Sustainability

For years, consumer concern regarding sustainability practices has been on the rise, and this survey from global management and consulting firm Kearney is yet another indication that these efforts are no longer a luxury but an expectation — even during a pandemic.

Nearly half of consumers say the pandemic has made them more concerned about the environment, with 11% saying they have shifted their purchases based on environmental claims within the past year, according to a new survey the firm emailed Food Dive. The survey was conducted with 1,000 consumers on both March 6 and April 10.

The number of consumers who take the environment into consideration when making purchases has increased since last year — and even since the pandemic started. In 2019, 71% took that into consideration at least occasionally. On March 6 of this year, 78% felt that way. And on April 10, after several weeks where most people were at home to deter coronavirus spread, 83% of consumers said they considered the environment.

About 78% of those surveyed said companies could be doing more to clearly explain the environmental impacts of their products. But fewer consumers think high prices are the biggest barrier to buying items with environmental claims, with the number decreasing 4 percentage points since last year, to 49%. However, more consumers said lack of access to these products in their local stores made them unable to buy them.

The number of consumers more concerned about the environment has been on the rise through the years. According to a study from Nielsen in 2018, almost half of U.S. consumers are likely to change what they buy to align with environmental standards. Kearney's survey found that two years later, eight in 10 consumers consider the environmental impacts of their purchases.

"This year we see consumers expressing a more direct link between their health and the health of the planet,"  Corey Chafin, one of the co-architects of the study, said. "This tells us consumers’ pro-environmental sentiments are more than idealistic assertions."

As activists and governments alike warn the time to slow climate change is growing short and the health of the globe has been shifted into stark relief by the ongoing threat of the coronavirus, concerns about sustainability are unlikely to take a back seat to price and convenience. One of the most significant findings from the Kearney study highlights that certain aspects of convenience are now secondary to sustainability.

Plastics have fallen out of favor for consumers in recent years. In the survey, 85% more respondents this year expressed a commitment to turn down plastic utensils with food orders in the next 12 months. Similarly, there was a 37% increase in willingness to use reusable drinkware, and a 21% bump in intention to bring reusable shopping bags to stores. The likelihood that consumers will purchase in bulk to save on individual packaging jumped 164% from a year ago.

This study showed the climbing rates of illness and death associated with COVID-19 did not significantly impact consumer commitment to incremental improvement in the environmental sustainability of their shopping practices. Even as the grocery and foodservice industries are being radically transformed, sustainability remains a key factor for consumers. The Kearney survey points out the trend toward mindful stewardship was well underway, but consumers’ unwavering dedication is a sign they view planetary and human health as intertwined and are willing to put their money where their mouths are.

In addition to the survey’s clear indication the will is there to shop more sustainably, it appears more consumers are willing to pay to do so. Already, Nielsen found companies have a monetary motivation to switch to more environmentally friendly practices, as two-thirds of customers are willing to pay more for sustainable brands — and this number is continually rising.

Profit is not the only reason for companies to focus on sustainability. Label Insight estimated manufacturers who adopt complete transparency are rewarded with consumer loyalty rates of about 94%. With multiple benefits to be gleaned from sustainable business practices, many companies, including Nestlé, Lindt, Mars, Mondelez, Cargill and Barry Callebaut have jumped on the bandwagon and pledged investments in sustainability. A recent report by Ceres found two-thirds of the more than 600 of the largest U.S. public companies have committed to reducing greenhouse gas emissions, and more than half have formal policies to manage water resources. 

But multiple organizations have shown these can be empty promises. Last year, the Coller Farm Animal Investment Risk & Return (FAIRR) Protein Producer Index found the vast majority of large meat and dairy companies "have yet to meaningfully address even the most basic sustainability risks." Similarly, Greenpeace reported that CPG companies have not shown any significant progress on their sustainability goals. A study from the Barilla Foundation noted companies don't provide enough information about their efforts — a complaint that was echoed by consumers in the Kearney survey.

Perhaps now is the time for companies to commit to these promises and show consumers that when the world is in trouble, they are willing to make a difference where they can.

Article top image credit: NRCS Oregon. (2015). "Cover Crops on Dryland Wheat? Challenge Accepted." [photograph]. Retrieved from Flickr.

A Greenpeace report claimed "not a single company was able to demonstrate meaningful effort to eradicate deforestation from its supply chain."

The environmental organization challenged more than 50 CPG companies, retailers and producers  in early 2019 to demonstrate their progress by disclosing their cattle, cocoa, dairy, palm oil and soya suppliers. The report analyzed retailers, fast food chains and CPG companies on the fulfillment of the sustainability and anti-deforestation goals published on their websites.

Danone, General Mills, Hershey, Kellogg, Kraft Heinz, Nestlé, PepsiCo and J.M. Smucker were among the companies listed in the report that haven't released their progress on these pledges. 

As the climate change debate gains momentum, consumers are demanding that companies take a stand and fight back. As a result, sustainable business practices are no longer an option for companies across the food and beverage industry.

Many businesses have announced plans to make their brands more sustainable as a result, but this report questions whether those pledges will become a reality. Greenpeace's report tracked the follow through of companies with sustainability pledges — specifically those tied to deforestation. The non-profit found that none of those who had pledged to reduce deforestation in their supply chain had been successful yet.

This report could foster concern among consumers who care about these sustainability promises. The companies did not provide Greenpeace with the name of their suppliers for meat, cocoa, dairy, soy and palm oil, and the report said were "hiding behind claims of commercial confidentiality."

Greenpeace said it was denied individual producer names and progress data, so the non-profit was unable to rank these companies favorably based on that. Still, there have been other reports that have shown that many CPG firms have been improving supply chain sustainability — particularly those who require cocoa as a raw commodity.

Nestlé, Lindt, Mars, Mondelez, Cargill and Barry Callebaut have all ramped up their investments and pledges in sustainability in recent years. Cargill, in particular, has had some success with its Cargill Cocoa Promise that encourages better farming practices. 

Ingredients Network reported that cocoa yields jumped by an average of 49% in the 2016-2017 period. Barry Callebaut also has been successful in cleaning up its supply chain, and it recently announced that 44% of its cocoa and 44% of its other ingredients are now sustainably sourced. Hershey also pledged a $500 million investment in West African cocoa sustainability. While Mondelez, Mars and Nestlé were investigated by Greenpeace, Barry Callebaut, Lindt and Cargill — who have moved the needle in their sustainability efforts — were not.

Greenpeace also exclusively looked at the pace of anti-deforestation commitments from companies. Sustainability, however, can span many different components including water savings, recyclability of containers and reduced emissions. In these categories, companies have been making some strides.

Although Nestlé is ranked poorly in the Greenpeace report, two years ago, Nestle Waters announced it received certification from the Alliance for Water Stewardship (AWS) for four bottling facilities. AWS is considered the first comprehensive standard for measuring water stewardship. Nestle Waters has since announced plans to certify 20 factories by 2020, the first beverage company to make such a commitment. 

A recent report by Ceres found two-thirds of the more than 600 of the largest U.S. public companies have committed to reducing greenhouse gas emissions, and over half have formal policies to manage water resources. This visible push toward sustainability is a direct response to consumer demand. About 66% of all consumers are willing to pay more for sustainable brands, and that figure is even higher for millennials (73%) and Generation Z (72%), according to Nielsen.

Consumer perception can be better for companies who commit to complete transparency — something the Greenpeace report said companies are still hesitant to do. Label Insight estimated that manufacturers who adopt "complete transparency" are rewarded with consumer loyalty rates of about 94%.

While there appears to be a long way to go for many companies, perhaps this Greenpeace report will encourage them to be more upfront about their supply chain producers and practices. If companies can show they are working toward improvements, consumers could reward them with patronage and brand loyalty.

