Work Sustainability Into Your Brands

Retailers could boost credibility and shopper loyalty by sourcing store brand products from suppliers that engage in environmentally and socially responsible practices.

For many consumer packaged goods companies, sustainability in the form of environmental and social responsibility is now a critical part of connecting with consumers. These companies understand that they must do some good for society if they are to continue to do well financially.

Many retailers, too, have plenty to tout when it comes to environmental and social responsibility. Fresh & Easy Neighborhood Market, for instance, engages in "green" building practices that run the gamut from greater reliance of natural light via larger windows and skylights to the installation of refrigeration units that use 10 percent less energy than standard units. And Target Corp. gives more than $3 million a week "to support education, the arts, safe families and communities."

That commitment to sustainability, however, often is not as strong when it comes to store brand product procurement. But retailers could boost credibility and shopper loyalty by sourcing from suppliers engaging in environmentally and socially responsible efforts — and communicating such efforts to consumers.

"Responsible sourcing in store brand product procurement is important to consumers, as recently reported in the '2012 Retail Industry Leaders Association Sustainability Report, " notes John Angelilli, chief operating officer for Summer Garden Food Manufacturing, Youngstown, Ohio. "Consumers increasingly want to be engaged in a discussion about how the products they purchase affect themselves, their families and the planet."

A matter of trust

By sourcing store brand products from environmentally and socially responsible suppliers, retailers stand to do more than appease a growing sustainability-minded shopper base. They also stand to build trust among a larger set of consumers.

"When a shopper perceives a retailer to be socially and environmentally responsible, they may feel that this feeling of responsibility applies to them as well, and [that], therefore, creates a positive feeling about the retailer and the shopping experience," says Marko Hayda, private label team lead for Marcal, Elmwood Park, N.J.

Moreover, in this "Occupy Wall Street era," it is important that companies show the good they are doing and the care they are taking to manage impacts on our world, contends Rachelle Jackson, senior director, sustainability practices for UL Responsible Sourcing, Enfield, Conn.

"We are seeing legislation around supply chain issues such as human trafficking and conflict minerals which require companies to be more transparent and disclose their practices in the supply chain," she adds. "The legislation tells us that these issues are important to consumers. The more transparent a company can be, the more trust may develop with their consumer base."

What counts?

In a nutshell, responsible product sourcing on the store brand side means meeting the expectations of many consumers that such products come from suppliers that follow ethnical practices to sustain the environment and align with human rights laws, says Bruce Woodlief, director of marketing for Spokane, Wash.-based Clearwater Paper Corp. He points to two examples of recent legislation that supports these expectations: the California Transparency Act, which is aimed at the prevention of human trafficking, and the updated Lacey Act of 2008, which now includes the commerce of products manufactured from illegally harvested plant and wood timber.

"[Responsible sourcing] is particularly important to retail operators," he stresses. "Unlike branded companies that have a select number of SKUs in one to a handful of categories, a well-developed retail store brand may have products spanning across hundreds of product categories."

On the environmental side, responsible sourcing also means procuring products from suppliers taking steps to reduce the carbon footprint associated with the products throughout their lifecycle, notes Joe Prewett, vice president of marketing for Portland, Ore.-based Coffee Bean International. And beyond ensuring suppliers respect human rights, retailers might want to consider their involvement in certification programs such as organic, Fair Trade and Direct Trade on the social side.

"For true responsible sourcing, retailers must consider a supplier's commitment to environmentally sound practices, sustainable actions and implementation of these values at all levels," adds Felix Musco, president of Musco Family Olive Co., Tracy, Calif. "The cost to the planet and future generations is at stake, and our joint sustainability is supported by valuing these efforts. Moreover, research is suggesting that a growing number of consumers now choose products based on a manufacturer's environmental and sustainable practices — and are willing to pay more for them."

Conversely, if a retailer fails to deliver here, it could lose consumer and community support, Jackson suggests.

"To understand whether these issues are important to consumers, we need only look at the huge amount of media attention that Apple is receiving right now related to the Foxconn factories in China that manufacturers iPods," she says. (According to numerous reports, factory employees are subjected to deplorable working conditions.)

Sustainability in action

In their search, retailers will find no shortage of sustainability-minded store brand suppliers — particularly on the environmental side. Coffee Bean International, for example, integrates sustainability into operations ranging from roaster design and office operation to everyday recycling and composting, Prewett notes.

"These efforts were recently rewarded when we were awarded the City of Portland's BEST award for the most sustainable mid-size company in 2011," he says. "The benefits of our practices contribute to all of our retailers' programs, either by simply providing high-quality, responsibly sourced coffee or [by taking] advantage of our practices and offering coffee for their program that is certified carbon-neutral to reinforce or enhance their own sustainability efforts."

For its part, Musco employs "innovative sustainable practices" across its entire culture and olive production process, notes Bell Hall, director of technical services for the company. The company worked with inventor Frank Schubert of Combined Solar Technologies, for instance, to develop its award-winning Renewable Energy and Wastewater System (RENEWS, a trademarked name).

"Simply put, in producing canned olives, we amass millions of olive pits — each containing stored solar energy," Hall explains. "Our RENEWS biomass plant cleanly burns 15 tons of pit waste daily, using the heat to evaporate used processing water and create steam. That steam drives the largest production steam engine in the U.S., which then powers the plant."

The result? Musco keeps 8 billion olive pits out of the landfill annually while recycling more than 90 percent of its water, Hall says. And any remaining water showing some salinity is used to grow a field of NyPa grass — a special grass that works to pull salt from the soil into its leaves.

"NyPa grass makes a supplemental food for livestock, with salt naturally built in, and we harvest it for local farmers," he adds.

