How sustaining the planet and the food industry intertwine
Food, beverage, and agriculture companies can find many reasons to promote sustainability in their operations: protecting the planet, answering to consumers, and, in some cases, improving their bottom line. As consumers demand more corporate responsibility and transparency from the companies they patron, the food industry is finding that sustaining the planet is another way to sustain the industry itself. While certain segments of the industry, such as sugar, soft drinks, and processed foods, are otherwise seeing sales declines, integrating sustainability could be one way for some of these companies to bounce back.
How major food and beverage companies measure up
Each year since 2013, Oxfam International has run a "Behind the Brands" campaign, which ranks the world’s 10 largest food and beverage companies on various facets of sustainability, such as access to land, water usage, transparency, treatment of farmers, and workers’ rights. Oxfam scored each of the seven categories on a scale from 0 to 10 for a possible total of 70 points.
The 10 largest food and beverage companies ranked as follows:
1. Unilever PLC
2. Nestle SA
3. Coca-Cola Co.
4. PepsiCo Inc.
5. Mars, Inc.
6. Mondelez International
7. Kellogg Co.
=8. Danone SA
=8. General Mills Inc.
10. Associated British Foods PLC
Unilever snagged the No. 1 spot with a 71% score, overtaking Nestle, the top sustainability contender since the campaign began. The only exception was October 2014 when the two companies tied for first place with a score of 70%. The highest category score was a 9 for Unilever in the climate category, which includes reducing greenhouse emissions in supply chains, deforestation, and guidelines for suppliers.
Eight of the 10 companies improved their overall score in the time between February 2014 and March 2015. However, while these companies’ policies look great on paper, it’s still going to take time for the implementation of the new policies to come into play and have an impact.
Released several months before the Oxfam report, the 2015 Global 100 sustainability index, from Toronto-based media and investment advisory company Corporate Knights, commended four major food and beverage companies for their commitments to sustainability. Unilever came in at No. 22, Coca-Cola Enterprises at No. 26, General Mills at No. 49, and Campbell Soup Co. at No. 77. Coca-Cola made a significant jump from its spot at No. 43 in 2014.
How food companies can acquire sustainability
Food and beverage companies are approaching sustainability in a variety of ways, each committing to different aspects of sustainable practices with varying intensities and commitments. One way major companies have done this is to acquire smaller, greener companies. For example, in 2000, Unilever acquired Ben & Jerry's, an environmentally and socially progressive ice cream company.
Acquisitions can have their drawbacks, however, as consumers and activists who have issues with the larger company may reject the smaller brand as soon as it is acquired. Some consumers may fear that the larger company will tamper with the smaller company’s sustainable practices. Acquisitions can also be seen as a superficial move solely meant to boost the larger company’s reputation without the larger company ever taking significant steps toward sustainability.
What food and beverage companies are doing to improve sustainability
Instead of acquisitions, many companies are looking inward for ways to promote sustainability in various facets of their operations.
Nestle USA announced earlier this month that it would invest $7 million to reduce water consumption at several of its California facilities, for an estimated annual savings of about 63 million gallons of water. After transforming a dairy plant in Mexico into its first "zero water" facility, its dairy plant in Modesto, CA, will be the next zero water undertaking. This is crucial at a time when Nestle has been criticized for continuing to bottle water in drought-stricken California.
Monsanto Co. released its annual sustainability report earlier this month, in which the company announced that by 2020, it would implement a 22% reduction in greenhouse gas emissions from its crop protection operations, which includes Roundup herbicides. These operations are the primary contributors to Monsanto’s carbon footprint. But will that help Roundup's reputation when the World Health Organization recently reported that Roundup's main chemical, glyphosate, can be linked to carcinogenic effects? In this case, companies like Monsanto can see the benefit in turning toward sustainable practices to offset certain public stigma of their operations.
Since 2005, Kraft Foods Group has seen a more than 20% reduction in energy, more than 7% reduction in water, and more than 35% reduction in amount of waste to landfill per ton of manufactured product. Since 2010, the company has reduced packaging by 109 million pounds. The latter is encouraging as Kraft is once again under fire for its generally unrecyclable Capri Sun packaging.
As part of its "Brewing a Better World" long-term sustainability program, from 2008 to the end of 2014, Heineken International reduced its breweries’ water consumption by 23% and reduced CO2 emissions by 30%, both of which surpassed original target reductions. Heineken has begun using more solar- and wind-powered brewing equipment and more eco-friendly cooling agents in its breweries, and the company is also sustainably sourcing raw agricultural materials. Over the last six years, Heineken has strong savings to show for its sustainability efforts — nearly $84 million.
Companies across the food, beverage, and agriculture spectrum have taken strides, large and small, to incorporate sustainability into their standard operations, and will likely prompt peers to do the same.