Article top image credit: Dikshajhingan [CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0)], from Wikimedia Commons

For centuries, dairy farmers from Wisconsin to California have referred to those squeaky chunks of cheese as curds, but in today's buzzword world, that whey byproduct is upcycled food. 

"We've been upcycling before upcycling was cool, before upcycling was a thing," Justin Shimek, CEO of Mattson, a food and beverage consulting firm, said during a panel at the 2019 Institute of Food Technologists conference in New Orleans. 

But upcycled food is a thing, and a big one at that. According to a study by Future Marketing Insights, the food waste business is worth $46.7 billion in 2019 and expected to grow 5% during the next decade.

There are more companies, large and small, trying to get a piece of the billion-dollar market. These businesses are using food waste byproducts in everything from food and beverages to supplements, biofuel and pet food. At IFT, several startups proudly highlighted their upcycled ingredients, from Planetarians' protein flour made from defatted sunflower seeds (what's leftover after oil is extracted) to Renmatix's functional fiber created from maple waste.

While it's not surprising to see entrepreneurs venture into the space, Shimek said it's also becoming an attractive market for more established companies.

Tyson Foods, for example, had created protein crisps Yappah from leftover chicken trim, vegetable puree and pulp from juicing and donated spent grain from Molson Coors. The company did, however, stop producing the item in October 2019. Spent grains are a popular ingredient, with beer rival AB InBev backing beverage startup Canvas to develop fiber-rich drinks using the byproduct and ReGrained producing granola bars.

These innovations are strategic. Upcycled ingredients are in demand. In a 2019 food waste and upcycling survey of more than 500 consumers from 25 to 73 years of age, Mattson found that 74% saw food waste as an extremely big issue, while 26% said it was somewhat of an issue — meaning everyone believes at some level there is a problem that needs a solution.

And they're putting their money where their mouth is. In the same study, 39% of consumers currently aim to buy food and beverages using upcycled ingredients. That number rises when looking to the future, with 57% planning to buy more next year.

"There's a wind at your back and an opportunity," said Shimek.

A call to action for large and small companies alike

How to seize the opportunity, however, looks different for a large CPG company versus a startup, and not simply because of resources and financial power.  

"Most of the companies are upcycling because they have a problem [with food waste]. We are upcycling because we have the solution," said Danilo Cantero, a vice president of research and development at Renmatix whose technology turns raw plants into sustainable products.

The problem weighs heavily in the U.S. with 133 billion pounds of food thrown out annually, according to the U.S. Department of Agriculture. While individuals bear the brunt of the blame, the Mattson study showed consumer sentiment looked harshly on the role of bigger businesses. Of those surveyed, 42% considered restaurants the biggest culprits of food loss, followed by grocery stores at 16% and food manufacturers at 14%. 

In addition to the continued erosion of the public's trust, the financial costs are high. Nonprofit ReFED reported U.S. manufacturers lose $2 billion a year because of the issue, while costing consumer-facing businesses $57 billion.

These losses, coupled with greater public demand for more sustainable goods, has propelled food and beverage creations like Toast Ale brewed with surplus fresh bread and Forager Project chips made with leftover juice pulp. It's also moved food waste to the forefront as consumers and businesses alike try to alleviate the problem. 

One of the largest calls to action comes from the U.S. Environmental Protection Agency with its Food Recovery Challenge. The program asks businesses to pledge to reduce food waste by 50% by 2030. There are more than 1,100 participants, including big names such as Campbell Soup, Nestlé, PepsiCo, Kellogg, Kroger, Ahold Delhaize and Yum Brands.

Upcycling startups, on the other hand, aren't looking to reduce their own waste, but to optimize what is already out there.

"When you upcycle what's already grown, you don't have to grow more crops. You don't need to acquire more land, consume more water," Aleh Manchuliantsau, founder and CEO of Planetarians, said during another IFT panel.

Entrepreneurs on the IFT expo floor were eager to talk about the complex work their food scientists have conducted to get their products ready for public consumption.

Comet Bio, for instance, uses farm leftovers to make dextrose by separating cellulose and going through enzymatic treatment, CEO Rich Troyer told Food Dive. The end product can be used in baked goods and beverages. Renmatix dissolves maple fiber using water to make a plant-based egg replacement. 

These companies have spent years trying to hone and patent their work — and they're passionate, to say the least. So how can startups scale up their solutions?

"These behemoths, they [in] one year, two years, three years ... develop a new product. How can we make it faster?" Manchuliantsau said in an interview with Food Dive on the sidelines of the IFT conference.

The answer — and hope — for many is to partner with one of these "behemoths" looking to innovate around the food waste problem.

Scaling up to make tectonic changes

Planetarians, a CPG company turned ingredients maker, may be one of the closest to reach a national audience. In March 2019, the company closed a $750,000 seed round with investors including Barilla Group, the pasta maker's venture capital arm. Manchuliantsau told Food Dive the protein flour maker has been working with the company since 2018's IFT conference on full-scale R&D trials.

"They specifically told us that if you play with small or medium-sized machines, you still have the questions of scalability," he said. "They decided to build the pilot plan as a full-scale plan." During testing, Barilla has made black pasta, bread, crackers, tortillas and biscuits.

Planetarians also has started similar trials with Mondelez and General Mills, Manchuliantsau said. For Mondelez, Planetarians developed a tan version of its flour to make products with a more natural appearance versus its original black version. Its momentum continued with companies including Kraft Heinz, Kind, PepsiCo, Tyson, Kellogg and Unilever requesting samples.

"We focus on the bigger companies because those big companies they can help make tectonic changes in the food industry," Manchuliantsau said. "We are still very tiny against ADM, Cargill and big ingredients manufacturers. Our advantage is that we upcycle what is already grown. We play in a different league. ... We're better united around each other to expand the system of upcycled ingredients."

Contending with opposing consumer sentiments 

Even if the ingredients hit the national market, will consumers shift to products they don't recognize and are uncertain of how to use versus their trusty all-purpose counterparts like flour and sugar?

"The way the material works and how it's made is different to what is already on the market," Cantero said.  "It's one of the main challenges, showing the user that it's an ingredient that can act in different areas. You have to be open … It's not a one-for-one trade. You have ingredient A, but maybe you can also replace a fraction of B and C." 

That functionality is common among upcycled products. For example, in the majority of cases, Comet Bio's dextrose and fiber products are virtually indistinguishable from its counterparts, except in some baked products, Troyer told Food Dive.

"It spreads less in cookies than it would if you used existing products, which can be easily adjusted for," he said.

Caroline Cotto, COO of Renewal Mill, told Food Dive the company's okara flour, made from a byproduct of soymilk, requires a different percentage of flour in baking as well.

"Everyone thinks the idea [of upcycling] is really cool, but how do you move people to ... actually (use) it when it's an unknown ingredient that they haven't heard of it? They may not be familiar with it on the label," she said.  

And labeling adds an entirely different wrinkle to the issue. Despite the increasing demand for upcycled products, companies must also contend with consumer desire for at least a simple, if not clean, label. Manufacturers often need to take raw materials and process it more to make the upcycled ingredient useable and safe for eating.

Shimek of Mattson acknowledged during a panel that the firm doesn't have data on how consumers reconcile the idea behind upcycled sustainability and processing. Some sources of waste streams, such as pulp from juice processing, will be easier to accept "versus something that is more of a complex isolate or has a more complicated name," he said.

Complicated terms — polarity, biomass, pressurized fluid systems, residue and byproduct — can turn off a consumer.

"Clean label doesn't mean healthy," Cotto argued. While the technology to develop upcycled ingredients may sound overly processed, the products themselves typically are not.

