This document provides a summary of a presentation on sustainable sourcing for beverage category managers. It discusses key sustainability issues for beverages like large water and carbon footprints in processing. It presents a decision framework including understanding priorities, communicating with suppliers, acquiring sustainability information, evaluating claims to avoid greenwashing, and integrating sustainability into purchasing decisions. The goal is to equip category managers with tools and questions to select more sustainable beverage products.

1. Sustainable Sourcing for BEVERAGE Category Managers: Using the FMI GuideFive Winds International &Ecos USConference Number(s): 1-877-782-5094 Participant Code: 200436 January 26, 2011

2. AcknowledgementsProduced “by the industry for the industry”Thank you to:United Soybean BoardFMI Sustainability Executive Committee and CouncilSpecifically 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

3. Background on Guide & PresentationThis presentation accompanies the document:Sustainability on the ShelvesA Guide for Category ManagersPlease customize the Guide and these slides for your own use

4. AgendaLearning ObjectivesWhat is Sustainability?Sustainable SourcingDecision Framework for BeverageTake-Home MessagesQuestions

5. Learning ObjectivesProvide good working understanding of sustainability in the food retail sectorIdentify key sustainability issues specific to each product categoryPossess questions and tools to help understand and verify sustainability claims, recognize “greenwashing”, and select more sustainable products

6. What is Sustainability?Sustainability“Business practices and strategies that promote the long term well-being of the environment, society, and the bottom line” - FMI

7. Sustainability in Your CompanyPoll: Who is in charge of sustainability in your company?Corporate Sustainability Director Senior Executive designated to manage sustainabilityc. Sustainability Teamd. Othere. No one7

8. What is Sustainable Sourcing?8I take my decision-making elements of price, service, quality and availability and simply add our sustainability 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 USAQuality

9. Availability

10. Price

11. ServiceSustainable SourcingSUSTAINABLE ATTRIBUTES

12. Sustainability is a Strategic Business Issue300% Growth of U.S. sales of “ethical” cleaning products in 2009. Packaged Research$73MAdditional profit generated by Marks and Spencer’s Plan A sustainability strategy in 2009. M&S 2010 Progress Report

13. Consumers are looking for “green”Source: 2009 GMA/Deloitte Green Shopper Study

14. Stepwise approach to buying more sustainable products

15. Step 1: Know Your PrioritiesWhat are your company’s priorities? Sustainable sourcing strategyCompany sustainability prioritiesProduct priorities

16. Poll: What sustainability issues are your customers asking about? (select all that apply)a) Packaging b) Sustainable seafood c) Organic d) Local e) Toxic/natural ingredients f) OtherStep 1: What are your customers’ priorities?

17. What is a Sustainable Product? 14

18. How do these terms relate to sustainability? recyclableless toxicsorganiclocaleco-labelledless packagingBPA-freerecycled content packagingfair tradedurableuse less resources

19. What are the Sustainability Issues for Beverage?

20. Carbon FootprintA 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 cheeseburgerSee Guide, page 22Sources: US EPA Greenhouse Gas Equivalencies Calculator and http://www.walkerscarbonfootprint.co.uk/walkers_carbon_footprint.html and http://openthefuture.com/cheeseburger_CF.html

21. Water Footprint53 gallons!See Guide, page 22Source: http://www.huffingtonpost.com/2009/02/13/1-latte-53-gallons-of-wat_n_166759.html

22. Waste FootprintEvery year, the US generates around 14 million tons of food waste, equivalent to 106 pounds of food waste per personSee Guide, page 23Source: http://www.epa.gov/reg3wcmd/solidwasterecyclingfacts.htm

23. PackagingAlmost 1/3 of the waste generated in the U.S. is packagingSee Guide, page 24Source: http://www.cleanair.org/Waste/wasteFacts.html

24. Organic, Local, and BioengineeringConsumer demand? Sustainability science?See Guide, page 25Source: http://pubs.acs.org/doi/abs/10.1021/es702969f

25. Processing, Recycling, and Disposal are Hot Spots for Beverage

26. Processing, Recycling, and Disposal are HotSpots for BeverageEnormous freshwater needs during processing…518 liters of freshwater are required to produce just 1 liter of Minute Maid orange juice35 liters of freshwater are needed to produce a half liter of Coca-ColaSource: http://www.nytimes.com/2010/11/29/business/energy-environment/29iht-RBOGFOOT.html

27. Processing, Recycling, and Disposal are HotSpots for BeverageLarge environmental impact during recycling and disposal…Recycling 1 plastic bottle can conserve enough energy to power a light bulb for 6 hours.Nearly8out of every 10 bottles will end up in a landfillSource: http://earth911.com/recycling/plastic/plastic-bottles/facts-about-plastic-bottles/

28. Step 2: Communicate Needs to SuppliersI am interested in sourcing products that address:The sustainability attributes of my product category

29. My company’s sustainability prioritiesStep 3: Acquire InformationPoll: How do you typically get information about sustainability from your suppliers?Written marketing materialSales presentationsSupplier websiteInformal one-on-one meetingsI have to inquireI don’t receive information

30. Step 3: Acquire InformationYou’ve started the conversation, now begin to acquire information on company and product sustainabilitySee 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"A lot of companies publish how green their building is, but it doesn't matter if you're shipping millions of power-hungry products with toxic chemicals in them," …."It's like asking a cigarette company how green their office is.”Apple CEO Steve JobsSource: Businessweek 2010

31. Step 4: Evaluate InformationIf you have information gaps, circle back to “Acquire information”Do you have a process to manage information?

32. Possible starting points:Review and compare to information in Guide & “For More Information” linksCompare information with your company priorities identified in Step 1Talk to your sustainability teamTalk to other category managers

33. Evaluate InformationTypes of information you may receive:

34. Eco-Labels: One tool in your toolkitLearn more about the eco-labels for your categorySOURCES: World Resources Institute, Big Room Inc. | Bonnie Berkiwitz and Laura Stanton/The Washington Post - May 3, 2010

35. Ask for substantiation on vague terms like:Eco-friendly

36. Sustainable

37. Green

38. Environmentally-friendlySin of the Hidden Trade-OffSin of No ProofSin of VaguenessSin of IrrelevanceSin of FibbingSin of the Lesser of Two EvilsSin of Worshiping False LabelsFor more information, see Guide pages 27-28(Used with Permission)