Food & Beverage Industry Demonstrates How "Business Success" Can’t be Achieved Without Sustainability

The connections between increased revenue and investment in sustainability programs are complicated.

Even today, sustainability professionals continue to “make the business case” for sustainability.

It’s true that sustainability programs require an investment—in staff, in reporting, in communications, in change management—and the case for making smart investments for maximum results must continue to be made.

However, as we enter 2016, we should no longer need to make the case for sustainability itself.

Although directly linked financial benefits are sometimes difficult to identify, research suggests companies that fully integrate sustainability principles and practices into their strategic operations do outperform peers financially.

The counterargument is that these same companies are just more strategic overall, sustainability or not, so they will perform well simply because of a culture of innovation, risk mitigation, long-term planning, and thought-leadership.

Wrong.

The fact is, as we enter 2016, a company can’t even be considered a strong, strategic player without sustainability being one of its core principles. Sustainability has made it into the short list of core principles of true strategic leadership. In other words, you can’t have one without the other.

Case in Point: The Food & Beverage Industry

Pure Strategies, a sustainability consulting firm focused on the food and beverage industry, recently published results of a survey of major global food and beverage companies.

In the 2015 report, 18% more food and beverage companies, 100% of companies surveyed, are developing or implementing sustainability programs (from 82% in 2013), and 46% of the companies reported increased sales (up from 19% in 2013).

What the report tells us is:

• More than ever before, food and beverage companies are implementing sustainability programs based on best practices of the companies that have already implemented sustainability programs
• As the best-practice modeling increases throughout the industry, more food and beverage companies are reporting increased sales
• The leaders of these food and beverage companies are tying industry-wide sustainability best practices directly to their increased sales

The food and beverage survey shows how sustainability, as a core strategic focus, is permeating the very operating principles of an entire industry – and a significant percentage of companies are making more money in the process.

Using food and beverage as an example, any company looking to become a long-term leader in any sector should look seriously at its approach to sustainability.

Sustainability must truly be integrated into a company’s core strategic plans, or it will likely get left behind.

If your company looking to integrate industry best practice planning into its sustainability strategy, a great place to start is with a sustainability assessment and peer benchmarking report.

Featured B Corp of the Month: Ethical Bean and Why They are Just Better!

We’re big supporters of the principles behind the B Corp movement, but we want to do more than just "spread the love" about it, we want to share the sustainability success stories from other B Corps!  Each month we’ll be publishing an interview with a sustainability champion of a B Corp – and this month we are featuring Ethical Bean!

What made your company decide that sustainability was a priority?

Sustainability has been a core pillar for Ethical Bean since day one. In 1999, when my wife and business partner Kim and I travelled to Guatemala to adopt our daughter, we were shocked and embarrassed to learn that coffee farmers were being exploited and we wanted to do something about it. We decided to start a for-profit business that would be successful in the marketplace without compromising our social and environmental values. In our first year "just. better." became the company’s moniker. The “just” represents our social responsibility: ethical sourcing, small environmental footprint, and a community mindedness (all B Corp values!). On the other hand, “better” reflects our commitment to being a spectacular business, successful for our partners, and a pleasure to work with in all areas. Needless to say when we learned about B Corporation we jumped at being part of a movement that celebrates like-minded companies!

What is the biggest sustainability challenge facing your industry today?

Ethical Bean shares a thorn in it’s side that impacts the coffee industry – particularly the grocery coffee industry: non-recyclable packaging. Our Director of Coffee, Aaron De Lazzer, goes above and beyond to source some of the best Fairtrade organic coffees on the planet, and ensures that they make it fresh to counter tops across Canada and the US. This is a top priority for us as a better business. We want consumers to drink our coffees at their best! Unfortunately, so far this has meant putting them in non-recycling packaging. We’ve instituted a take back program where we trade 12 of our empty bags from our customers for a full new one to reduce the amount of waste going to landfill. We’re storing these bags on site, donating them to creative upcycling programs, and researching all sorts of recycling options moving forward. We are also supporting industry initiatives like the Sustainable Packaging Coalition, a consortium of industry leaders currently using non-recyclable packaging. Not surprisingly, there are a lot of B Corporations among the group. What’s better than good company?

How important is sustainability to your customers, and how do you tell them your sustainability story?

With a name like Ethical Bean, we are making some pretty hefty claims and have a lot to live up to. It’s important to us and to our customers that we are able to verify what we claim and really demonstrate that we walk the walk. We’ve chosen two strategies to do that: third-party certification, and supply chain transparency and traceability. Certifiers like B Corporation, Fairtrade International, Quality Assurance International, and others, allow us to demonstrate our claims with credibility. We don’t want consumers to take our word for it. We want people to know that we are ready to open our books to auditors and really prove it. Beyond that, it’s critical that we’re transparent about our supply chain – especially in coffee with a supply that comes from the other side of the world. That’s why we allow every customer the chance to trace their coffee from crop to cup with our unique (and free!) iPhone app and QR code. Every bag of Ethical Bean comes with a QR code on the back that, when scanned, shows the exact origins of the beans down to an interactive Google Map, descriptions of co-ops, quality notes from our Director of Coffee, and even copies of our certification documents. If we have it on file, you have access on our app. It’s been a very powerful tool to explain our sustainability story and continues to impress our customers, partners, and colleagues in the industry.