Renewal Mill's flour, for example, is from whole soy with minimal processing. At Renmatix, it's heat and water used to create its fiber. In fact, the company received the U.S. Presidential Green Chemistry Award in 2015 for its clean technology.   

"This is going to come down to creative and effective storytelling. It's cliché, but it's as true as ever," Rachel Cheatham, CEO and founder of nutrition strategy consultancy Foodscape Group, told Food Dive.

The consumer acceptance hurdle can be a tough one. While the Mattson study showed a majority of shoppers wanted to buy more sustainable products, 33% didn't plan to increase their spending. Looks still matter, and according to a recent Harris Poll, 81% said appearance played a somewhat significant role in their purchasing decisions.

"Yes, they want it when you survey them, but when it comes to actual purchase behavior, will they buy it? Even if they bought it, did they eat it?" Cheatham said. "Will the consumer reconcile this desire for better resource use, more sustainable food production, less food waste — whatever language we want to use around that — will they reconcile that up against how they purchase and make decisions on what products appeal to them and why?"

She said it's incumbent upon individual brands to tailor their messaging to help their target consumer understand the offering.

Cotto agreed. "It requires a lot of consumer education," she said.

This is why Renewal Mill created a cookie for purchase at convenience stores and other food retailers to show people that even with upcycled okara flour, it still tastes like other chocolate chip cookies. It also helps the company gather data to show bigger CPG companies that consumer demand is there if its sales are growing. 

Education, however, isn't just about the product but also about the cost because many shoppers think it should be cheaper — the products, in their minds, are leftovers and waste. But in reality, going green is expensive. Demand is growing, but not at a fast enough pace to bring down the prices of eco-friendly items. In fact, the average American can't afford the price of being sustainable, according to Bloomberg's interview with venture capitalist Christine Lu.

"[Consumers] think it should be all but free," Cheatham said. "Of course, that's not the case at all when you're talking about a food-grade ready ingredient and developing a supply chain that does not exist at all right now. It's actually quite expensive. Trying to figure on a consumer level, not just the authentic story, but is the value there? How much will someone pay for a product that took the product team effort to source the ingredient because of the upcycled nature of it?"

But for many in the upcycled space — entrepreneurs and manufacturers alike — it's about more than money. "Beyond just profit, there's a bigger bottom line. How can we help the planet, help the people," Shimek said.

Article top image credit: Planetarians

Food manufacturers take commodities harvested on millions of acres around the world and put them into the products they sell. Now, a growing number of companies are looking to give back to the land through regenerative agriculture in an effort to meet consumer demand for more environmentally friendly practices. 

General Mills recently partnered with farmers and suppliers to implement these sustainable practices on 1 million acres of soil for oats, wheat, corn, dairy feed and sugar beets by 2030. 

The announcement comes as shoppers care about sustainability now more than ever, according to a survey from Nielsen. Nearly half of U.S. consumers are likely to change what they buy depending on the level of the brand's commitment to the environment. The growth is unlikely to abate anytime soon, with the data analytics firm predicting people will spend up to $150 billion on sustainable products by 2021.

"It's a big deal for food companies because we make food that relies on agriculture. So when we think about what we need to be doing, and the fact that so much of the landscape is actually being degraded right now, it's an opportunity to do it differently," Shauna Sadowski, head of sustainability for natural and organics at General Mills, told Food Dive. "And that's what regenerative agriculture is about. It's about looking at how we not only do more with less or do less bad, but to actually restore and regenerate."

General Mills isn't the first or the only company with this idea. Scores of well-known food companies, such as Hormel Foods and Danone North America​, are promising to focus on more sustainable practices by committing finances and acreage to regenerative agriculture.  

This method of farming, which is designed to protect natural resources by capturing carbon from the air and storing it in the soil, comes amid predictions over the negative impact that climate change will have on the global food supply.

"We need to be thinking bigger when we think about the footprint of agriculture," Sadowski said. "It's great to see food companies engaging across the board because we need everyone."

Food executives said practices such as regenerative agriculture both restore the consumer's faith in brands while helping restore the ground. At the same time, critics of these pledges said they mostly appeal to consumers on a surface level and don't do enough to really make a difference. 

Pledging money and land

Along with the promise of land, General Mills is pledging $650,000 to Kiss the Ground — a nonprofit organization advocating for environmental practices — to educate farmers on making the land more resilient to inclement conditions, increasing profits and lowering costs with soil health methods.

"Efforts to improve soil health and enrich biodiversity are critical to addressing climate change and other environmental challenges," Larry Clemens, director of The Nature Conservancy's North America agriculture program, said in a statement when the goal was announced in March 2019.

General Mills piloted its regenerative agricultural initiatives with farmers. Sadowski said the regenerative agricultural movement is being led by farmers, and using them to spread the word can be a catalyst to expedite adoption of the practice across the food industry.

But other companies have given lump sums to the cause already. In 2018, milk and yogurt producer Danone North America committed up to $6 million for regenerative agriculture and soil health research.

In early 2019, Deanna Bratter, senior director of public benefit and sustainable development at Danone North America, told Food Dive the company had just finished its first year of on-ground, on-farm programs on more than 26,000 acres. The manufacturer of Silk, Oikos and Activia is planning to double that amount in the next few years.  

"This movement around regenerative agriculture is one of the first big efforts to actually not just reduce the emissions we're creating, but to draw down emissions that already exist," Bratter said. "I think it's incredibly powerful as a sustainability professional and as a company focused on sustainability that we're now implementing solutions not just to do less bad, but to really transform the trajectory that we're on when it comes to climate change."

Measuring the goals

As companies make big pledges, there is some concern over whether enough is being done to hold them accountable and track the progress of these commitments. Environmental groups and analysts claim they often are just marketing tactics used to attract consumers.

"Food industry pledges are not unlike a toy surprise. There is one in every box, but they always disappoint," Scott Faber, senior vice president for government affairs at the Environmental Working Group, told Food Dive.

Faber said pledges, such as the one General Mills is making, are not based on a verifiable standard. He said it is important that claims like this have third parties verifying these promises. A commitment from one company could push others to make the same unverifiable claims to get ahead. The result, Faber said, is "a plethora of meaningless and downright confusing claims flooding the market place."

"We are living in a period where consumers are more and more making food choices based upon the extent to which their food choices impact the fate of the planet," Faber said. "When companies make bogus claims about the environmental benefits of their products they are robbing consumers of the ability to make choices that benefit the planet."

A recent white paper from the Rodale Institute found developing tests to measure carbon sequestration is the best chance for quantitatively showing the amount of regenerative agriculture needed to actually help the climate. The trials will find the best ideas and offer support networks for farmers who are already working on regenerative models.

"With the use of cover crops, compost, crop rotation and reduced tillage, we can actually sequester more carbon than is currently emitted, tipping the needle past 100% to reverse climate change," Mark Smallwood, executive director of Rodale Institute, said in the report.

When it comes to how General Mills is going to be tracking its goal, Sadowski said the company is working with scientists and leveraging Cornell University's comprehensive assessment of soil health — a protocol which includes looking at factors of stability in the soil and organic carbon. Her company is developing tools to measure the progress of biodiversity and the economic resilience in rural communities so that they can show farmers and consumers that they are making a difference with the method. 

"We are looking at actual measurements because at the end of the day, the biggest question is: What are you doing? Are you making an impact?" she said. "We want to focus on outcomes."

For her part, Bratter said Danone North America is working with several entities, including universities and scientists, who help the company measure the quality of the soil and gauge improvements coming from its practices over time.

"When we're talking about climate change, if we don't act, it could have impacts to our supply," she said. "We know that the more we can do to create resiliency within our supply chain, the more successful our farmer partners will be."

