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© IGD 2014
Toby Pickard, Senior Sustainability Analyst
托比·皮卡德 , 可持续发展高级分析员
Prepared for:
© IGD 2014
Centre for insight, education and best practice
• 750+ members across consumer goods sector
• Total value chain perspective
• 40 industry experts, trainers and facilitators
• Well connected and well travelled
• Our expertise:
– Retail and channel strategies
– Future proofing and horizon scanning
– Commercial, category and supply chain excellence
– Collaboration with trading partners
IGD is a research and training charity that helps the food and consumer goods industry deliver the needs of the public.
Source: IGD
© IGD 2014
Cutting to the chase...
24th October
2005
15th January
2007
18th January
2007
Source: IGD
© IGD 2014
Scene Setting: The Perfect Storm...
Source: IGD
By 2030, the world’s population will rise from 7 billion to over 8 billion Source: UN / World Bank
BILLION BILLION
7 8
By 2030, demand for food will increase by 50% Source: FAO
50% FOOD
By 2030, demand for energy will increase by 50% Source: IEA
By 2030, demand for water will increase by 30% Source: IFPRI
H2O 30% ENERGY 50%
© IGD 2014
Why are UK retailers focusing on Sustainability?
The UK food industry accounts for:
• About 14% of energy consumption by UK businesses per annum
• 7 million tonnes of carbon emissions per year
• About 10% of all industrial use of the public water supply
• About 10% of the industrial and commercial waste
• 25% of all HGV vehicle kilometres in the UK
Source: IGD research and Defra
© IGD 2014
UK retailers’ key Sustainability focus areas
Source: IGD research
Tesco
‘Scale for Good’
Opportunities for young people around the world
Improve health and tackle obesity
Reducing food waste globally
•Trade responsibly •Reducing impact on the environment •Great employer •Support local communities
M&S
‘Plan A’
Climate change
Waste
Natural resources
Fair partnership
Health and wellbeing
Involve customers
Make Plan A how they do business
Morrisons
‘Food with thought’
Responsible sourcing
Excellence in selling
Health and well-being
Community investment
Waste prevention and carbon management
Asda
‘Sustainability 360’
Energy – save energy and costs
Maximising recycling and sending zero waste to landfill
Selling sustainable products
Acting to reduce carbon emissions across operations
Charity and health
Sainsbury’s
‘Live Well For Less’
Best for food and health
Sourcing with integrity
Respect for environment
Making a positive difference to their community
A great place to work
Env. Sourcing Community Health Company
© IGD 2014
Who is most at fault for causing environmental damage?
Source: Unilever
24 47 14 1 1 1 10 0 2
21 56 10 1 1 0 6 1 4
18 61 10 1 0 0 7 1 3
17 54 17 1 1 0 9 0 1
15 63 11 1 1 0 2 1 7
14 66 11 1 0 0 5 0 2
12 65 10 2 0 0 6 1 5
8 70 9 1 0 0 7 1 3
0 10 20 30 40 50 60 70 80 90 100
ITA
JAP
FRA
SPA
USA
AUS
UK
GER
Individuals Industries / companies
Central government
Local government - my council Non-Governmental / Non-Profit orgs Local community groups
International bodies
& agreements (e.g. Kyoto)
None of these Not Stated
© IGD 2014
Shoppers want transparency...
Source: IGD ShopperVista, July ‘13
Knowledge of how grocery products are made
... % who can imagine restricting their purchase of food and grocery products to
fully traceable items
2011 2013
2010 2013 34%
19%
56%
12%
60% 75%
© IGD 2014
Examples of levers for individual action Consumers are more informed than ever...
Source: IGD Research
GoodGuide helps shoppers find safe, healthy, green & ethical products based on scientific ratings
Buycott helps you to organize your everyday consumer spending so that it reflects your principles
puurBuy’s mission is to make it easy to find sustainably-sourced food wherever you are.
