The document discusses the importance of sustainability in the food industry, emphasizing its role in ensuring long-term environmental health alongside economic viability. It highlights various strategies and initiatives from organizations such as the Food Marketing Institute (FMI), as well as the challenges and opportunities businesses face in adopting sustainable practices. The future of sustainability is portrayed as essential for the food sector, requiring collaborative efforts among stakeholders, government, and consumers to ensure effective implementation.

1. USC Food Industry Management March 11, 2011

2. The Sustainability Tidal Wave Jeanne von Zastrow, Senior Director, Sustainability, FMI Sustainability: What’s the big deal? Food industry responses? What does success look like? Hurdles and opportunities Ideas for you/your company What’s coming next? How to prepare.

3. About the Food Marketing Institute Feeding Families and Improving Lives 1,500 supermarket/wholesale members worldwide Government, food safety, education, media and consumers Chartered member sustainability initiative in 2006

4. What is Sustainability? Actions, lifestyles and products that meet current needs without sacrificing the ability of future generations to meet theirs. Business strategies and practices that promote the long-term well being of the environment, society and the bottom-line FMI Sustainability Task Force Definition A HEALTHY balance = People, Planet and Profits

5. What’s the big deal? Fragile Planet Developing World Globalization Toxins Changes in Climate Social Upheaval

6. Living beyond earth’s capacity is not sustainable… l/3 of world ecosystems = significant decline l/3 of forests = disappeared in last 50 years Fisheries in collapse = severe crisis by 2048 Water Wars - 80% world fresh water = agricultural use and 50% rivers heavily polluted and/or drying up Energy resources - shortages, food to energy Climate change - extreme unpredictable weather playing havoc on prices and supplies

7. Global Population Increases … 6.3 Million Monthly Los Angeles Chicago Source: U.S. Census Bureau

8. 75.4 Million Annually Population of Iran Source: U.S. Census Bureau

9. And by mid-century, the world will be home to 3+ billion more people.

10. In 40 years, the world will need 100% more food than we produce today. Source: Science Magazine, 2005

11. “ By almost any measure, producing food has the largest impact of any human activity. Most estimates suggest that we will need to produce twice as many calories on the same amount of land we use today if we want to maintain biodiversity and ecosystem functions.” - Jason Clay, World Wildlife Fund

12. Society Worldwide Under Stress Inequity -The richest 200 people make more than world’s poorest 2.5 billion people 50% of world population live on under $2 day Despair - 500 million live in squatter camps/ slums Demand doubles by 2050 as developing countries move from poverty to middle class Conflict over freedom, lifestyle, food, water and energy resources

13. Source: NWS We are in the eye of the hurricane…

14. WHO is driving the issue and why? Media Advocacy Groups Customers and Employees Government Education Business

15. “ Environmentalists” What a difference 30 years make! THEN Hippies and Wackos Communists Tree Huggers Granola Heads NOW Sophisticated Educated Socially Conscious Ethical Eco Geeks, Eco Moms Greeniacs, Freegans

16. Media – Are there ANY who have not devoted major stories to sustainability?

17. Recent Consumer Headlines Greenpeace: McDonald’s harming the Amazon Tesco invests 500 M to create ‘green consumer revolution’ UN says eat less meat to curb global warming Wal-Mart tells suppliers to ‘go green’ “ Green Week” on national and local stations Oprah and others urge consumers to go green, buy local and recycle Planet Green TV Channel

18. 3/3/11 WSJ article about Sustainable Seafood – kudos to Safeway partnership with Fishwise on seafood 12/27/10 SuperValu Announces Partnership with World Wildlife Fund 12/10 Unilever unveils major sustainability commitments 2/2/10 Tesco first” Zero Carbon Store” Food Industry Buzzzzz…

19. Advocacy Groups Have Global Clout! World Economic Forum % of “yes” minus % of “no”

20. You don’t want activist groups as your enemies…

21. Successful NGO + Business Partnerships World Wildlife Fund and Coca-Cola conserve and enhance fresh water resources around the world Greenpeace and Target dialogue changed seafood policies Natural Resource Defense Council initiated the multi-stakeholder group developing Sustainability Index for Fresh Produce (growers, wholesalers, retailers, other environmental groups) The Conservation Alliance of 15 NGO’s in dialogue with FMI’s Sustainable Seafood Working Group – led to NGO Advisory Committee.