Pressure from climate change

In recent years, sustainability pledges and business practices that help the environment have become necessary for companies to appeal to shoppers.

"Consumers are looking to support companies whose values match their own," Bratter said. "We definitely want to showcase that." 

Shoppers have shown they care about sustainability more than ever before, and companies are adapting to that by calling for stronger climate policies and even developing new packaging, like edible and biodegradable film, that is more eco-friendly. 

"Food is the mother of all sustainability challenges," Janet Ranganathan, the vice president for science and research at the World Resources Institute, previously told Food Dive. "We have to change how we produce and consume food, not just for environmental reasons, but because this is an existential issue for humans."

Recognizing that companies will need to follow through on the sustainable pledges, a variety of practices have come to light, from sustainable packaging and renewable energy to water conservation and farming practices. The latest method popping up seems to be regenerative agriculture. 

But Milt McGiffen, agronomy and plant physiology professor and researcher at the University of California, Riverside, told Food Dive this practice isn't new in farming. 

Hormel Foods' Applegate brand launched a line of pork sausages from small farms that use regenerative agricultural practices. John Ghingo, president of Applegate, told Food Dive this product is its first foray into regenerative agriculture with more expected in the future.  

Ghingo said consumers are looking for solutions that address a lot of their concerns, including their health, what they're putting into their bodies and the impact they are having on the food system around the world.

"For us as a brand that wants to be on the front edge of the industry, a very progressive and innovative force in the meat industry, we're definitely looking at environmental impacts, how we can be more sustainable, more regenerative and push in that direction," he said.

Article top image credit: Flickr

When it comes to making beer, few things matter more than ingredients. At Anheuser-Busch, the U.S. division of the world's largest brewer AB InBev, changes in what consumers look for in their beverages and a more volatile climate, have forced the company to change how it goes about purchasing ingredients now and laying a foundation for new ones well into the future.

"Just from the brewing side of the brewmaster's standpoint, understanding where your ingredients come from is an important part of our job," Travis Moore, head of North America brewing for Anheuser-Busch, told Food Dive. "Because we can't make really great beer without having really great ingredients."

The beer giant, known for popular brews such as Bud Light, Budweiser and Michelob Ultra, routinely tests ingredients before they go into the product. It is also investing millions of dollars to find the next rice, hops or barley varieties, such as versions that can be made using less water or are more resistant to challenges such as drought or diseases.

Working closely with farmers

Anheuser-Busch works closely with more than 1,000 U.S. barley, rice, and hops farmers — some of whom the company has partnered with for several generations — to make sure the crops are grown using its exact specifications. Once the company provides farmers with crop protocols, it keeps in close contact with producers to offer insight, guidance and help them adjust to conditions like temperature or precipitation to meet these specifications.

Jess Newman, senior director of agriculture procurement and sustainability at Anheuser-Busch, has a 15-member team of agronomists stationed in regions where the commodities are grown — employees are based in Idaho, Montana, North Dakota and Minnesota for barley; a hops agronomist in Washington state and another agronomist in Missouri to support rice farmers. 

Newman said Anheuser-Busch is vertically integrated into agriculture, owning malt plants, hop farms and rice mills. This gives the company a higher degree of control over ingredient quality, which is critical to beer production.

"Even though we've contracted with them to grow certain varieties with us, we don't actually accept them or say we want to use them until one of our brewmasters and one of the folks on the agronomy team gets to actually evaluate them and rub them, smell them and inspect them," Moore said. "So we do that for every single lot of hops that we use in our process so we don't by chance get a bad hop variety."

The quality check continues away from the farm, too. In St. Louis on an early December afternoon, rice and barley removed directly from railcars sitting on Anheuser-Busch's property are sampled by the brewmaster before a decision is made whether to unload and use them.

In addition to hops, barley and rice, the beer company is heavily dependent on two other ingredients to make its beers: its own proprietary yeast and locally sourced water. In St. Louis, Anheuser-Busch has a partnership with the city and a water treatment facility where it takes the liquid and filters it on its own a few more times before brewing. The water also is tasted and checked by those who oversee brewing before it’s used to make beer or clean out their equipment.

St. Louis also plays a role in yeast distribution: Anheuser-Busch ships from its headquarters more than 300 different yeast strains to brewers around the world — each beer requires a different variety depending on what kind it is, such as an IPA, stout or hefeweizen.

Newman, whose team is responsible for procuring ingredients from farmers, said having a close relationship with growers and maintaining as much oversight of the entire process as possible is crucial. Not only does the company need the right quality, but Anheuser-Busch must ensure it has the right amount.

In addition, Newman said because crops grown for beer are more niche, the company needs to make sure producers are getting a competitive price and receiving the technical support they need to keep raising them. 

Betting big on research for long-term payout

A key part of Anheuser-Busch's ingredients strategy includes investing in research for new varieties that may not pay off for several years. At the company's Fort Collins, Colorado, facility, agronomists are naturally breeding barley varieties that factor things such as stress from drought, shortening the growing cycle of the plant or reducing the need for inputs like water or fertilizer. As organic becomes more coveted by the consumer, researchers are devoting more attention to that too.

"Why do we breed our own barley varieties? Because barley is niche, right? It's not exciting enough because of its market size for independent breeders to be interested," Newman said. "There is a void of others who are interested in these crops and that makes sense for us in the U.S. because barley's really only used in brewing beer."

Once Anheuser-Busch develops a barley variety that it wants to use, the company conducts crop management trials where it grows the commodity for at least three years. During that time, Anheuser-Busch is designing a protocol to help its growers know exactly how to raise the crop, such as how to apply nutrients and irrigate. Those guidelines are given to farmers when they come and pick up their seeds. 

"These are not short-term business cycle decisions," Newman said. "We definitely have to think about the long-term because that's how agriculture works." 

Beyond its own walls, Anheuser-Busch has turned to partnerships with land grant schools such as the University of Idaho and Montana State University. The relationship has already paid off, leading to the development of a system that delivers water to plants closer to the ground.

"It sounds really simple, but makes a massive difference," Newman said.

The technology, called Low Elevation Sprinkler Application, or LESA, can curtail water use by up to 30% as more of it gets into the ground rather than getting blown away or landing on the leaves of the plant. It also reduces the risk of a disease forming and can curtail energy use in operations where groundwater pumps are in place. 

These advantages have proven attractive for farmers, with some producers initially willing to pay half of the money to install the system with Anheuser-Busch cost-sharing the rest. Increasingly, more farmers are installing the technology on their own as their old irrigation systems age out. 

Navigating 'feast or famine' years

The research from CPG companies such as Anheuser-Busch has become increasingly important as climate change impacts growing conditions. Newman said the biggest impact on its supply chain has been less about warming temperatures and more about greater variability in precipitation. She said the "feast or famine years" for precipitation is the biggest challenge for the company when it comes to sourcing ingredients and controlling sprout in small grains like barley.

"It stresses our procurement, because it stressed our partners (that grow the crops), many of which we've worked with for many generations, she said.

In 2019, barley growers in North Dakota and Minnesota had to delay spring plantings because conditions were too wet, but then rain came around harvest time, causing germination, mold and blight to appear in some areas. With the volatility in rain, breeders at the company are developing barley varieties that are less vulnerable to sprouting or diseases that can happen during harvest. The varieties could be grown commercially within three years, Newman said.

Work is currently being done to breed barley with a shorter growing cycle to reduce the risk of sprout events from late-season rain. Anheuser-Busch also is looking into ways for the brewer to use "slightly out of spec ingredients ... without ever compromising the quality of our beer."

"We're committed to the growing regions where we operate. So, then it becomes a question of, okay, what can we do to lessen this problem?" Newman said.

