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Food Companies Put Their Supply Chains on the Menu: The State of Green Business 2010

Editor's Note: To celebrate the launch of the third annual State of Green Business report, we will be highlighting over the next two weeks the 10 big trends that are shaping the future of the greening of mainstream business. You can download the report for free here, and read all 10 trends on GreenBiz.com.

The sustainability of food hasn't traditionally been much of a mainstream consumer issue. Whatever concerns consumers had about the environmental impacts of bringing food to the table were eaten up by concerns over taste, price and nutrition, with some interest in pesticide residues and other safety- related matters. Overall, there hasn't been much of an appetite from mainstream consumers about food companies' sustainability practices.

But the agricultural and sourcing practices of Big Food have come under attack by activists. Moreover, some companies have seen that the supplies of raw materials -- fish and seafood, in particular -- are dwindling to the point that is threatening the financial sustainability of their operations. And like all industries, food processors have been under pressure to eliminate waste and inefficiency, and to reduce their greenhouse gas emissions.

The result -- a gumbo of activist pressures and sourcing constraints, seasoned with consumer concern and efficiency demands -- are driving food companies to make dramatic shifts in how they operate and what they produce. That's leading them to push their suppliers -- often, a long and complex web of growers, producers, wholesalers, processors and marketers -- to bring better environmental performance to the table.

One emerging trend is the re-localization of agriculture, in which supermarkets, restaurants and foodservice companies are catering to citizen interest in supporting local agriculture and food production, The Whole Foods chain began a Local Producer Loan Program in 2006, which it ramped up in 2009. Safeway launched a campaign to highlight the amount of locally grown food it stocks in its produce departments. Its Locally Grown campaign aims to promote the company's partnerships with regional farmers. The buy-local trend was ordered up by the foodies inside San Francisco's City Hall, which adopted what may be the country's first county food policy that aims to improve access to healthy food while supporting local agriculture and reducing shipping-related greenhouse gas emissions.

{related_content}Talk about local: Cities are beginning to view opportunities to foster urban agriculture, turning empty lots and un- or underutilized land into vegetable, herb and flower gardens. And rooftops: The notion of high-rise urban farms is being envisioned and served up by budding entrepreneurs who view opportunities to supply restaurants, farmer's markets and other venues with locally sourced produce, flowers, even fish.

Fish, as noted earlier, are experiencing a sea change, in large part because of the shortages of everything from salmon to sole. About 75 percent of the world's most commercially important fish stocks are overfished or fished at their biological limits, say experts. But aquaculture, a.k.a. fish farming -- in which young fish are raised on fish meal or grain -- can be environmentally problematic, too. So, activists are stepping up pressure on fish processors, restaurants and retailers to avoid unsustainably harvested fish. Greenpeace, which launched its first seafood sustainability scorecard in late 2008, took supermarket retailer Trader Joe's to task in 2009 for that retailer's last-place ranking, even creating a campaign website, www.traitorjoe.com. With such issues in view, the foodservice giant Sodexo committed to reel in only sustainable wild-caught fish by 2015.

Tomorrow: Packaging Companies Rethink the Box



Photo CC-licensed by Flickr user Lars Plougmann.

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