22. Engaging With Stakeholders Partnerships; sourcing and policy advice; fishery improvement projects

23. Consumers - Global 3 Billion people, l/2 world population are under 25. The most environmentally/socially concerned consumer segment Internet and globalization allow the “haves” and “have not’s” to peer into each others worlds Greenest populations based on individual desire to purchase green products and to work for environmentally responsible organization #1 China #2 Australia #3 Canada #4 Sweden #5 USA Tandberg.com report

24. U.S. Consumer Trends Conspicuous consumption is alive and well Americans produce 2 X daily waste of Europeans, 20 times typical person in developing world and estimated at $2,000 per household They want to change – not sure how 89% interested in green products, 36% regularly buy them Green shoppers twice as loyal to primary supermarket Basket with one green product average ring = 60% higher Sustainability, local sourcing = hottest 2010 menu trends Cooking at home higher in 2009 than previous 25 years

25. From Personal to Planetary: 360 o Revolution Personal health and wellness is the gateway to environment sustainability Consumers enter the “environmental sustainability” culture based on personal drivers – healthy food and exercise – evolve to include growing concerns about the health and sustainability of the planet.

26. Consumer’s Spectrum of Engagement in Sustainability ME What goes in and on… My Body My Household My Community My Country My World © 2009, Natural Marketing Institute Source: 2009 LOHAS Consumer Trends Database™

27. Consumers: ECO-Babble and Certified Confusion Warning: This “green” label may cause the customer anxiety, blurred vision, severe headaches or dizziness, an exaggerated sense of well-being, yawning, irritability and/or a decreased desire to save the Earth.

28. The World of Eco-labeling… confusing, complicated and conflicting – over 90 in North America

29. DRIVERS: Gen-Y Employees: Future Leaders are Increasingly Green 92% of graduating college seniors want to work for an environmentally responsible company. 40% of employees claim they would work for less pay and/or longer hours if working for socially responsible company 61% accept personal responsibility for making a difference in the world and 78% say companies have the same responsibility

30. A New Day Coming….. last week from from CNN Three key categories for best jobs over the next 20 years Medicine Technology The Environment – including sustainability In our industry – explosion of “sustainability” and “corporate responsibility” FMI committee titles, from zero in 2006 to majority now

31. Government is pushing: If you don’t, we will! Climate change legislation going nowhere….so EPA instructed by Supreme Court to issue new regulations US federal departments must implement “Green Purchasing Standards”, green buildings, green travel FTC “Green Guides” – regulating advertising and green claims White House Meeting on Sustainable Communities Extended producer responsibility 2 states, 8 active, federal movement – in Canada law costing Loblaw $30 M annually Worldwide move toward mandatory environmental product declarations in labeling requiring LCA’s MANY Green Government & Business Partnerships i.e. Green Chill, Smart Way, Smart Waste and more through EPA)

32. Drivers: Business “ The entire food industry shares a responsibility to develop environmentally and socially responsible practices, this is a major business imperative of our times, and one of FMI’s top ten priority issues.” Leslie Sarasin President and CEO of FMI

33. DRIVERS: Business Movers, shakers and pioneers: If we aren’t at the table, we’re on the menu!

34. Food Industry Responding…… Everyone : has initiatives – energy, store design, sourcing – focus is within own four walls and bottom line, short term immediate Majority : just beginning to assign responsibility, develop team. identify strategy, tip toe beyond four walls Pioneers : strategy; leader, team job descriptions; goals and metrics; working with stakeholders, suppliers and government; and recognize strategic advantage for future.

35. BUSINESS DRIVERS: Some examples….. 26 Retailers active on FMI’s Sustainability Leadership Committee and 22 on FMI’s Sustainable Seafood Committee Tesco and Unilever leading the industry joint efforts on Global Sustainable Packaging Standards Winn-Dixie has 60 people internally from many departments on their leading-edge “sustainability team” Wal-Mart initiated “sustainability index” in process, working to reduce packaging; helping employees develop personal sustainability plans Shaw’s, Publix, and others partner with EPA’s Green Business Programs – Green Chill, Smart Way Giant Eagle – LEED pioneer, had Carnegie Mellon students competed in reusable bag design contest

36. Sustainability ECO-Advantages Growth Increase Market Share Build Customer Loyalty Differentiation and Branding Improve Employee Morale and Loyalty Increase Efficiency/Productivity Reduce Risk Secure the Supply Chain for Future Avoid Negative Public Opinion Prepare for/ Be Ahead of New Regulations

37. What Are Steps for Success? 1. Gather information 2. Assemble resources 3. Develop plan 4. Internal team and training 5. Create strategic partnerships 6. Implement 7. Tell the Story

38. What Are Retailers Focused On? Getting own “house in order first, then into the supply chain Internal education and “buy in” Energy, building, operations Sourcing of all products Packaging Waste and Disposal Educating consumers

