Last week’s Sustainability Summit in Seattle was jointly hosted by the FMI/GMA Trading Partner Alliance. If you’re not familiar with the acronyms, they are the Food Marketing Institute (FMI) and the Grocery Manufacturers Association (GMA), and together they have been hosting these summits since 2010. This collaboration is focused on providing tools and resources to their respective members to make them more sustainable businesses. The alliance’s efforts have come a long way in a few short years.
There were a number of tracks at the conference, from packaging and procurement to sustainable supply-chain management and communications. But a key theme underlying many sessions and presentations was, plain and simple, risk.
Risks in the global supply chain
The summit kicked off with a keynote address by GreenBiz Group’s own Joel Makower. While he addressed a number of topics, perhaps the big message for this audience came as he described the food-energy-water nexus. The focus is on how companies are balancing the trade-offs among energy, water and food in order to reduce meet the growing global demands for all three, and the need to rethink production and delivery systems.
At one point, Makower showed a slide featuring dozens of major companies and brands and asked what they all had in common. The answer was that all of the companies had needed to restate their earnings based upon increased costs of key commodities. In a separate address, McKinsey’s Steve Swartz pointed out that the top concern for manufacturers was resource scarcity, consistent with our findings in a joint research effort with Ernst & Young (PDF). In that report, water was identified as the No. 1 resource-related risk.
The risk associated with water availability was made abundantly clear in a session conducted by Deloitte’s Will Sarni and MillerCoors Director of Sustainability Kim Marotta. Sarni provided an overview of water stress, both globally and nationally, and how companies are using data analytics to develop a water strategy. Sarni asserts that the key to long-term strategy is to not consider the price of water in your assumptions (compared to other critical resources, water almost can be considered free) but to consider the “value at risk.” This includes both the impact of disruptions due to drought and water-intensive energy generation.
Millennials and other demographic surprises
One of the more interesting keynotes was when Hartman Group CEO Laurie Demeritt described how the grocery retail landscape is evolving. She noted that consumers are much more engaged with the crossover of their food and technology. Citing Pinterest posts of “What I’m eating now,” the rise of celebrity chefs, reality TV and food-focused blogs, she noted that we’re more involved with eating, although less involved with cooking. In fact, consumers are “composing” their meals while looking to vendors to be their sous chef.
One number that stood out comes from census data identifying that 70 percent of U.S. households have no children younger than 18 (that’s up 23 percent since 1960). Reflecting this shift, only 20 percent of primary shoppers are moms whereas 28 percent shop for single-person households. And among all adult eating, 46 percent of occasions are alone. As to shopping behaviors, 50 percent of shopping “trips” involve going to two or more stores.
The fewer number of households with children wasn’t as much a surprise to the cereal manufacturers I talked with as it was to me. And it probably shouldn’t be as we learned that Millennials, also known as Generation Y, make up the largest generation yet, with a majority now in their 20s. They are 2.3 billion strong around the globe. According to Ernst & Young’s Nancy Gillis, this is a generation that is socially and environmentally conscious and technologically brilliant, but doesn’t like ambiguity.
During the same session, Net Impact CEO Liz Maw cited recent research that revealed 85 percent of MBAs would take a 15 percent pay cut to work for an organization whose values match their own. The same study highlighted that employees who make an environmental impact on the job are twice as satisfied as those who don’t.
From composing to composting – reducing food waste
One positive impact of the FMI and GMA alliance is the ability to convene an industry coalition to reduce food waste. According to a 2012 study (PDF) by BSR and commissioned by the alliance, post-harvest food waste levels in the U.S. are approximately 121 billion pounds per year, or 390 pounds of food waste per capita. Most of that waste -- about 80 billion pounds a year -- goes to landfills, contributing to greenhouse gases and forfeiting opportunities to be used in more productive ways.
The issue of reducing food waste is just one area where competitors and customers can come together with a singular focus toward problem solving. The alliance built by FMI and GMA certainly has more opportunities to bring sustainability to their respective industries while also creating a positive impact for all of us while we compose our next meal.
Photocollage by GreenBiz Group