Can Sustainability Become The New Green?

7/1/2010

As a business initiative, sustainability's hotter than global warming. But how do retailers sell shoppers on its importance for the meat they buy? An elite panel shares some savvy insights.

Even a cursory review of the nation's business schools reveals "sustainability" degree programs everywhere. Why? Because businesses are discovering that focusing on sustainability has a dramatic impact on energy consumption, operational efficiency and, ultimately, production costs.

Although manufacturers and retailers — including Walmart — have embraced such tools as supply chain management, recycling programs and the use of eco-friendly products, communicating the meat industry's efforts to achieve greater sustainability runs into a serious challenge: How do you "sell" the technologies responsible for the gains in sustainability to shoppers who believe that organically grown, locally produced or grass-fed beef is what represents "real" sustainability?

During an event sponsored by Netherlands-based Intervet Schering- Plough Animal Health, an all-star panel of retailers, researchers and industry experts (see accompanying sidebar) convened during the National Grocers Association (N.G.A.) annual meeting in Las Vegas earlier this year to discuss how — and whether — technology-driven sustainability can serve as both a business strategy and a tool to leverage positive consumer perceptions of the beef industry and its products.

Defining Sustainability

On the ground, sustainability has evolved as a series of "inside the industry" initiatives that translate to the public only in general terms, the panelists agreed. For example: sustainability in the manufacturing of building materials looks quite different from sustainability in grocery retailing, where "you really can't communicate the concept with signs or labeling," as Ron Rehkopf, president and CEO of Texas-based Rehkopf's Family Food Stores, put it. In both cases, as far as the public's concerned, the deliverable is often simply characterized as "energy savings," or "increased efficiency." For the beef industry in particular, that doesn't generate much traction at store level.

An additional complication is that retailers have to balance many factors in meeting consumer demands. "Consumers want green products, but they don't want an [additional] cost with them," noted Mark Westmoland, director of fresh meat for Baton Rouge, La.-based Associated Grocers, Inc. "To really implement sustainability at retail, there's going to have to be a hand-to-hand solution all the way back through the chain to make it work without adding costs to the system."

Moreover, although businesses have to evaluate their decisions to pursue sustainability initiatives based on profitability, that's the wrong message to communicate to consumers. As veteran Cargill executive Dell Allen noted, "Without proven profitability, even the best-intentioned [sustainability] initiatives will eventually die out." Yet, no marketing consultant on Earth would suggest that clients lead with the idea that "we're sustainable — and profitable!"

However, the real hurdle to selling sustainability at the retail meat case involves problems with perceptions, noted Bryan Weech, director of livestock agriculture for the Washington-based World Wildlife Fund (WWF). The actual components of sustainability — whether defined as increased efficiency or reduced carbon footprint or even feel-good green campaigns — often "clash directly with public perceptions of how food is supposed to be sustainably grown, processed and sold," he said.

In the case of beef, technology has fostered "dramatic improvements in every measureable dimension of production," said Jude Capper of Washington State University. From genetics that improve carcass yield and quality, to inputs that increase productivity, modern livestock management systems produce more beef with fewer animals, on less land, with less energy and fewer resources (the sidebar on page 62 for beef's sustainability record). But there's a serious gap between the proven strategies the industry deploys to support sustainability and the warm and fuzzy feelings consumers connect with the concept.

"If you go back 50 years ago, our farming methods were not very sustainable," acknowledged Kansas State University's Ted Schroeder. "We could never support our [current] population if we were still using those methods. Yet, lots of people think the systems [then] are more sustainable than the modern agricultural technologies we have in place today."

The Retailer's Role

With all of the criticism activists heap upon "factory farming," is it even possible to make the case that the very technology under attack is, in fact, how sustainability in food production needs to proceed? The panelists were split on whether that's a near-term or long-term goal, but there was strong consensus that defining and communicating sustainability must be an industry-wide commitment, including several key areas where retailers can play an important role in jumpstarting the process:

Build the Business Case. The more a sustainability initiative supports your branding, the easier it is to sell the benefits to the public. "Shoppers in your stores are shopping on trust," Rehkopf said. "Whatever you communicate to them [on sustainability], you still have to meet their expectations"
Take Ownership. To command premium prices, retailers have to invest in marketing their products, their image and their brands, Westmoland noted. "You have to 'own' your commitment to sustainability in much the same manner," he said
Use "Smart" Labeling. With hundreds of eco-friendly labeling programs and dozens of USDA-approved marketing claims, there's something for every consumer interest. But even innovative ideas — like the "food miles traveled" labels introduced by Tesco in the United Kingdom -can't rely on buzzwords alone. "We need metrics that speak to both stakeholders and end users," Capper said
Get Educated. Buyers, wholesalers and retail management need to better understand the benefits technology has created in conventional meat production systems. As WWF's Weech noted: "Many companies already have put practices in place and are doing things that contribute to sustainability. Whether it's done for business, financial or other reasons, I think there's a great story to be told."
And if there were one conclusion to which all the panelists subscribed, it's that retailers need to be one of the key players in sharing that story with their customers.

Dan Murphy is strategist + principal at M-PhatiComm, a marketing communications consultancy based in Seattle. Murphy can be reached at [email protected].

The Panelists

Ron Rehkopf, president and CEO, Rehkopf Enterprises, Inc; Rehkopf's Family Food Stores
Mark Westmoland, director fresh meat, Associated Grocers, Inc., Baton Rouge, La.
Dell Allen, Ph.D., retired VP, Cargill, Inc., Minneapolis
Chance Brooks, Texas Tech University, Lubbock, Texas
Jude Capper, Washington State University, Pullman, Wash.
Dr. Scott MacGregor, DVM, beef veterinarian, Idaho Falls, Idaho
Ted Schroeder, Ph.D., agricultural economist, Kansas State University, Manhattan, Kan.
Bryan Weech, director livestock agriculture, World Wildlife Fund, Washington

Beef's Sustainability Record

Since 1955, U.S. beef producers have:

Doubled production from 13.2 to 27 billion pounds
Kept herd size at about 100 million animals
Halved the amount of waste per pound of beef
Decreased greenhouse gases by 38 percent vs. grass-fed beef
Reduced land use needed by 442 million acres

The size of Texas, New Mexico, Arizona, Colorado and Kansas combined