39. 13 Value Teams – stakeholder meetings to set goals Electronics scorecard to rank suppliers energy efficiency, durability and end of life disposal SEEP program to help suppliers become more sustainable http://walmartstores.com/Video/?id=1233 Created sustainable packaging scorecard to reduce amount of packaging in supply chain by 5% by 2013 Goals Be supplied by 100% renewable energy Eliminate all landfill waste from US stores by 2025 as compared to the 2008 baseline To sell products that sustain people and the environment

40. http://walmartstores.com/Video/?id=1472

41. 18 solar projects that combined eliminate 9.5 million lbs of CO2 annually On average, California stores divert 85% of materials from landfill disposal First grocery member of the Sustainability Consortium Strong internal team developing on sustainability

43. “ Get into a Green Routine” Program Recycling programs http://sustainability.publix.com/what_we_are_doing/recycling.recycling_efforts. php Buy local initiative All packaging must be recycled or recyclable unless there is a food safety issue that prevents it Do not use seafood labeling systems because they don’t want to confuse people

45. Second on Greenpeace’s list for most sustainable seafood retailers Only work with suppliers of wild caught seafood that conforms to all local requirements and is recorded accordingly Work with suppliers certified by third parties, like Marine Stewardship council Pallet trucks powered by fuel cells in distribution centers “ Little Steps, Big Difference” program to teach customers small things they can do to start becoming more sustainable http://videos.wegmans.com/?assetId=297

47. Getting Upper Management on Board

48. Getting Employees on Board Weave into associate training and development Energy stewardship, like shutting of lights, keep refrigerators shut 30-60-90 day training check ins for new employees Integrate into Leadership development program for management potential employees Make cross functional by taking employee out of their normal department to learn under a mentor in a completely different department Source: GfK Roper Public Affairs & Media, December 2007

49. Create sustainable employee culture Incentivize creating healthy habits employees are rewarded for losing weight, quitting smoking, etc Support groups to teach employees about alternative medicine Encourage group fitness Company running clubs and weight lifting groups Employees are happier and more satisfied with their work and company saves on health care coverage costs

50. Getting Employees on Board Personal Sustainability Projects http://walmartstores.com/Video/?id=1223 Inspire small changes that add up Foster the culture from within “We’re going to succeed because it is coming from us—your associates—not from corporate.” – Monika, a Wal-Mart associate who quit smoking as part of her PSP

51. Packaging Less is more Moving away from PVC Leadership on global packaging project Created Sustainable Products Guide to educate product designers and merchants about packaging implications and alternatives

52. Packaging One Example: Quilt Packaging Before: Large corrugated and plastic insert cards After: Smaller corrugated insert cards, no plastic Savings: 30,000 lbs of plastic and 32,000 lbs of paperboard annually $150,000 annually in material costs Target 2009 CRS Report

53. Packaging Water bottles made from recycled PET Removed wax from frozen product cartons so they can be recycled

54. Find what works for you Piloting four different types of solar panel systems on different size stores Most efficient systems depending on stores size will be rolled out across more locations As a result of a wind program, the Porter’s Lake location now has Windmill that supplies 25% of store’s energy needs

55. Biogas Initiative Partnerships with StormFisher and Organic Resources Management Organic matter leftover from stores is added to manuer and fed into anaerobic digestors The result is biogas that is then used to create electricity

56. Example of Companies Working Together on Sustainable Seafood Hurdles and Opportunities Hurdles: Many passionate stakeholders A globally hunted resource Conflicting information Media & marketplace confusion Complexity – we are not scientists Opportunities Strategic advantage for leaders Buying power changes markets Harness the power of consumers

57. Sustainable Seafood - Retailer Research 90% either working on or have policy/mission/guidelines 60% engaged with environmental organizations 70% engaged on sustainability with their suppliers Traceability is one of highest priorities, rates 4.1 (on 1-5) Complexity and inconsistency are two most significant challenges This issue is NOT being driven by consumers NOW, but by multiple stakeholders including industry, government and NGO’s.

59. Sustainable Seafood – Walmart Website Policy: In the United States, we will require all fresh and frozen, farmed and wild seafood products sold at Walmart and Sam’s Club to become certified as sustainable by a third party using Marine Stewardship Council (MSC), Best Aquaculture Practices (BAP) or equivalent standards.