Anheuser-Busch is working with Indigo Ag to pilot a program with rice suppliers in Arkansas that would require the commodity to be grown with 10% less water, carbon and nitrogen emissions compared to county averages. In exchange, the farmer receives a premium for their crops to cover the risk of trying new practices. Other commodities are being considered for similar environmental specifications in the future.

Craft beers spur ingredients innovation

The environment is not the only factor influencing how commodities are grown. Changes in what consumers look for in their beers plays a large role in how Anheuser-Busch sources its ingredients. The popularity of craft beers — there were 7,346 makers of the specialty brews in 2018 compared to 3,814 just four years earlier, according to the Brewers Association — has spurred brewers to look for new versions of ingredients to get their product to stand out.

While Anheuser-Busch is best known for its iconic brews, it is gradually expanding its craft presence in recent years through the purchase of brands such as Goose Island Beer Company, Devils Backbone, Wicked Weed Brewing, Karbach Brewing and Platform Beer.

"The more choices we give them (when it comes to ingredients), the more the craft brewery can really flourish and push boundaries," Newman said.

Today, Anheuser-Busch purchases up to 30 varieties of hops, many of them in smaller volumes, for its craft partners to use and experiment with — an increase from roughly 10 a few years back. The introduction of organic beers, which includes large brews such as Michelob Ultra Pure Gold, also has prompted the company to explore ways to expand how much of the specialty ingredient it has at its disposal.

To encourage more barley growers in Idaho to switch their conventional crops to organic — a process that can take three years — the company launched Contract for Change, a long-term contract with farmers to provide transitional and organic premiums during the change. The program also provides technical support to these farmers during this transition period.

“A big part of the innovation process is ensuring that what ingredients you plan to use are going to be able to scale with the demand growth of that product," Moore said. "You wouldn’t set out and develop a product that uses something that is not scalable ... You have to take the approach of don’t fall in love with something you can’t have.”

Article top image credit: Anheuser-Busch

Going green can come with a major price tag for companies, but McCormick's sustainability leader said the spice maker can deliver top tier financial performance while meeting its sustainability goals by 2025. 

"We believe that our consumers are expecting us to really bring this platform of sustainability into the business," Michael Okoroafor, McCormick's VP of global sustainability and packaging innovation, told Food Dive. "We think it is important for businesses, especially key business leaders, to step up in this area. Being the leader in herbs and spices, we feel an obligation to do this. It is about doing the right thing, and it's about doing well by doing good." 

In 2017, McCormick pledged that by 2025, the spice company would reduce emissions 20%, lower solid waste by 80% and drop its carbon footprint from packaging 25%. It also committed to 100% sustainable sourcing for its five mainstay ingredients: black pepper, red pepper, vanilla, oregano and cinnamon.

But making pledges isn’t enough, reports have shown. In order to build brand loyalty, consumers want to see that companies are delivering on those targets and are transparent to shoppers about their progress. 

McCormick appears to be trying to do just that with the release of its Purpose-led Performance 2019 Progress Report. 

"Building trust and transparency in our entire system, for me and for our company, is paramount," Okoroafor said. "We are confident that, in some cases, we're going to get there ahead of 2025 — make no mistake about it."

So how is the company doing about two years after its initial announcement?

Overall, McCormick's CEO Lawrence Kurzius said in a letter to stakeholders that the report showed "significant progress in sustainably sourcing our key raw materials," but that its efforts are all ongoing.

A closer look at the numbers

According to the report, McCormick has reached 24% sustainable sourcing for black pepper; 0% for cinnamon; 4% for oregano; 60% for red pepper and 60% for vanilla with five years left on the clock. 

To keep it progressing on its sourcing goal, the company announced in January that it created Grown for Good, a sustainable sourcing framework for herbs and spices that includes a new certification standard with traceability​ and quality requirements, as well as farmer and community resilience criteria. 

McCormick is also working with suppliers to remove middlemen, often called collectors, to buy its five main spices directly from farmers, allowing the company to help them get better prices for their goods, Okoroafor said. He hopes these efforts inspire other spice companies to do the same. 

"We hope that we can lead the way," Okoroafor said. "And we hope that others will see the benefit of doing that."

In terms of its other goals, the company has reduced solid waste by 63%, up from 61% in 2018, decreased its carbon footprint from packaging by 8% and dropped greenhouse gas emissions by 1%.

"You don't get there if you don't make the commitment, and we're not telling you to believe what we are saying. Look at the numbers, look at the metrics, look at our audacious commitment," he said. 

Although McCormick still has a lot more work to lower its greenhouse gas emissions, the company reached an agreement with energy company Constellation in September 2019 to buy renewable energy from a solar center being developed in Virginia. The deal is part of Constellation’s largest renewable purchase agreement and will allow McCormick to use renewable energy for its Maryland and New Jersey facilities.

Consumer demand for more alternatives to plastic packaging and recyclable options is also driving some global CPG firms to double down on waste-reduction efforts with their packaging. 

McCormick's 2025 goal is to have 100% circular plastic, and its recent report showed that 84% of its plastic is now recyclable or reusable. 

"By 2025, none of our packaging design will enter landfill. We design it in such a way that you can either recycle it, reuse it or re-purpose it and that is for all plastics," Okoroafor said. "So that's the level of what I call audacious commitment that we're making, which means we are cognizant of the fact that it will require an investment."

The company, however, is not the only one in the ingredients space making sustainability pledges in recent years. About 51% percent of chocolatier Barry Callebaut's raw ingredients are now sustainably sourced, according to its Forever Chocolate progress report. And global spice company Olam launched a program in 2018 to increase the traceability of its spices by showing the full supply chain.

McCormick’s actions in particular though have been recognized. The company was named the world's 22nd most sustainable corporation and No. 1 in the food products industry on the 2020 Global 100 Sustainability Index released by Corporate Knights — a ranking the company has secured before. 

"At McCormick we know that our sustainability journey is never complete," Kurzius said in his letter to shareholders. "While the 2025 goals we’ve set give us important targets to work toward, we know that our sustainability journey is ongoing."

Article top image credit: Christopher Doering

As more consumers search for sustainable packaging options, food and beverage companies are forced to make tough decisions about their products. 

Shoppers and investors are increasingly looking for companies and brands to take the initiative on environmental issues. A Horizon Media study found 81% of millennials expect companies to make public commitments to good corporate citizenship and 66% of consumers will pay more for products from brands committed to environmentally friendly practices, according to the Nielsen Global Corporate Sustainability Report. 

But more eco-friendly practices haven't been easy for the food packaging industry. Designing eco-friendly packaging that can keep products fresh and endure temperature changes that come with cooking can be a challenge. Packaging companies told Food Dive they have made moves to offer sustainable options with water-based ink and more compostable packaging, but have faced obstacles along the way. While some brands are aiming to only appear more sustainable, others are making slow efforts to be eco-friendly with new innovations and products.

For major food and beverage companies, the higher cost of sustainable materials and the struggle to keep food fresh are barriers. Production costs for sustainable options be about 25% more compared to traditional packaging. These materials also tend to be less effective in maintaining freshness, since packaging companies say plastic can have a tighter seal and keep out air better than other materials.

Some companies have found a way around the high costs. Damon Leach, an account representative at Green Rush Packaging, told Food Dive that a solution for some food companies has been to use material that looks recyclable to shoppers, but in reality, is not. 

Instead of paying more for eco-friendly materials, companies have been picking material, like kraft paper, that looks more sustainable to consumers, he added. Leach said the products that appear to be more green do sell better.

"That’s their compromise, it looks eco-friendly — but it's not," Leach said.