© IGD 2014
Transparency… an unstoppable force
Source: IGD Retail Analysis
Digital labelling – Nestlé
Traceability app – McDonald’s
Nestlé has started to add QR codes to its Kit Kat bars, so that people have access to information about the nutritional profile and environmental and social impacts of the product.
TrackMyMacca’s is a ‘behind the scenes’ traceability app of your McDonald’s meal, showing where the food comes from.
Edible labelling – Moshi MoshI Sushi chain Moshi Moshi has taken QR codes to the next level by creating an edible code made from rice paper and squid ink. When consumers scan the code with a smartphone, it will take them to the www.eatmsc.org website where they can read about where the fish comes from and how it was caught.
© IGD 2014
Reasons to invest in sustainability
What are the business reasons to invest in sustainability?
• To add brand value (e.g. Unilever)
• Supporting a brand (e.g. Kenco coffee)
• Anticipate possible regulation (e.g. plastic bag reductions)
• Leadership (e.g. Marks and Spencer (?) )
• Differentiation
• Cost saving
• Consumers expect it
• It’s the right thing to do
Source: IGD Research
© IGD 2014
Financial advantages of an effective Sustainability strategy
Source: IGD
“Asda sustainability strategy set to deliver £800 million in
savings by 2020”
“net benefit of £185m in its first five years”
“On track to become a zero-carbon business and our low-carbon investment is already
saving us £200 million a year”
© IGD 2014
Tesco – Reducing packaging
Source: IGD research and Tesco
© IGD 2014
Sainsbury’s - Fairtrade
Source: IGD research, Sainsbury’s, Comic Relief and FairTrade
Sainsbury's Fairtrade sales
have increased by 19% to
£280million over the past
year, meaning one in every
four pounds spent on
Fairtrade in the UK is spent
at a Sainsbury's store
© IGD 2014
Sainsbury’s – Reducing consumers waste
Source: Sainsbury’s presentation at IGD packaging conference
© IGD 2014
Sainsbury’s - Noble Foods and the Woodland Trust
Source: IGD research, Sainsbury’s, Noble Foods, Woodland Trust and Business in the Community
By 2020, Sainsbury's aims to double
the amount of British food it sells and
wants to source all key raw materials
and commodities sustainably.
© IGD 2014
Asda - Increasing transparency
"My ambition for Asda is to actively involve customers in every aspect of the business, to lift the lid on how we do things“
Former CEO Andy Bond
Source: Adsa
© IGD 2014
Asda – Reducing packaging and road miles
Source: IGD research, Asda, businessGreen, Which? and The Grocer
In-store refillable detergents
Trial was run at five stores,
with Asda delivering two
variants of their own-label
fabric conditioner.
© IGD 2014
Marks and Spencer - Schwopping
Source: IGD research and Marks and Spencer (2013)
In the four years since M&S worked on
clothes recycling with Oxfam, it has seen
over 11 million items donated, worth an
estimated £8 million to the charity.
© IGD 2014
Southern Co-operative - Educating customers
Source: IGD Research (2013)
© IGD 2014
Thornton’s Budgens - Local produce
Source: IGD research (2013)
© IGD 2014
Direct and indirect impact - Supplier engagement
Source: IGD research and Asda: part of the Wal-Mart family (2009)
Not including consumers’ consumption
The index will bring about a more transparent supply chain, drive product innovation and, ultimately, provide consumers the information they need to assess the sustainability of products. If we work together, we can create a new retail standard for the 21st century. Mike Duke, President and Chief Executive Officer, Wal-Mart Stores, Inc
© IGD 2014
Joint Business Plan: Unilever promotion with Walmart to empower shoppers Save money and help the environment
– Did you know that your family could
save up to $100 and 3,200 gallons of water per year by turning off the water when you shampoo and condition?
– Did you know your family could save up to $150 and 4,600 gallons of water per year by shortening your shower time by 2 minutes?
Source: IGD research and Unilever (June 2011 )
These messages resulted in promotional packs of Suave being sold out in three weeks
© IGD 2014
Tesco knowledge sharing with suppliers
Source: IGD research, 2degrees and Tesco
● Launched in March 2011
● The Tesco Knowledge Hub currently has over >1,800 supplier members from >700 different organizations.
