By Chris Blasinsky
Retailers who choose to sit back and watch the competition move toward sustainable business models will soon have nowhere to hide, except maybe their head in the sand. Sustainability — cutting costs, pre-serving natural resources and protecting and preserving the environment for future generations — is not a fad, and it’s not going away anytime soon. As more consumers begin to measure packaged goods manufacturers and retailers by their sustainable or “green” practices, those who don’t focus on more earth-friendly ways of doing business are leaving money on the table and sending customers to the competition.
In January, the Grocery Manufacturers of America (GMA) hosted its first ever Environmental Sustainability Summit to discuss solutions, capture ideas and share best practices on the importance of driving sustainable business models within the consumer packaged goods and retailing industries.
GMA expected about 150 people would show interest in the event. But in fact, more than 500 global CPG companies, government officials and retail executives from grocery, mass merchandisers and allied associations — including NACS — participated in the event. Cal Dooley, GMA president and CEO, kicked off the Summit by noting that “corporate behavior on sustainability is rapidly changing”; it can improve a business’s bottom line and enhance customer loyalty. The spike in attendance was an indication that a chunk of corporate America is paying attention.
Embarking on this journey is no easy task. Perhaps the most pressing takeaway from the Summit was that creating a sustainable business model is a multidiscipline effort that requires various levels of expertise, resources and reliable data — all of which can be more easily amassed and developed through partnerships.
At Conservation International (CI), partners “is a huge word,” according to Peter Seligman, the organization’s CEO and board chairman. CI has more than 1,000 partners, including corporate partnerships with Anheuser-Busch, Coca-Cola, Kraft Foods, BP, ChevronTexaco, Conoco-Phillips, Shell, McDonald’s, Starbucks and Wal-Mart. Seligman commented that these relationships help benefit CI’s mission and expand the organization’s outreach efforts to protect and preserve the environment, particularly in developing nations.
“These are complex issues,” said Seligman. “Today is a moment in time where we have the knowledge to know our impact” on the environment and the climate, he said, advising retailers to move toward sustainable business models by relying on partnerships with CPG manufacturers, local communities, non-profit organizations, universities and government agencies. He also commented that businesses can create consumer confidence and loyalty by becoming more sustainable, which is good for their brand as well as the environment.
Stephen L. Johnson, administrator of the U.S. Environmental Protection Agency (EPA), commented that partnerships create “a remarkable opportunity” to improve the quality of the environment. He praised the grocery industry for its sustainability efforts, noting that it’s an industry “working to be leaders in going green,” and gives consumers an opportunity “to support green companies that they believe in.”
Johnson noted a popular partnership with EPA’s Energy Star program, which helps retailers increase sales and customer loyalty by using products designated as Energy Star–qualified, such as refrigerators and coolers, freezers, lighting, windows and HVAC units. (Check out EPA’s Energy Star resources for grocery and convenience stores at www.energystar.gov under “Small Businesses.”)
Many companies are also finding that sustainable partnerships begin with their most valuable assets: employees. Take Wal-Mart, a global retail leader accelerating down the road of sustainability. After only two years of focusing on sustainable practices, the company does not consider itself a green company yet — but it is making significant strides, noted Matt Kistler, senior vice president of sustainability for Wal-Mart Stores.
Kistler admitted that some of Wal-Mart’s best ideas for reducing waste and cutting costs have come from employees. One North Carolina store associate questioned how much energy could be saved if they turned off the lights inside breakroom vending machines. Today, the vending machine lights are off, and Wal-Mart has saved more than $1 million in related energy costs.
Grocery retailer Safeway considers its journey toward green practices “a priority and a promise,” according to Joe Pettus, Safeway’s senior vice president of fuel and energy. Through the EPA Green Partnership program, a voluntary program that encourages organizations to use green energy sources such as wind and solar, Safeway has committed to purchasing enough renewable energy credits to offset 100 percent of the electricity usage at its U.S. retail gasoline stations, its corporate campus facilities and all of its San Francisco stores.
Safeway is also the first retailer and grocer in North America to partner with the Chicago Climate Exchange (CCX). Partnering with CCX is voluntary, but members are legally obligated to meet yearly reductions in greenhouse gas emissions. In January, the retailer also announced the conversion of 1,000 transport trucks to biodiesel.
The GMA Summit brought together some of the brightest individuals who are leading their companies, retail partners and consumers on the journey to developing solutions and best practices that drive sustainable business models. Retailers are responsible for selling a majority of the products produced by CPG companies, which makes the choice of sitting back and just observing today’s environmental issues a bad one.
Looking back on our October 2007 NACS Magazine cover story, the message was clear: Convenience and petroleum retailers are not on the cutting edge of developing sustainable business models. Grocery stores such as Safeway and hypermarkets such as Wal-Mart are doing a phenomenal job at creating sustainable businesses that benefit their consumers, their brand and the environment. But they haven’t been trudging this path alone — they’ve relied on valuable partnerships.
If you have already started the journey, good for you. Imagine what our industry can do when we all work together. And for those who have yet to address sustainability, it might be worth getting your head out of the sand and taking some action.