Retailers also will want to source from suppliers who engage in responsible sourcing themselves. And it's hard to beat Clearwater Paper here. The company was the first manufacturer to offer Forest Stewardship Council (FSC) and Rainforest Alliance certification for premium-quality store brand tissue products, Woodlief says, introducing both in 2010.

"FSC … is the global standard that recognizes products that are sourced from fiber that comes from well-managed forests," he clarifies. "This certification is significant to consumers who aspire to support sustainable tissue products without compromising the high quality standards they expect for their household."

Another responsible option on the paper products supply side is the use of recycled paper to reduce the volume going into landfills. And that's exactly what Marcal is doing, according to Hayda.

"We use paper collected from curbs in residential neighborhoods in cities and towns across America — from the small blue baskets in office buildings [to] unwanted junk mail and waste from printers — all in an effort to do something good while, at the same time, producing great products that people need," he says.

And Summer Garden is a sustainability standout on the food processing side. Its plant is a LEED (Leadership in Energy and Environmental Design) certified "green" manufacturing facility registered with the U.S. Green Building Council (USGBC), Angelilli notes.

The USGBC registration covers sustainable sites, water efficiency, energy and atmosphere, materials and resources, and indoor environmental quality, explains Linda McNally, vice president of customer development for the company. Summer Garden was awarded "Silver" LEED status, but is aiming for "Platinum."

"We see our LEED green certification as a way to set ourselves apart from other manufacturers who make store brand products," she says. "In addition to a quality product, this is another way to communicate to shoppers a more holistic approach to food manufacturing."

Packaging efforts, too, are important to sustainability. That's one reason Siloam Springs, Ark.-based Allens Inc. relies on steel cans for its canned vegetable products.

"Any packaging that is 100 percent recyclable has the largest impact," says David Brown, vice president of retail sales for Allens. "[Steel] is recyclable an indefinite number of times. … We want more than our vegetables to be sustainable; we want to make sure that we are making every effort possible to be sustainable in all of our areas of production."

For Aliens, those other areas include transport (the trucks in the company's fleet run on higher-efficiency tires that keep air pressure longer, thereby indirectly reducing greenhouse gas emissions), electricity use (in many of its facilities, Allens slashed usage by 30 percent) and even water-savings programs within corporate offices, he notes.

"While sustainability starts at the field, it doesn't end at the harvest," Brown stresses. "We have several programs at every level to make efforts in reducing our carbon footprint."

Also intent on reducing its carbon footprint is BrucePac, a provider of cooked meat products that is based in Silverton, Ore. According to Keith Beckman, the company's energy and sustainability coordinator, BrucePac managed to slash its electrical use by 5.4 million kWh during the past two years. The company installed an 83-kW photovoltaic system in 2011 and even developed a "Green Team" to help educate employees about environmental sustainability at the workplace — as well as what steps they could take at home.

"Through the same group, we are working to improve carpooling by employees, [with cars being] a major source of our carbon dioxide emissions," he says. "BrucePac has started projects this year to significantly cut our natural gas usage and reduce our solid waste."

The company even keeps an eye toward sustainability when sourcing its own raw materials, Beckman adds. Here, raw product shipment is accomplished via railcars — a cheaper and much more fuel-efficient alternative than semi trucks.

Get the message out

Procuring store brand products from a sustainability-minded supplier is one thing. Communicating the products' sustainability message to consumers is quite another. But the retailer need not necessarily jump through hoops to do so.

If the product boasts eco-advantages (related to material sourcing, formulation or processing), Hayda suggests retailers consider using an "environmental trigger" in the product's packaging and promotional materials. Flowers, trees, birds and other nature-related graphics help, as do label statements such as "100 percent recycled," "No new trees used," and "Whitened without chlorine bleach."

Shelf-talkers next to the product or products, too, work to highlight the sustainability message, Woodlief adds.

"Another [idea] might be grouping like products together in a weekly ad circular, highlighting key sustainable characteristics of the products," he says. "Yet another might include a special product display during 'National Green Week' or some other similar event, highlighting store brand products with unique sustainable attributes."

And if a product is produced at a LEED certified facility, tell that to consumers as well, Angelilli suggests.

"Some of our retailers are already leveraging these facts, as well as [placing] the LEED symbol on their labels and their company newsletters," he says.

Beckman notes that BrucePac's operations are Food Alliance and earthWISE certified — and agrees that third-party certifications are one of the best means to communicate sustainability efforts overall.

"The more stringent the third party is, the more meaningful the sustainability efforts," he asserts. "Education to the public can then be a more effective joint effort to explain the certification by a greater number of companies with the certification."

But tread carefully when it comes to wording any sustainability-related product-related claims, Jackson advises. She recommends that retailers conduct due diligence first.

"For many retailers, that may mean following the guidelines of a specific sustainability labeling initiative such as Fair Trade and other sector-specific labels including FSC, Marine Stewardship Council, Rainforest Alliance, Conflict-Free Smelter, etc.," she says.

Finally, don't hesitate to employ resources already in place on the supplier end. For example, Musco showcases a "short, compelling" video about its environmental initiatives on its website, notes Dan Kelly, the company's vice president of sales. And its RENEWS program — featured on Powering Our Future, a Discovery Channel special — also is viewable on the Musco website.

"We believe retailers and suppliers need to direct consumers to product websites, Facebook pages and other social media," Kelly says, "as well as make use of POS, label packaging and QR codes for this purpose. ... Retailers have a huge untapped opportunity to help guide consumers to responsible purchases. With the growing, ubiquitous nature of Internet-enabled handheld devices, this can be done in real time as consumers browse the aisles and examine a product on the shelf."