Sustainability Watch - local sourcing, part one
UK retailers want to source more food locally but critics believe industry infrastructure makes that difficult
In a two-part Sustainability Watch, Ben Cooper looks at what might be the most intractable of sustainability challenges for major food retailers.
Supermarkets face many challenges as they bid to make their supply chains more sustainable but there is one central problem that, in the eyes of some at any rate, they can never truly resolve.
That is that the supermarket distribution system, particularly in the highly developed form it has reached today, is in itself unsustainable. A sustainable means of delivering food should minimise the distance between production and consumption, not simply optimise the sustainability impacts of transportation over whatever distance the goods are moved.
As the man who coined the term 'food miles', Tim Lang, professor of food policy at City University in London, is as well placed as any to comment on the dilemma the retailers face.
Lang sees supermarkets as a mode of distribution founded on “cheap oil, pretty unlimited resources and infrastructurally supported by the state in the form of motorways". Over the past 60 years, "unimaginably large investment has gone into the system that we have now", he continues.
But today there are new requirements. "Essentially, the demand now is for a sustainable food system but that is totally different; it requires a totally different set of criteria and set of goals for aspirations, and yet that's what we've got to do."
According to Lang, local sourcing has become a "a proxy" for this new direction. However, his judgment on whether supermarket chains can deliver on local sourcing is stark. "Frankly the supermarkets can't do it because of the investment and the dynamics of the last 60 years. And yet supermarkets, constantly worried about consumers and consumer tastes, see the local as actually being very important."
Supermarket operators such as Sainsbury's would not disagree about the importance of local sourcing, but would naturally refute the suggestion that its efforts are essentially in vain.
Sainsbury's commitment to double sales of British food by 2020, as part of its recently unveiled 20 by 20 Sustainability Plan, and its activity around local sourcing, will both result in reduced food miles. These sustainability initiatives play well with consumers who say in surveys that they want more local, regional and British food on the shelves. So from that standpoint it's a win-win for the retailer.
"Many customers want to buy regionally sourced food which reflects local tastes and traditions and, in turn, helps support rural communities," says Sainsbury's regional trading manager Rich Squire. "It is therefore an important priority for us to meet their needs for locally sourced product."
Squire says local teams on the ground meet directly with producers and suppliers to build strong relationships. "They are also local to the area, so know exactly what sort of unique regional variations that the community might be interested in."
These relationships allow the company to offer "some truly local branded and own brand ranges". The strategy has been particularly successful in Scotland and Northern Ireland, says Squire, where some 140 Scottish suppliers and 186 Northern Ireland suppliers now provide more than GBP850m of local products. An impressive figure, but one that needs to be seen in the context of Sainsbury's GBP23bn turnover.
Tim Lang, professor of food policy at City University in London
So do such efforts represent more than tinkering at the edge of a far greater problem? While stressing that he respects efforts that are being made, Lang is sceptical.
"Basically if you want to apply a localist perspective to current supermarkets, they can't do it. It's impossible. What they are doing is some niche markets. The critics see it as token but nonetheless they are putting a huge amount of effort into it. But frankly there is an avalanche in the other direction."
Lang continues: "There is a conflict here. There is a certain amount that the retailers can do and are doing, but essentially whatever their rhetoric they are locked into something which has driven and continues to be inexorably driven in a rather different direction."
Sainsbury's clearly believes it can integrate a significant local offer within a logistics system designed for the nationwide distribution of a broadly uniform product range.
"The regional teams work closely with colleagues in logistics to ensure that all local supply chains remain as sustainable as possible," says Squire. "It can be complex, but we will keep challenging ourselves and working together to find the best solutions."
If computerised logistics systems can easily cope with tailoring which product lines are shipped to each individual store and in what quantities, integrating products locally relevant to that store is in theory possible. Sourcing products locally, given that the procurement model for national retailers is basically a centralised, head-office function, may be a tougher nut to crack.
However, Sainsbury’s senior supply chain manager Stephen Hayward stresses the retailer’s commitment to assist local suppliers. "We have distribution sites located near all the major transport networks across the UK, including road, rail and sea, which means we can offer simple delivery solutions to all suppliers, no matter how big or small."
Lang remains to be convinced that existing systems and infrastructures can deliver a meaningful shift to locally produced food. "That’s what they’re trying to do but from talking to people in that world it’s problematic."
He believes there is potential for some category management technology to be applied to providing "a more localised" offer, in what he describes as a "bio-regional rather than a local direction". However, he says while some of the supermarkets’ existing technology and infrastructure can be applied to such a strategy, some "is just completely antithetical to it".
Making progress on British sourcing, however, could not be said to be antithetical in the same way.
International sourcing has been part of the same dynamic of supermarket expansion outlined by Lang. "The trend over the last fifty years has been towards if not global sourcing, although there is quite a lot of that, certainly trans-continental sourcing; that is now massive," he says.
And, for many, this is another feature of the supermarket distribution model which makes it ultimately unsustainable. However, because it is concerned with reducing food miles beyond the UK infrastructure, boosting volumes of British food may be a more realisable sustainability aspiration than equivalent progress on local sourcing.
It is interesting to note that doubling the amount of British-sourced food is one of the commitments in the Sainsbury's 20 by 20 Sustainability Plan, whereas local sourcing, something which plays equally well with consumers and is clearly a pressing sustainability issue, does not get a mention.
A year ago, when Philip Clarke took the reins as chief executive of Tesco, one City analyst told just-food that the retailer's new boss was likely to only have to "fine-tune" the business than "rebuil...
A number of UK retailers have suspended contracts with two farms in Norfolk following revelations of animal welfare abuses at the sites uncovered by lobby group Animal Equality....
- Deal or no deal: Frozen sale makes sense for Kerry
- On the money: How Greencore is outperforming
- JBS sees big opportunity from Primo Smallgoods
- Interview part 1: BRF CFO Augusto Ribeiro
- Regional start-ups aim to ride China's online boom
- Kerry puts frozen food unit on block - reports
- Danone, General Mills, Chobani "mislead parents"
- United Biscuits UK plant to start strike action
- Indofood to buy Danone's Indonesian dairy arm
- Kellogg: Bisco Misr bid part of global leader aim