60. Safeway and FishWise Partnership; trainings; product signage More than 1,500 stores Goal: All products are sustainable and traceable Product and supplier assessments Improvement plans and alternative sources Staff training Consumer education Policy engagement

61. Lunds & Byerly’s in Minneapolis – 21 stores Sustainably Sourced Seafood Launch NGO Partners Site Visits Policy and Goals – 75% by 2013, 100% by 2015 Employee Education – all day off site with partners Roll Out to Consumers March 10

63. Best Practices from outside grocery Timberland Nutritional Label Shows customer exactly what went into making their shoes

64. Best Practices from outside grocery Aveda Green-e Offset 100% of the electricity used at headquarters with renewable Cradle to Cradle Environmentally intelligent design with a movement towards zero waste, 7 gold certified products

65. Best Practices from outside grocery Patagonia Footprint chronicles allow customer to track the life of their new products 1% of sales are donated to preservation and restoration

66. What the future could bring… Labels that show every element of a product’s environmental impact Retailers influencing people to shop less and for only what they need Reusable/refillable containers eliminate packaging Retailers new business opportunities with waste

67. Some Multi-Stakeholder Efforts The Sustainability Consortium The Innovation Center for Dairy Industry The Stewardship Index for Specialty Crops The Keystone Field to Market Initiative The Global Packaging Project FMI’s Sustainable Seafood Initiative The Sustainable Food Lab

68. Global Packaging Project Goal is to develop an industry wide language for packaging and sustainability Common metrics to measure sustainability within packaging Guidelines as a tool for industry to reduce duplication, improve supply communication, streamline Multi stakeholder effort, in final stages of completion

69. How FMI’s Members Develop A Sustainability Strategy

70. The FMI Sustainability Starter Kit The “How” A guide to develop strategy Practical tips and advice Best practices and examples Tested with 5 retailers Available in PDF with live links Sponsoring companies of the FMI Sustainability Starter Kit

71. FMI’s Carbon Calculator A free tool to calculate your carbon footprint Compare against your peers Communicate your results Understand your impact and potential savings

72. Free webinar on FMI website Created “by industry for industry” Guidelines, checklists on how to talk to suppliers and source greener products

73. What is Green Sourcing? Products we sell – farm to fork to disposal Equipment/supplies for operations Materials/energy to create our buildings Contractors we use for services

74. FMI Sustainable Sourcing Guide - Tools General Questions for Starting the Conversation with Suppliers

75. FMI Sustainable Sourcing Guide - Tools Category Specific Questions Questions about Sustainability Issues

76. SUSTAINABILITY: Business practices and strategies that promote the long-term well being of the environment, society and the bottom-line. FMI’s Sustainability Task Force

77. They say “sustainability is difficult” because it IS…. A fundamental change in mindset and culture. Unique to every company, no one-sized-fits-all approach. Retailers are increasingly held responsible for products upstream and downstream

78. Land Mines to Watch Out For Naysayer's Get internal alignment & everyone singing from same book Getting pigeonholed in philanthropy This is not “feel good stuff” – it’s triple bottom line Being labeled a “green washer” Walk the talk - get your house in order “inside” before you go “outside”

79. What Defines Success? Senior management commitment Engaged team and passionate leader Dedicated resources, human and $$ Clear governance, glaos and strategy Embedded throughout company ROI – Meets triple bottom-line goals Collaboration with stakeholders

80. Beyond the tidal wave…… Sustainability embedded in every decision Full traceability in supply chain Waste, recycling, EPR take center stage Water and other “footprint” metrics Radical collaboration becomes norm Quality of life vs. Quantity of Things, or SMART consumption revolution Beyond the tidal wave……..

81. Guest Experts on Conference Call Tom McIntyre, Albertsons Katharine Maroney, Ecos US Keely Wheaton, Target Bill Sweet, Price Chopper Laurie DeMerrit, The Hartman Group

82. WILLIAM R. SWEET Vice President Engineering & Construction Price Chopper Supermarkets

83. Over 128 Stores, three warehouses & Main Offices in Schenectady, NY 25,000 Associates Six Northeastern States New York, Vermont, Connecticut, Pennsylvania, New Hampshire, Massachusetts Stores offer a variety of services including: Pharmacies Scratch bakeries with artisan breads Custom-cut meat shops Seafood departments with sushi Full-service floral departments Kosher sections Price Chopper

86. Group Dialogue Biggest barriers to the food industry in understanding, buying in to, and implementing sustainability? What are your key recommendations for getting started? What do you think the most effective one or two ways a retailer could communicate the value of their sustainability activities to their consumers? As you look through your "crystal ball" – how will companies and consumers be different in 5 or 10 years?

87. Questions? Jeanne von Zastrow Senior Director, Sustainability and Industry Relations [email_address] j Questions?..… Jeanne von Zastrow, [email_address] www.FMI.org/sustainability/