As you know, one of the many issues I blog about here at PMA is sustainability, ranging from new surveys or reports to member sustainability stories. Recently while getting caught up on a short stack of industry magazines, I read Progressive Grocer’s 2013 Sustainability Handbook and came across some interesting statistics and trends that may be of interest:

• The Food Marketing Institute’s 2012 U.S. Grocery Shopper Trends Report found that almost one-third of consumers said products’ environmental sustainability impacts their shopping decisions. More than one-fifth said they consider retailers’ corporate sustainability practices when making purchasing decisions.
• Ninety-two percent of college graduates say they want to eventually work for a sustainable company.
• An Ipsos InnoQuest global survey found consumers are likely to pay more for value-added features that relate to freshness and sustainability in food packaging. Leading these features are “keeps food fresher longer” (55 percent), environmentally friendly packaging (55 percent), reusable packaging (42 percent), and easier-to-use packaging (39 percent).

The handbook also cited a report I mentioned a few months ago: A.T. Kearney’s Buying into the Local Food Movement. This study found consumers embrace local food options because they think doing so helps local economies (66 percent), delivers a broader and better assortment of products (60 percent), and provides healthier alternatives (45 percent). It also recommended that, in order for larger grocers to convince customers to purchase local food, these operators must prove they can offer products of equal or greater quality than standard products, as well as ensure that local products are given adequate shelf space and location.

With regard to the findings from the Ipsos InnoQuest survey, I’m reminded of what we found in our own of consumer packaging preferences toward fresh produce: eco-friendly packaging is important to just fewer than 40 percent of consumers. Our report also recommended that produce companies appeal to the “green” consumer by ensuring that packaging include any relevant information about the packaging or symbols that indicate recyclability (many consumers expressed confusion as to where to locate this information on existing packaging).

To learn more about this resource, visit our packaging study page to view the report and video Podcasts.

What do you think about these trends? Share your thoughts with us in the Sustainability Community on PMA Xchange.

A couple of weeks ago, I attended the Consumer Federation of America’s 2013 Food Policy Conference. I’ve attended this meeting before and always came away with some valuable information and insights to share with colleagues and members. This year’s program addressed a number of key issues ranging from the Food Safety Modernization Act (FSMA), food waste, immigration reform, and nutrition topics. Here’s a recap of what I heard and learned:

• On FSMA, FDA’s Deputy Commissioner for Foods and Veterinary Medicine Mike Taylor shared his thoughts on FSMA implementation with Food Safety News’ Helena Bottemiller. They discussed a variety of areas including the reworking of produce exemptions (FDA seeking industry comment on these), resource constraints (FDA considering fees to fill funding gaps, though industry is opposed to this tactic), and OMB deletions of environmental and product testing from the proposed rules (FDA seeks expertise on these issues and anticipates them being in the final rules).
• On nutrition labeling, Taylor said final menu labeling rules should be published by the end of the year, while front-of-the-pack labeling rules are being considered by the agency along with a proposed rule to update the Nutrition Facts label (expected in 2014).
• With regard to consumer trends, Kate Weigle from Edelman shared that 79 percent of consumers said their budget reflects their food purchasing decisions; 68 percent believe healthful foods are too expensive. Also, 95 percent of men and 98 percent of women think about the nutrients meals provide their family. Seventy-two percent of men and 73 percent of women try to purchase food raised or grown locally.
• On kids and branded food items, a representative from the Rudd Center at Yale University said that the effect of a licensed character on food does have an impact. Their child research revealed that kids think branded food tastes better (even though it was the exact same as non-branded food).
• Concerning food waste, an Environmental Protection Agency representative discussed the agency’s Food Recovery Hierarchy, with a focus on the top two tiers (source reduction and donation). The Food Marketing Institute shared that consumer misunderstanding of sell-by/use-by dates is a key contributing factor to food waste, followed by the Natural Resources Defense Council stating that, in the United Kingdom, one retailer is printing storage and handling information on their produce department bags.
• The immigration session was interesting (especially in light of what was happening on Capitol Hill that day). Call me biased, but the standout panelist was Maureen Torrey of Torrey Farms. Her emotional story of dealing with farm labor issues and I-9 audits and enforcement measures held the audience’s attention until she had finished – which was met with a well-deserved round of applause.

In all, it was a very informative meeting and if you’d like additional information on any of the items above, please feel free to connect with me on PMA Xchange.

