Sustainability in Overdrive in the Retail and CPG Industry
By Ronald Margulis, Managing Director, RAM Communications
The first thing to note about the Grocery Manufacturers Association’s Environmental Sustainability Summit held in Washington last week is that it was sold out. The Thursday night reception was packed with industry leaders, politicians and non-governmental organizations with a stake in the environment issue. Interestingly, there were few if any of what most would consider the traditional environmental lobby (i.e., tree huggers in Birkenstocks). The attendees were more often than not in suits and ties, and represented the largest companies in the consumer products supply chain. The sponsors, which included IBM, Monsanto and CHEP [Disclosure: a RAM Communications client] were undoubtedly pleased.
The keynotes by Peter Seligman, CEO and founder of Conservation International, and Dan Esty, co-author of Green to Gold and director of the Yale Center for Environmental Law, were very enlightening. Mr. Seligman outlining a clear vision for sustainability in the CPG industry. The educational sessions were varied, addressing water conservation, energy efficiency and packaging innovation.
Retailers grabbed some of the spotlight by highlighting their sustainable efforts. Wal-Mart, for instance, reported it has saved over $1 million in related energy costs by unplugging the lights on the break room vending machines, a suggestion that came from a store associate.
“Wal-Mart doesn’t consider itself a green company but we are doing great things and making progress in the area of sustainability,” Matt Kistler, senior vice president of sustainability, said during a panel discussion that included executives from Safeway, General Mills and Sysco. “[Wal-Mart CEO] Lee Scott has been a tremendous leader in this area for our company, but I also urge you to listen to store associates and implement things from the bottom up.”
For his part, the executive from Safeway, Joseph Pettus, senior vice president, Fuel and Energy Operations, reported that his company expects to eliminate 75 million pounds of carbon emissions by moving all of Safeway’s trucks to biodiesel. “We believe that we are the greenest grocer in the U.S. and maybe even the greenest retailer,” said Mr. Pettus, adding that the company has set the goal of reducing greenhouse gas emissions by 1.5 percent during each of the next four years. “Safeway has made green a priority.”
CPG companies also reported making dramatic advances in sustainability. In a high-powered session that included senior executives from Coca-Cola Enterprises, Campbell Soup, Unilever and Monsanto, attendees heard that a lot has been accomplished, but much more has to be done. Unilever, for instance, has reduced carbon emissions by 30 percent and plans to lower water usage by 50 percent during the next 10 years.
Discussion Question: How can retailers and their suppliers work together to make the trend toward sustainable operations a competitive advantage?
[Author’s commentary] The only downer at the conference came from the Bush administration. Stephen Johnson, the administrator of the Environmental Protection Agency, gave a stump speech that was boring at best. Nothing new from the person who is charged with protecting the environment, and certainly no vision for this industry or any industry other than petro-chemical.