Although Leach said more suppliers and consumers theoretically want sustainable packaging, those materials typically don’t have a long shelf life and consumers don't want to pay the extra money. But some companies are still making an effort to pay more for eco-friendly packaging despite the challenges.  

When will sustainable be the norm? 

From producers and companies to retailers, consumers and recycling organizations, packaging can affect the whole supply chain. So the challenge for packaging manufacturers becomes determining what new innovations and materials are the best investments. 

Randall LaVeau, business development manager at Interpress Technologies, which manufactures formed paperboard and plastic food packaging products, told Food Dive there is a huge push for more recycling in the marketplace. But he said it is hard to get an eco-friendly material that holds water but isn't plastic and doesn't degrade — a necessity for microwavable products that need water to cook.

Many companies are now working to develop recyclable packaging that can withstand heat and hold liquids, but LaVeau​ said there is still a lot of research and development to go before it is widespread. 

"Everybody is in the shop trying to figure it out," LaVeau said. "People have been working on it for the last 10 years or longer, they just haven’t had a good success for it." 

For companies that have made sustainability goals, the time is ticking to figure it out. Mondelez announced its plans to make all their packaging recyclable by 2025. Nestlé, Unilever and PepsiCo have agreed to phase in packaging made from recyclable, compostable and biodegradable materials with more recycled content by 2025, but haven't released many specific details about their plans. In fact, a report identified Coca-Cola, PepsiCo and Nestle as businesses contributing most to pollution. 

But as these big companies push for more development on sustainable materials, that means cost could continue to be an obstacle. Although consumers say they are willing to pay more for sustainability, they don't always pick up the more expensive options in stores. 

"Just like anything else, when something new comes out... it is more expensive until they can work with it in time and maximize their efficiencies for the cost to come down," LaVeau said.  

New innovations in sustainable packages

Several companies have developed more sustainable options this year. For example, HelloFresh rolled out more sustainable packaging for its meal kits with recyclable liners created by sustainable design company TemperPack.

And some new developments haven't come into the mainstream yet. U.S. Department of Agriculture researchers have developed an edible, biodegradable packaging film made of casein, a milk protein, that can be wrapped around food to prevent spoilage. 

Other companies are working to find new ways to help the environment. Wayne Shilka, vice president of innovation and technical support at Eagle Flexible Packaging, a printer of packaging in Chicago, has prioritized offering more sustainable options to their customers. Eagle Flexible Packaging uses a water-based ink because it doesn't create any probable organic compounds that then go out into the atmosphere, making it more environmentally friendly, Shilka said. 

"We are finding that sustainable packaging is getting more and more and more interest," Shilka told Food Dive.  

Eagle Flexible Packaging put together a compostable material for packaging, and about 100 companies discussed the option with them. Only one customer ended up using the compostable product because it cost more any other packaging option the company offered. Every year since, a few more customers have worked with them to outfit their products with compostable material, Shilka said.

As more companies turn to compostable and sustainable packaging, the price will come down and make it more appealing, Shilka added. 

"It continues growing to the point that it's becoming not mainstream, but it's much more routine that we had people who are calling and are interested and are actually doing something sustainable," Shilka said. 

'Recyclable to an extent'

While some companies work to find new recyclable materials, others are satisfied with current packaging options. Flexible packaging — which is any package whose shape can be readily changed, such as bags and pouches — is popular. Representatives at packaging companies said flexible packaging can be an issue for sustainability since it has multilayer films with plastic and paper that need to be separated to be recycled. 

LaVeau said most of his products are "recyclable to an extent" because of the layers. Certain recycling mills can handle his products, but at others, consumers need to separate the packaging for recycling — which doesn't always happen.

Green Rush Packaging has the same issue. 

"We got to get the end users to separate and recycle better instead of just facilities otherwise it is just waste, bad for the environment," Leach said. 

Flexible packaging can also provide a higher product-to-package ratio, which creates fewer emissions during transportation and ultimately uses less space in landfills.

Some companies stand by their use of packages that aren't fully sustainable. Robert Reinders, president of Performance Packaging, a family owned corrugated box plant founded in 1995 by packaging professionals, told Food Dive that about 5% of his products are recyclable. He said flexible packaging is a sustainable option because it uses up less energy and prolongs the shelf life of the food so it eliminates food waste. 

"There is all kinds of great benefits to flexible packaging that gets drowned out by the recycle, compostable needs," Reinders said. 

Falling behind other countries' sustainable goals

In two years time, more than 70 bills have been introduced in state legislatures regarding plastic bags — encompassing bans, fees and recycling programs. However, many of those laws have not impacted the food packaging industry. 

In comparison, countries across the globe are increasing their efforts and goals when it comes to sustainability for both food and beverage product packaging. But U.S. companies are still in the development stage on many of their innovations.

The Singapore Packaging Agreement — a joint initiative by government, industry and NGOs to reduce packaging waste — has averted about 46,000 metric tons of packaging waste during the past 11 years as of 2018, according to Eco-Business. In Australia, national, state and territory environment ministers agreed that 100% of Australian packaging will be recyclable, compostable or reusable by 2025. 

Vancouver, Canada has adopted a ban on the distribution of polystyrene foam cups and containers, as well as restrictions on disposable cups and plastic shopping bags. The U.K. also plans to eliminate plastic waste by 2042.

As countries around the world change their packaging to adjust to these sustainability goals, Reinders said U.S. companies will likely adopt more changes. And as more CPG makers start mass producing sustainable options around the world, he said it will drive prices down globally. 

"I was at Nestlé headquarters in Switzerland and they are currently making the efforts to find different materials and different processes so they can be recyclable," Reinders said. "It’s all starting now. The more the big guys get into it, the better it will be."

Article top image credit: Alsco

Packaging is one of the largest causes of waste in the United States. According to the U.S. Environmental Protection Agency, 29.7% of total waste could be attributed to containers and packaging in 2015, which weighed in at 77.9 million tons.

While some may point the finger at plastics, Tim Debus, president and CEO of the Reusable Packaging Association, told Food Dive that “the real root evil of the pollution is not material based. It’s disposability.”

Since the introduction of plastics into the CPG space, explained Debus, manufacturers have opted for more and more single-use packaging for its ability to reduce shipping costs. Single-use plastic packaging is also an option that promotes convenience, something that consumers have progressively wanted more of over the decades.

All of this, however, comes at the expense of sustainability.

Demand for conveniently packaged options continues today, but consumers have increasing sustainability concerns. As a result, retailers and manufacturers have spent years searching for alternatives that reduce the quantity of waste sent to landfills. From minimizing the amount of glass used in each bottle to switching to compostable bioplastic, packaging innovations are nothing new. What is new is the desire to combine sustainability with reusability.

In searching for an innovative method to provide consumers with sustainable yet convenient packaging options, companies including Tyme Fast Food and TerraCycle's Loop program, as well as retailers including PCC Community Markets have reimagined packaging as something reusable rather than disposable.

Reusable containers benefit the planet and companies' bottom lines. The World Economic Forum reports plastic packaging waste represents an annual loss to the global economy of $80 billion to $120 billion. Reusable options not only help alleviate that cost burden, but consumers are also willing to pay more to help solve the sustainability problem. 

A new consumer culture?

A report from Packaged Facts shows households headed by adults younger than 25 are 29% more likely to consume microwaveable dinners and 26% more apt to eat frozen breakfast entrees or sandwiches. Millennials, according to a report by UBS Investment Bank, are expected to drive food delivery sales up from $35 billion in 2018 to $365 billion worldwide in 2030.

Consumers' preference for convenience has generated tons of trash as pre-packaged and delivery options become the norm. At the same time, these consumers don't want to create waste.