Last March I shared with you findings from the 2012 Retail Sustainability Report, published by the Retail Industry Leaders Association (which represents retailers in various consumer goods’ sectors). In last year’s study, the RILA noted the emergence of four key industry trends: working across sectors to achieve sustainability goals; turning from sustainability as a cost and risk reduction measure to an opportunity for business growth; developing systems for continuous improvement; and fostering transparency in operations and in the supply chain.

Recently RILA issued the 2013 Retail Sustainability Report, which examined sustainability management; investing and benefiting; prioritizing and planning; measuring and reporting; building operations; supply chain operations; and shareholder engagement. Key highlights from these areas are:

• Most companies have full-time sustainability teams. Teams are growing, and reporting levels are gaining seniority. These teams mainly use their time to orchestrate internal efforts and develop strategies, and the sustainability team either manages or has strong alignment with both the environmental regulatory compliance and social compliance functions.
• Most companies act on sustainability investments that they expect to generate a two- to three-year payback, with the primary benefits of sustainability as reduced costs, brand enhancement, and risk management – as well as the management of reputational risks and energy/fuel price risks.
• The typical planning horizon for sustainability strategies is five years.
• More than 25 percent more retailers will begin to measure code of conduct compliance, water usage, suppliers audited for social compliance, renewable energy generation, and chemicals of concern over the next two years.
• Waste and energy reduction are the top facility-related improvements retailers are undertaking, with green-building practices and management of greenhouse gas emissions and water use will grow significantly over the next two years.
• Supply chain improvements have focused on transportation, materials including chemicals of concern, and packaging design. Managing all aspects of the product life cycle, from design through use and disposal will become increasingly prevalent practices over the next two years.
• Pressure for retail sustainability efforts is strongest from employees, competitors, and regulators. Companies can educate consumers through a variety of channels.

The report also addressed the storytelling aspect of sustainability and how this can engage stakeholders as well as consumers. PMA has been encouraging members to share their sustainability stories with us and publishing them via social media and other outlets.

If you’ve got a story to share, please let me know. We highlight these items here on the blog, the PMA website, and in the Sustainability Community on PMA Xchange.

Recently I read several trade press articles about CF Fresh’s solar initiative, which consists of more than 100 solar panels and four inverters on the roof of their office building in Sedro-Woolley, Washington. Intrigued by this, I reached out to Steve Mackey, executive vice president and chief financial officer of CF Fresh, to learn more about how this conservation effort came to be and how it is paying dividends.

The impetus for the solar project came to Steve a few years ago after seeing solar panel systems on display at the Seattle Home Show. After listening to presentations on these systems, he began analyzing the viability of producing electricity from solar for CF Fresh. In this process, he sought answers to some key financial considerations:

• Would a solar installation add to the value of the building? After consulting some contacts in real estate, he learned that a “rule of thumb” value for solar panel systems was $20 for every $1 of energy saved, and since solar installers generally rate the systems they market by kilowatt hours (KWH) generated, the estimated increased value of the building was easy to calculate.
• Would the local utility allow them to install a grid-tied system? CF Fresh was allowed to run its electric meter backwards and sell excess electricity back into the grid (a practice known as net metering), thereby eliminating any issue with what to do with more electricity than CF Fresh could utilize from its 130 solar panels.
• Was there any government support available? CF Fresh used an available federal tax credit available to reduce the project’s cost by 30 percent. In addition, all equipment purchased for solar installations are exempt from Washington’s state sales tax. When Steve evaluated the project, there was a State Production Credit for electricity; he estimated that CF Fresh would qualify for the maximum incentive allowed.
• How would depreciation be handled? As a business, CF Fresh was allowed to depreciate the cost of the solar array installation and this was factored in when determining a payback period.

Steve also shared that he estimated a present value cost recovery of less than 10 years - if the cost of electricity did not increase. He told me that the cost of electricity has increased by more than 30 percent to 9.8 cents per KWH since those initial calculations were completed. Subsequently, their incentive check from the state has more than doubled. CF Fresh has already recovered the cost of the project after just five years.

What are you doing in the sustainability arena? Let us know and, in the meantime, you can read other PMA members’ sustainability stories by visiting our website. We also have a Sustainability Community on PMA Xchange.

Last week in a Field to Fork post, I offered information on sustainability claims and how the U.S. Federal Trade Commission (FTC) looks at them. As part of an FTC staff attorney’s presentation I attended, she also discussed certifications, logos, and seals related to sustainability or “green” marketing. She noted that use of these is huge in the marketplace, and FTC’s Green Guides have a section devoted to certifications and seals of approval.