What is the most important lesson you’ve learned in your sustainability journey?

The most important lesson we have learned is that it works. Valuing ethics alongside more traditional business goals has not held us back from achieving success. In fact more often it opens doors and generates new business! The B Corp community has proven to be a fantastic example of that, and we look forward to being a B Corp for the long haul!

Lloyd, Bernhardt, Founder:

A recipient of various awards, Lloyd Bernhardt was honored to be included in the 1991 'Top 40 under 40 Achievers' (Business in Vancouver). In 1988, he co- founded Motion Works, one of B.C.'s first and most successful Macintosh software development companies, and consulted for Apple Computer in California prior to launching Ethical Bean. After he and his wife Kim journeyed to Guatemala to adopt their daughter in 1999, a passion for the culture of the country and a desire to better the lives of coffee farmers was ignited. The couple returned to Vancouver and in 2003 launched Ethical Bean Coffee, roasting only Fairtrade certified Organic coffee. Ethical Bean has grown from a local, to a national, to an international success on the belief that social and environmental responsibility is also good business.

Lloyd Bernhardt, lloyd@ethicalbean.com, 604-431-3830

Ethical Bean Coffee is Canada's 2nd largest roaster of 100% Fairtrade certified organic coffee. The Vancouver, BC, based company prides itself on being both "just" and "better" in everything that they do. Whether it is through programs that respect both the earth and its farmers, or by leaving little to no environmental footprint, Ethical Bean is constantly seeking new ways to do the right thing. What began as a small operation with one employee has since grown to operate out of a 10,000 square foot facility employing 24 people.

Check out another article about Ethical Bean!

Tips for Tracking Food from Source to Shelf

How do you track food supplies from source to the shop shelf?

That's one of the many questions posed on 2DegreesNetwork.com, an active online community of sustainability professionals. We regularly contribute articles to 2Degrees, and occasionally chime in on the discussion boards. When we saw the question above about sustainable supply chains, traceability, and the food and beverage industry, we just had to weigh in on the discussion. Here's what SSC President Jennifer Woofter had to say: 

We work with several food companies and I can tell you that there are a few things to consider before you choose an approach, such as:

1. What are you trying to measure? It's really important to develop your KPIs first (even a draft version), and then start looking at the supply chain. Otherwise, the available data and data systems for tracking get too complicated. We have found that, in general, focusing on 5-7 metrics to begin with is best. 

2. How complicated is your supply chain? How many steps does it take to get back to the farm level? How many different suppliers for a single product? How effectively can you trace your supply chain? (For example, it is much easier to track an artisanal product (e.g. steak from a local farm) that you purchase directly from a single farm, as compared to a commodity item (e.g. wheat or corn) that is being aggregated, milled, processed, and packaged before it gets to you). It may help to prioritize your tracking so that you can focus your efforts on the most important ingredients -- for example: dairy and fresh produce (which tend to have a more direct route from farm to table).

3. What kind of data do you already have? (For example, do you know your 2nd and 3rd Tier suppliers?) And what kind of relationship do you have with your Tier 1 suppliers? (Are they likely to willingly work with you to push your data requests back through their own supply chains?) You may find that it's most effective to test a supply chain initiative with your best supplier to develop a "lessons learned" profile before expanding the program.

4. How are you going to use the data? Nothing is more frustrating than spending a ton of time and money gathering and analyzing data just to have it sit on the shelf. Before you develop a program, be clear about how the results of your analysis will impact decision-making. Is this effort about communicating results to the customer? About finding transportation efficiencies? Will you drop suppliers that don't participate? Will you give a price premium to suppliers that do participate? Be very, VERY clear about why you are doing the project and what outcomes you expect to get. That helps everyone along the value chain understand their role more clearly.

(And there are lots of software tools, mapping techniques, and consultants that can help you get where you want to be. But I find that the biggest mistake that people make in these initiatives is by not taking a big step back at the beginning in order to determine the right scope, goals, and outcomes for the project. Once you do that, the next step is to develop a program that ensures accountability throughout the supply chain. For example, if you are trying to track GM/toxins, you will want to develop a list of chemicals of concern, then look at 1) do your suppliers have a policy not to use them, 2) are there appropriate programs in place to ensure that the policy is enforced, 3) is there an oversite (testing/compliance) process in place to ensure appropriate program execution, and 4) does the CEO of each supplier in the chain of custody personally sign off on the guarantee that the product-to-date is GM/toxin free?)

If you'd like more information about sustainability in food and agriculture supply chains, contact us! Not ready for a conversation? Download our white paper on sustainable agriculture.