li></ul><ul><li>Onions .0037 lb </li></ul><ul><li>(freeze dried) </li></ul><ul><li>Cucumber .016 lb </li></ul><ul><li>(pickled) </li></ul><ul><li>Cheese .032 lb </li></ul>
    18. 18. Bread supply chain Cultivated Wheat Milled Grain Flour Baked Bread To Storage To Restaurant Burger
    19. 19. Bread supply chain: energy needs
    20. 20. Bread supply chain: energy needs <ul><li>The energy inputs accumulate from field to table. </li></ul><ul><li>The calories of food energy decline. </li></ul><ul><li>Energy needed for food production often exceeds the energy contained in the food product. </li></ul>Cumulative Energy Inputs
    21. 21. Meat patty supply chain Crop Production Drying Fodder Production Feed Consumed Slaughter House Cutting To Storage To Restaurant Burger To Grill
    22. 22. Meat patty supply chain: energy needs Cumulative Energy Inputs
    23. 23. Hamburger energy profile <ul><li>The total energy inputs to produce a hamburger are between 1,743 and 4,454 calories of energy inputs required to produce a hamburger.* </li></ul><ul><li>Each hamburger contains 310 calories of food energy.** </li></ul><ul><li>In addition to the kitchen, our supply chain also is a major contributor. </li></ul>Total Energy Inputs for a Hamburger Bun Burger Cheese Pickle & Onion Lettuce
    24. 24. Intrinsic or Extrinsic Cultivated Wheat Milled Grain Flour Baked Bread To Storage To Restaurant
    25. 25. Extrinsic or Intrinsic
    26. 26. Local and Global! <ul><li>Food has been traded for 2K, 5K or 10K, as you choose to believe </li></ul><ul><li>Can we still both eat locally and act globally? </li></ul>
    27. 27. The Way Forward <ul><li>Get this right and you have customers for life! </li></ul><ul><li>Service Customers great food that reflects a customer’s values and contributes to a healthy life and they’ll keep coming back. </li></ul>
    28. 28. Exceeding Expectations At Every Level <ul><li>Our company’s reputation </li></ul><ul><li>Total transparency about what we do </li></ul><ul><li>Community connections </li></ul><ul><li>A great dining environment </li></ul><ul><li>Great food </li></ul><ul><li>Great service </li></ul>
    29. 29. Literacy on Sustainability
    30. 30. Inside Park at Café St. Barts <ul><li>Venerable New York institution on Park Avenue. </li></ul><ul><li>A completely new restaurant designed by New York-based Conant Architects with a new state-of-the-art kitchen designed by Pascoe-Jacobs Associates. </li></ul><ul><ul><li>‘ Wood’ used is sustainable bamboo </li></ul></ul><ul><ul><li>Non formaldehyde wood products </li></ul></ul><ul><ul><li>Low VOC (Volatile Organic Compound) paints and products </li></ul></ul><ul><ul><li>Non toxic floor finishes </li></ul></ul><ul><li>Executive Chef Matthew Weingarten is creating menus focusing on local, seasonal and responsibly sourced ingredients. </li></ul>
    31. 31. National Geographic Employee focused Visually stunning Globally Sustainable Matching culinary approach Reflect Sodexo and Nat’l Geo Values
    32. 32. The University of Vermont Dudley H. Davis Student Center <ul><li>“The sustainability concept for building is really a part of the University’s vision” Annie Stevens, Assistant VP for Student and campus life. </li></ul><ul><li>The center was constructed with great attention to Green Building Design and sustainability concepts. </li></ul>
    33. 33. The Sustainability Concept for the Student Center <ul><li>Natural light. </li></ul><ul><li>Green roof and terrace collects rain and storm water. </li></ul><ul><li>A tunnel built from trees harvested on UVM land is attached to the building. </li></ul><ul><li>Water, heat and electricity use tracked on computer monitors in a public Sustainability Gallery. </li></ul><ul><li>Serves organic and sustainable food including soups and salads – developed by UVM’s Sodexo team. </li></ul>
    34. 34. Northwestern University <ul><li>Northwestern University named the nation’s most vegetarian-friendly university by Peta2 </li></ul><ul><li>One of 30 colleges nominated by our students nominees </li></ul><ul><li>20% of the 6,600 recipes Sodexo serves in the dining halls are vegetarian friendly </li></ul>
    35. 35. Sodexo and Illinois Farmers <ul><li>Sodexo purchased over $4.75 million in fresh produce from Illinois farmers. </li></ul><ul><li>In season, this is about half of all produce purchases. </li></ul>
    36. 36. Food = Sustainability <ul><li>1.3 billion people work in the food sector, the world’s largest employment group. </li></ul><ul><li>One quarter of all arable land is dedicated to food production. </li></ul><ul><li>One crop – coffee – is the second most valuable commodity in world trade after oil. </li></ul><ul><li>Food production accounts for 34% of water use in the U.S. and about 40% globally. </li></ul><ul><li>Food production accounts for more than 10% of energy use in the U.S. and 10-15% globally. </li></ul>
    37. 37. Sustainability = Food <ul><li>Efforts to promote sustainability are linked to our ability to feed ourselves. </li></ul><ul><li>Climate Change is forecast to be the leading cause of hunger in the coming decades </li></ul><ul><li>Uncertainty in agricultural production means uncertainty in food price, supply and safety. </li></ul>
    38. 38. Sodexo’s Corporate Citizenship Priorities <ul><li>Sustainability </li></ul><ul><li>Health and Wellness </li></ul><ul><li>Business Ethics </li></ul><ul><li>Fighting Malnutrition Worldwide </li></ul><ul><li>Diversity & Respect for Our People </li></ul>
    39. 39. Our Work Ahead: Our Common roles in the Global context