She noted that virtually all products impact the environment. Because the seal or logo may not provide enough information on the packaging or marketing materials, a marketer may provide backup elsewhere. One example she gave was: “For details on which attributes we evaluated, go to [website discussing product].”

If you have a seal of approval, consumers will see that as an endorsement, and they likely will think an independent third party checked out and “passed” your product. It’s important to check the endorsements section of the guide to be sure you understand how best to convey the information so that consumers understand what the seal means and what it does not mean. Even with a certification, you will have to substantiate the claims (direct or implied). And you will want to make a clear and prominent qualification that refers only to specific, limited, environmental benefit.

Consumers are interested in a variety of sustainability topics, and you can get information on that through PMA consumer trends research. Because they are interested, it’s important that you tell your sustainability story. We’re interested as well. We tell members’ stories to inspire other members to move forward on sustainability and to have a central location for media and others to see the strides produce marketers are making in sustainability. So let us know what you’re up to. We’re also talking about sustainability on PMA Xchange.

Here at Field to Fork, we often call out members’ sustainability stories and urge you to send yours in to us. I was recently at a meeting of sustainability staff from various associations, and we heard from a staff attorney from the U.S. Federal Trade Commission (FTC). The FTC’s mission, as you likely know, is “to prevent business practices that are anticompetitive or deceptive or unfair to consumers; to enhance informed consumer choice and public understanding of the competitive process; and to accomplish this without unduly burdening legitimate business activity.”

During the meeting the attorney reviewed FTC’s Green Guides, which “are designed to help marketers ensure that the claims they make about the environmental attributes of their products are truthful and non-deceptive.” One of her key messages was that FTC looks at claims as the consumer would, and it is how the consumer perceives the claim that matters. She said that marketers must tell the truth and be able to substantiate all express and implied claims. Even if a marketer is using the scientific or technical term or has phrased a claim in a way that makes sense to them, it still may not pass muster if that is not how a reasonable consumers perceives the claim. The Green Guides can help marketers comply.

She said the basics cover how consumers, not the marketers, understand claims. All forms of marketing are covered, B2C as well as B2B. And the claim may be direct or implied in a variety of places: online, on packaging, signs, brochures, even materials used at a trade show. She offered general principles about making these claims:

• Consumer perception controls.
• Be specific: This is the most important. If your claim is not clear you are responsible for consumer interpretations – whether you intended them or not.
• Don’t overstate attributes.
• On comparative claims: Be clear about the basis for a comparison (e.g. be specific about whether “improved recycled content” in your product is in relation to your previous product or to someone else’s product).
• Use clear, prominent qualifications when needed to limit the claim (not small on the back of a package, not on the internet). Make them understandable: Use plain language, sufficiently large type, close proximity to the qualified claim.

It’s important that marketers promote the sustainable qualities of their products. It’s equally important to do so in ways that clearly and specifically communicate to consumers.

According to A.T. Kearney’s Buying into the Local Food Movement study, local food is a much more important consideration than organic food, with consumers embracing local food options because they think doing so helps local economies (66 percent), delivers a broader and better assortment of products (60 percent), and provides healthier alternatives (45 percent).

In terms of retail implications, almost 30 percent of grocery shoppers would consider purchasing food elsewhere if their preferred store does not carry local foods. When asked about the trustworthiness of different formats to deliver local food, farmers markets and farm stores rank first, followed by natural food markets, local food markets, national supermarkets and big box retailers.

With regard to sustainability, when asked if they believe organic and local food contribute positively to sustainability, 68 percent of respondents said that local food contributes positively, while only 50 percent believe organic foods contribute. A.T. Kearney suggests the implication is that environmentally conscious consumers will seek out local food more actively than organic food.

The study also found that across all income segments, consumers indicated that they were willing to pay a premium for local food: 70 percent of consumers were willing to pay more.

You can download the report for free here. What do you think about this study? Share your thoughts with us in the Increasing Consumption Community on PMA Xchange.