To solve this dilemma, companies including Procter & Gamble, Nestlé, PepsiCo, Unilever and The Body Shop have signed onto initiatives that make reusable packaging convenient.

“When you give the average person the choice between the most convenient option and the most sustainable options, more often than not, the more convenient option wins,” Loop’s vice president of global business development Toni Rossi told Food Dive.

Rather than combat human nature and work to convince consumers that a little sacrifice now will pay off in the long run, Loop plays into the consumer search for an "easy" button, Rossi said.

“It’s a model of reusability, but it acts like single use. We’re not asking the consumer to do anything different than they would today,” he said.

Loop is an online delivery service where customers select their products and pay for the order (including a fully-refundable deposit on the reusable jars) and wait for it to be delivered in a reusable tote. Shipping is free after seven items are ordered. When the product is used up, customers replace the jars in the tote and wait for UPS to pick up their used containers and deliver their replacement order. 

Although Loop only began its U.S. pilot program in May, the idea of fusing reusability with convenience has generated wide appeal. The waiting list for the service, which currently serves 5,000 people is the Northeast, is 85,000 people long.

“We’ve made sustainability irresistible,” said Rossi.

Reusable packaging is not just irresistible when it lands on a doorstep. Henry Simonds, the co-founder of Tyme Fast Food, told Food Dive that reusability is all about reframing the conversation around packaging. Simonds asked himself a question when he started the company.

“How do you do (sustainable food delivery) in a way that sort of finds a great alternative that’s not going to sacrifice on food taste and convenience and price, but delivers a product that has a seriously positive impact on people and planet?” Simonds said. 

His answer was to offer plant-based meals in a reusable plastic jar.

Simonds said the intent was to have customers return empty jars to Tyme for sanitization and reuse by the company. Tyme gave $1 off new purchases when customers returned jars, which resulted in an 80% return rate. It quickly became evident the jars were appealing for reuse in other ways. From storing change to packing homemade lunches, Instagram showcases the multitude of uses for Tyme’s lunch jars.

One of the more interesting uses is the transformation of these lunch containers into plant containers. Tyme started this initiative, sending soil and seeds along with some lunch deliveries to encourage creative reuse.

“We were trying to do what we could to make them used to the best of their ability as well,” said Simonds.

Reusability isn’t free

Despite reusable packaging's obvious benefit of keeping tons of garbage out of landfills, there are some challenges associated with creating reusable packages, not the least of which is the expense.

For companies participating in Loop's program, including Procter & Gamble and Nestlé (both founding investors) — along with PepsiCo, Unilever, Mars, Clorox, The Body Shop, Coca-Cola European Partners, Mondelez and Danone, purchasing a new mold to make a custom package from stainless steel can cost anywhere from $250,000 to $500,000, explained Rossi.

That investment, although initially steep, pays off in time. Compared to a disposable plastic container, Loop containers are environmentally neutral after three uses, according to lifecycle research done by the company. After seven uses, the reusable container has 74% less impact on the environment than a disposable one.

Monetarily, the more frequently the containers are used, the lower their cost per use. Although Rossi said that the point at which a Loop container becomes cheaper is different for every manufacturer, Loop containers are viable for approximately 100 uses, so a $3 container would cost three cents per use. A plastic container can cost anywhere from 13 to 30 cents a piece. 

Reaching those economies of scale, however, takes buy-in on the part of companies and consumers — something that Simonds said requires the deep pockets and established infrastructure of CPG titans.

Even for companies with the wherewithal to make the change, switching supply chains and creating a method to receive and sanitize used containers takes commitment.

When it comes to sanitizing containers for reuse, there are many details that need to be met. Ensuring that a container previously filled with nuts is safe to use around someone with a severe allergy required significant attention to cleaning processes, Rossi said. Loop addressed this concern by sanitizing its containers with a similar technology that is used to sterilize medical devices and meets FDA standards.

Simonds also said sanitizing the jars was of paramount concern when Tyme chose to pursue reusable containers for their fast food concept due to cross-contamination potential. Similar to Loop, the fast food company chose to use a sterilization process that meets FDA sanitization standards and wipes allergens clean from the containers. 

Another concern revolves around the packaging that the containers are transported in. Today's grocery shopping experience uses lots of plastic bags and cardboard boxes. However, both containers contribute to the waste problem.

Rossi said designing the bag Loop containers arrive in was one of the top challenges associated with making completely reusable packaging. On one hand, the material needed to be durable and reusable, but on the other, it needed to be collapsible for those who lived in small spaces and didn't want a Loop tote to be a new piece of furniture. The resulting fabric tote is easy to clean and offers enough protection and insulation with its compartmental design. Loop does not need to use any additional packing materials like bubble wrap to protect the reusable jars inside. 

The question of shopping bags was particularly pressing for Seattle's PCC Community Markets. In 2007, the cooperative completely switched to reusable shopping bags. Brenna Davis, the store's vice president of social and environmental responsibility, told Food Dive that 50% of their shoppers use reusable bags today. The store still offers paper bags for those who forget, and also sells cloth totes or durable plastic bags for shoppers starting their reusable bag collection. 

“I think it takes time to get the customer or the shopper in the habit of bringing their reusable bags," she said. However, once the habit is formed, she said it adds to customer experience.

"They want to find ways to have less packaging and less plastic and this is a really easy way to do that," Davis said. "...It makes them part of the solution to our really complex environmental problems.”

Reusable shopping bags are just one piece of the puzzle, although Davis said it's a "key piece." From the deli to the center aisles to products that are received by PCC Markets, plastic abounds, she said. Although Davis explained that removing plastics from the markets will be a long, slow process, the co-op grocery store chain is "actively working" to further reduce plastic in their stores and PCC Markets has committed to removing petroleum-based plastics in its deli by 2022. 

Reusability is not just for consumers

Reusability is more visible on the consumer side. However, Debus said, switching to reusable materials may actually be more impactful for manufacturers.

Exchanging the disposable pallets, boxes and shipping containers coming through factory floors daily would make a significant difference. 

“From a per weight basis that’s where you could really minimize the amount of solid waste that’s being distributed in the supply chain,” Debus said.

Not only would reusable packaging cut down on trash, but it would also help protect the quality of products and streamline the supply chain. This is extremely important for produce like strawberries, said Debus. He explained replacing stacked, corrugated cardboard boxes with durable plastic containers would help prevent crushing the produce and allow for additional airflow to keep the fruit chilled and mold-free. ​

“You can actually build a reusable plastic container that not only has the strength and durability to move perishable cargo through the supply chain and better protect that … but you can actually mold the container to have better ventilation patterns to maximize the airflow,” said Debus.

Getting reusable packaging to become the dominant choice in a company’s supply chain or for consumer packaging will require companies to consider packaging as part of the product and not an afterthought, Debus said. 

Will America ever get on board?

In other parts of the world, reusable packaging is the norm. However, the United States is not especially equipped to encourage reusable packaging, said Angie Slaughter, vice president of sustainability procurement at AB InBev. 

“I think we’re unique in the U.S. that we don’t have the infrastructure, we don’t have the buy-in from the consumer, but I do think that there’s interest,” she told Food Dive.

AB InBev has reusable glass beer bottles and kegs in Canada and is looking at piloting reusable bottles in the U.S. in the future.

In Canada, infrastructure for bottle returns exist and is a thriving industry. With bottle bills that encourage consumers to return bottles to the manufacturer for a monetary reward to the government requiring manufacturers to pay to recycle its packaging (the payment varies from province to province) recycling rates in Canada far outpace those of the United States. Return rates for glass bottles in Canada average about 80%, while the U.S. only offers bottle bills in 10 states.