● The Hub is a private space exclusively for Tesco suppliers to share experience and questions on carbon reduction and wider sustainability challenges
© IGD 2014
Joint Business Plans: Tesco and Unilever
Educate Reward
Shopper approach
SMALL ACTIONS in home can make a
BIG DIFFERENCE for the environment!
Source: IGD research and Unilever (2011)
© IGD 2014
Tesco Climate Week activities in-store
Source: IGD research and Tesco (2011)
© IGD 2014
Joint Business Plans: Tesco and Procter and Gamble
Source: IGD research, Tesco store visit, Tesco and P&G (2012)
© IGD 2014
Asda knowledge sharing with suppliers
Source: IGD research, 2degrees and Asda (2012)
● >1,000 members from +350 companies
● Connecting suppliers across categories and issues
● Sharing knowledge through case studies, webinars, events and discussions
Asda launched its Sustain & Save Exchange, through 2degrees, with the support of IGD in 2012, which is a online information sharing platform. The Exchange is hosted by 2degrees and is supported by senior management within Asda-Walmart, and IGD.
© IGD 2014
Asda and Procter and Gamble
The partnership with Asda will help shoppers save a life every hour by 2020
Source: IGD research, P&G and Asda (2014)
© IGD 2014
Industry wide collaboration
• ECR UK - Efficient Consumer Response
• Product Sustainability Forum
• The Consumer Goods Forum
Source: IGD research, ECR, WRAP, Consumer Goods Forum and Sustainability Consortium
© IGD 2014
Summary and round up of retailer strategies
Retailers are...
• recognising that the majority of the impact within the supply chain is outside their direct footprint
• increasingly looking to source products that are both local and ‘sustainability certified’ (Palm Oil, FSC, MSC etc)
• opening their doors and are becoming more transparent
• developing scorecards to monitor success and increase transparency
• working with NGO to ensure that they are focusing on the most pressing area
• seeing sustainability as a competitive issue
Source: IGD
© IGD 2014
Where Next?... Profit and Loss account on natural resources
Puma says it has produced the first-ever Environmental Profit and Loss (EP&L) statement.
The account valued the greenhouse gas and water consumption impacts of the company’s operations and supply chain at €94.4 million ($133.5 million).
Puma now plans to factor water scarcity into its procurement decisions.
The company now requires its top suppliers guarantee that sub-suppliers meet Puma’s core environmental standards.
Source: Puma and Environmental Leader (2012)
© IGD 2014
One step further... Net Positive
Source: IGD research, BT and Kingfisher (2012 and 2013)
© IGD 2014
Final thoughts
• Sustainability is a journey, not a destination
• Different organisations have different focuses and are at different stages of the journey
• Organisations will need to continuously improve performance; to mitigate negative impacts and maximise the positive impacts
• There is a need for collaboration and improved integration; no individual person, company or country can address the issues alone
• Need to mainstream sustainability in core business strategies and values
Source: IGD
© IGD 2014
Further information and questions
Source: IGD.com, IGD’s Retail Analysis and IGD’s Supply Chain Analysis
Access free information on Sustainability by visiting IGD’s sustainability website, www.igd.com/sustainability. The website is a one-stop-shop information resource to assist you in rising to the challenges associated with sustainability issues.
See the Supply Chain Analysis ‘Sustainable Supply Chains’ hub page for the latest insight, presentations and news from retailers and manufacturers in food and grocery: http://supplychainanalysis.igd.com/Hub.aspx?id=18&tid=6&fid=3
Go to IGD’s Retail Analysis for the latest news, presentations and developments from retailers in food and consumers goods industry. Find out more here: http://retailanalysis.igd.com/
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Website Case studies
Downloads
Website Presentations
Retailer news Presentations
© IGD 2014
Contact details
For further information, please contact: [email protected]
Or visit: www.igd.com/sustainability
Follow us on Twitter @TobyPickard_IGD