Blog: M&S's green narrative stands retailer out from the crowd
Dean Best | 1 March 2010
With suppliers and retailers jostling to be seen to be green, a strong narrative is becoming vital to hold consumers' attention.
Sustainability is no longer a buzz word; it is so often used it has become part of our industry's vernacular. But, with ubiquity, comes the danger that green initiatives lose their power, especially in a climate when consumers have other concerns.
However, Marks and Spencer's Plan A programme has a definite narrative and is a series of programmes that has lifted the UK retailer above its peers in its apparent commitment to environmental issues.
Today (1 March), M&S has set out a raft of new initiatives under the Plan A scheme, including making sure all products sold in its stores have "at least" one sustainable or ethical quality. The retailer's initiatives also include plans to enable its leading food suppliers to run "Plan A factories", which "adopt best-practice ethical and environmental standards".
To some, such words may be just that - words. But M&S has demonstrated its desire to make Plan A central to its way of working. Investments in new "eco stores", for instance, suggest M&S's environmental push is something it too is prepared to follow - and not just something the retailer demands its suppliers sign up to.
Similar noises on the environment came from Wal-Mart, the world's largest retailer, last week. The company is aiming to cut 20m tonnes of greenhouse gas emissions from its supply chain between now and 2015. The announcement was the latest in a series of plans Wal-Mart has to reduce its impact on the environment. The retailer has already developed a "sustainability index" to judge the performance of its suppliers on environmental issues.
However, the rhetoric from Wal-Mart suggests a less co-operative approach on the issue than that adopted by M&S. Given Wal-Mart's size, any moves it makes to cut its carbon footprint is likely to have a meaningful impact on how the industry as a whole effects the environment. However, amid Wal-Mart's increasing demands on its suppliers, less is heard about the retailer's own moves.
In fact, beyond the announcement, Wal-Mart was coy about the exact impact its plans will have on suppliers. Wal-Mart held a "webchat" to answer questions on its plans and, when asked whether the retailer would "press" suppliers to make "sacrifices", it said its plans would "closely involve" suppliers and would help its vendors save money.
Wal-Mart, however, stayed tight-lipped when we asked the retailer if a supplier's commitment (or otherwise) to the environmental cause would be a deciding factor in whether certain brands would be listed or pulled. You can be sure Wal-Mart's suppliers will be facing increasing demands in the weeks and months ahead.
Wal-Mart has benefited from the growing popularity of private-label products among US consumers in the last 18 months. Diamond Foods, a primarily own-label nut supplier, has also prospered. However, last week, Diamond moved to add some branded sparkle to its portfolio with the signing of a US$615m deal to buy upmarket crisp maker Kettle Foods.
While the M&A market remains subdued, Diamond's move for Kettle is a sign that some companies will pounce when the deal is right - even if it takes the business into a new field or category.
According to one analyst, the acquisition of Kettle will "transform" Diamond, with more of its revenue coming from branded products. The same analyst, however, suggested buying Kettle could make Diamond itself a takeover target. The bigger players in the fast-growing snacks category will be watching with interest.
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