Simonds said that it's not just policy and infrastructure hindering the development of reusable packaging. There continues to be a hesitation on the part of consumers that limits reusability. The majority of that hesitation comes from the lack of convenience associated with reusability. Once the two competing interests merge, however, Simonds believes that sustainable packaging will become more prevalent.

Without the infrastructure to make returnable and reusable containers easy to circulate through the supply chain and cost presenting a financial barrier to the company being able to provide its own return system, Tyme is reconsidering its packaging as it expands. Going forward as an e-commerce platform, Simonds said that the food will be sent in compostable containers.

Even though the idea is nascent in the U.S., Rossi said that today’s market is starting to exert external motivation onto CPG companies to look into new, more sustainable forms of packaging.

“They’re motivated to do this. They know they need to change," Rossi said. "They have corporate mandates that say they must.”

Although many companies are indeed bound by corporate sustainability pledges, reusable packaging is one of many methods to address sustainability concerns. Debus maintains it is the most logical choice for the company and the environment.

“I’m a believer that the concept has so many advantages to it in customer satisfaction, waste elimination (and) cost savings," he said. "At the end, these ideas will converge and the scale is going to be there. People are going to realize that at the end of the day, this just makes great business sense.”

Article top image credit: Loop

After more than a decade of work intended to rid palm oil supply chains of deforestation, the results don’t match the effort.

Deforestation has increased, despite more monitoring, more certifications, more on-the-ground cooperation and the availability of palm oil certified by the Roundtable on Sustainable Palm Oil for 12 years.

Global land cover decreased from 2000 to 2015, according to The United Nations Sustainable Development Goals Report for 2019. Forest area as a share of total land is still declining, but the rate of decline is slowing, according to the UN. Indonesia, the top global palm oil producer, experienced the third-most forest loss in the world in 2019, according to the World Resources Institute — though it does represent an improvement from previous years.

Companies that depend on ingredients at the center of these stats, namely palm, soy, cattle and wood, have to reckon with the fact that their individual actions to date are not enough to substantially shift the macro trend.

A 'drastic' approach to close the gap

Nestlé and Proctor & Gamble knew in 2019 they would not meet their sustainable palm oil goals in 2020. CDP declared in November 2019 that the Consumer Goods Forum would not meet its goal of zero deforestation in palm oil supply chains by 2020. And Mars was "going through all the right motions" of meeting 100% RSPO standards and mapping its palm mills but without results, Alastair Child, global vice president of sustainability for Mars Wrigley, said via email.

CDP described a "growing gap between companies' ambitions and targets."

Mars' awareness of that gap drove the latest and perhaps most novel approach to reducing the amount of deforestation that occurs in the palm oil supply chain.

In October, Mars pledged to reduce the number of palm oil mills it works with from more than 1,500 to under 100 by the end of 2020, and down to 50 mills by 2022.

"Through our process of simplification, we're focusing on awarding longer-term contracts and building closer partnerships with the suppliers that are remaining in our supply chain," a Mars spokesperson said via email at the time of the announcement.

Cutting suppliers for violating deforestation policies is not new, Daniel Strechay, global director of outreach and engagement for RSPO, said. Hand picking a small list of mills to partner with is.

Mars' move, and others like it that may follow, supports the most advanced, transparent suppliers and eschews the rest. Working with fewer suppliers makes keeping to its strict standards simpler for Mars, but it also means that it holds sway with fewer mills and therefore farms.

"Anytime you pull out ... and there's no longer the option to do business with you, you lose a little bit of leverage to be that driver for positive change," Strechay said. "What you want to do is to stay engaged, or at least for the organization to have the opportunity to source to you in the future," he said of suppliers cut off in streamlining efforts like Mars'.

Mars says it does have a plan to maintain influence in producing regions. 

"We don't stop at our own direct supply chain," Child said.

Mars says it is continuing work with smallholder farmers to transition to sustainable practices and working with local governments, NGOs and other buyers to further local initiatives on the ground in producing countries.

Clarisse Chang, operations manager and senior sustainability analyst at EcoVadis, called the move "drastic," adding that Mars was clearly trying to be a leader in the space. But as Mars is the first major purchaser to streamline its supply chain in this way, the macro outcome is unknown. 

And Diana Ruiz, Greenpeace USA senior palm oil campaigner, is uncertain Mars' move to reduce suppliers will bring large-scale results in the palm oil market.

"Simplifying supply chains for global customers is not going to clean up the commodities trade. It's like trying to fix a leaky faucet in a burning building," Ruiz said in a statement reacting to the news in October. The way to bring about change, according to Ruiz, is to source only from "clean" suppliers and reduce overall buying volume. 

The scale of Mars' palm oil purchasing will remain the same as it reduces mills in its network. Mars is roughly the 22nd largest purchaser of palm oil in the world, according to the World Wildlife Fund. 

The road to fewer suppliers

Mars' "radical simplification" strategy, as Child called it, is the result of two years of thought, following the realization the company needed to take a clean-slate approach to palm oil.  

"It became clear that buying anonymous commodities through complex supply chains with a sole reliance on certification would not suffice to effectively address deforestation," Child said. 

The suppliers Mars sticks with will be those "who can commit to Mars' environmental, social and ethical expectations, and commit to driving positive improvements throughout their extended supply chains — and they must have the infrastructure and capacity to do so," he said. 

Mills that can provide full transparency into their own tiers and facilitate Mars' methods of mapping and monitoring will stay. Those that can meet these standards will be rewarded with long-term contracts, according to the company.

"We talk about vendor consolidation a lot," said Jessica Kirshenblat-Gooderham, customer success team leader for sustainable procurement at EcoVadis. It's a tactic across sustainability and ethical supply goals to make complex supply chains easier to manage.

With a short list of approved suppliers, Mars is confident it will have a deforestation-free supply chain long-term. 

Shifts in the palm oil supply base

The status afforded to the suppliers of a major global palm sourcing organization is a powerful force in the field, said Strechay.

"People want to work with the best of the best. And they want to work with large organizations that have footprints across the globe, because other organizations see them, working with them doing business with them, and that helps them reputationally," he said.

Suppliers who make Mars' elite list will likely gain status, and business, because of it.  

But what about the hundreds of suppliers it will no longer purchase from? How would moves like Mars' at greater scale affect palm-producing regions and the remainder of the overall palm oil supply?

"Radical simplification" could also leave hundreds of suppliers without ample reason to improve if the practice spreads to other sourcing organizations.

"There's two sides of the coin. Do you continue to engage with other suppliers and try to get them up to your standards, while you have leverage? Or do you work from outside?" Strechay asked.

A similar but less dramatic shift at work among other palm oil buyers may offer some context. Some deforestation-conscious brands are slowly moving away from what’s called "mass balance" purchasing to a segregated deforestation-free supply.

Mass balance is the term used when deforestation-free palm oil is physically mixed with conventional palm oil. The sellers know the percentage of each type but mix them together and charge a rate based on the percentage. When deforestation-free palm oil is kept physically separate from conventional and processed in certified mills, it's called segregated supply.

Mass balance purchasing, intended to make space for infrastructure development, can allow a brand to display certifications to the consumer without converting to 100% segregated supply. "There’s good evidence … that smallholders rely on the mass balance supply chain," said Strechay.

The suppliers of segregated palm oil tend to have more mature businesses than those participating in the mass balance markets. It could be concluded that the market is moving away from the most vulnerable farmers, but Strechay said this isn't the case, yet.

"I wouldn't call it disruptive at this point, because we do have an abundance of material that's going unsold as certified sustainable palm oil. So we actually have a need for greater uptake," he said of the segregated supply chains. "I'm not worried about that just yet. I think that would be a good problem for us to have."

Article top image credit: Permission granted by Mars