According to findings from EcoFocus’ most recent consumer survey (which was highlighted in the October issue of Progressive Grocer magazine), most consumers said they are making eco-friendly choices “at least some times.” Eighty-six percent of U.S. adults are receptive to eco-friendly choices, with foods eaten at home at the top of their green shopping lists. The top three eco-actions for shoppers are:

• 67 percent said they want to limit the amount of garbage their household produces
• 65 percent said they want to choose foods or beverages that are packaged responsibly
• 62 percent said they want to use less plastic

Shoppers also indicated what they’d like retailers to do – especially when it comes to helping them make eco-friendly choices. Forty-eight percent want their retailer to screen products to ensure they are environmentally friendly, and 47 percent want their retailer to offer information on recycling and other practices.

While this study didn’t address fresh produce, I am reminded of what PMA’s study of consumer attitudes on packaging told us. More than half said they look for the packaging they buy to be environmentally friendly, either in the materials used or whether it is recyclable. While those concerned about environmentally friendly packaging may be a minority, environmental concerns are a continuing trend.

To appeal to the green consumer, our report noted that produce packaging should include any relevant information about the packaging or symbols that indicate recyclability (many consumers expressed confusion as to where to locate this information on existing packaging). Overall, packaging would be enhanced by greater visibility of environmental messaging.

To learn more about PMA’s packaging study, visit the PMA website. These are free to PMA members; note that you must be logged in to the website to view any of the studies and reports.

Also, if you’d like to share your thoughts and opinions on consumer packaging in fresh produce, join the Increasing Consumption Community on PMA Xchange.

If you joined us in Anaheim last month for Fresh Summit 2012, but were unable to attend the educational sessions you planned to, I want to let you know that we have just finished a post-event recap page on our website that contains a number of valuable resources from this year’s event. Some of the content available to members and non-members alike includes:

• State of the Industry: Game Changers
• The Innovation Conversation: How to Survive the e-Revolution
• Preventive Controls & Wash Water
• The New Global Supermarket: Open for Business
• Your Business 2.0: Super iPad™ Tools that Keep You On-The-Go
• Retail Produce Tour

A sample of Fresh Summit content available to PMA members only includes:

• Closing the Gap: Engaging Multiple Generations in Today’s Dynamic Marketplace
• Fresh Produce as a Preferred Load: Competing for Transportation in a Shrinking Market
• Retaining Top Talent and Keeping it Engaged – A Total Rewards Approach
• Spotlight on Wash Water
• Beyond Branding: Leveraging Social Media to Drive Sales
• Capitalize on Your Sustainability Efforts: Reach a Consumer Base That Cares and Buys
• Gaining a Fresh Perspective on the Key Elements of “Solutions” Selling
• How Mobile Levels the Playing Field
• It’s a Digital World—5 Simple Steps to Social Media Success
• Selling Produce in an Era of Unprecedented Opportunity and Challenge
• Top Health Trends to Shape Produce Profitability
• Turning Consumers into Customers to Increase Consumption

You can also join the conversations surrounding Fresh Summit and read additional blogs and recaps in the Fresh Summit Community on PMA Xchange.

At the recent Sustainability Summit, put on by the Trading Partner Alliance (Grocery Manufacturers Association and Food Marketing Institute), speaker John Phillips of PepsiCo Inc. reviewed global megatrends likely to have impacts across the future value chain on sustainability. The trends come from Future Value Chain 2020: Building Strategies for the New Decade.

1. Increased urbanization (smaller stores – already happening)
2. Aging population that has spending and voting power (wider store aisles, bigger type on packaging)
3. Increasing spread of wealth, growing middle class around the world (look beyond your borders for new customers)
4. Increased impact of consumer technology adoption (rapid innovation cycles, convergence of digital and physical world – winners blend both)
5. Service trends – Consumers expect 24-7 anytime, everything (real-time generation, they don’t use e-mail)
6. Consumers increasingly value health and wellbeing (LOHAS: Lifestyles of Health and Sustainability)
7. Growing consumer concern about sustainability (food waste, government intervention on climate change)
8. Shifting economic power (explosion of BRICS)
9. Scarcity of natural resources (volatile food prices, pressure on natural resources)
10. Increasing government intervention (environment, sustainability, food safety)
11. Supply chain technology advances (transparency, visibility, traceability, data sharing)
12. Next-generation information technology (it’s all about the cloud)

Phillips’ takeaways were:

• Make sustainability the norm
• Optimize the shared supply chain
• Engage tech-enabled consumers
• Serve the health and wellbeing of your customers

How do these trends resonate with you? What are you doing today to prepare for tomorrow? Let’s talk about it in the communities of PMA Xchange (sustainability, supply chain efficiencies, consumption, etc.).