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  1. Analysis
June 5, 2007

Food industry looks to greener future

Environmental issues are far more prominent in public debate today than a few years ago but Dean Best wonders how widespread such concerns really are among ordinary consumers. And by the same token, as food manufacturers and retailers tailor their strategies in response to greater environmental awareness, how much effect are green issues really having on mainstream food buying habits?

By Dean Best

Environmental issues are far more prominent in public debate today than a few years ago but Dean Best wonders how widespread such concerns really are among ordinary consumers. And by the same token, as food manufacturers and retailers tailor their strategies in response to greater environmental awareness, how much effect are green issues really having on mainstream food buying habits?


In the space of a few years green issues have emerged from the margins to take centre stage in political, social and economic commentary – in the West at least.


And the food industry has proved no different. Consumers are said to be more aware of environmental issues and some industry watchers claim that, as a result, shopping habits are beginning to change.


To what extent consumers are conscious of how their food consumption affects issues like climate change – and how much they even care – remains a subject of some debate. And when looking at big business, one also instinctively wonders how committed companies are to alleviating their impact on the environment.


However, when the chief executive of a retail giant like Tesco puts the environment firmly at the “heart” of the company’s business, it may be time to trust their sincerity, or at least give them a chance to prove it. Increasingly, companies – and their shareholders – realise that “being green” is good for business. Quite simply, reducing waste should help cut costs. Furthermore, by engaging their consumers on these issues, manufacturers and retailers can demonstrate how shopping habits can help the environment and, as the rising demand for organic and fairtrade products shows, grow margins as a result.


In the last week, a number of the leading lights in the food industry met in London at two conferences where green issues were debated. What was clear was the recognition that the food industry has a central part to play in tackling climate change through, for instance, curbing carbon emissions from the production, distribution and sale of food.


Manufacturers and retailers are working to reduce waste, improve energy efficiency and source products from sustainable resources. Tesco, for instance, has opened three “environmental” stores in the UK in the last year. The stores are built using sustainable materials, are partly powered by wind and solar energy and use concepts such as rainwater harvesting and cold-air retrieval systems to slash carbon emissions.


The initiatives come as part of Tesco’s bid to halve its worldwide carbon footprint by 2020. James Dorling, the retailer’s environmental development manager, says: “It’s important for the UK to learn from other parts of the business. A lot of the learnings we have adopted here we’ve taken from our new stores in the US, while our first environmental store was in Thailand.”


Such retailer initiatives, including Marks & Spencer’s eco-friendly “Plan A” programme, should be welcomed. With climate change seemingly on every commentator’s lips, consumers are faced with a wall of information and business needs to take a lead. Higher awareness of green issues has, it is argued, created a growing willingness among consumers to mitigate the effects of their consumption on the environment. Consumers know their taste for more exotic foods and their demand for products to be available all year round has led to an increase in food transport and carbon emissions. However, confusion reigns.


“Consumer awareness is phenomenally high but they are confused,” says Chris Brown, head of ethical and sustainable sourcing at Asda. “Consumers have been almost overwhelmed by a tidal wave of information on this. It’s massively complex and very difficult to get the story straight.”


Uncertainty among consumers about exactly how the food they buy affects the environment has – in the UK at least – led to the rise of “food miles” as a popular way of measuring that impact. However, while the concept of food miles remains easy for consumers to grasp it is, in practice, too simplistic. “Local” food is not necessarily more environmentally friendly than that produced overseas simply because the distance from farm to fork is shorter.


“There is no reason per se that food produced in Kent has a lower environmental footprint than food produced in Kenya,” says Paul Watkiss, the co-author of a 2006 report commissioned by the UK’s Department for Environment, Food and Rural Affairs to look at the impact of food transport. “If we focus more on carbon dioxide, we end up losing sight of wider sustainability issues.”


To consume food based merely on the distance it has travelled would be misguided on a number of fronts. Food grown naturally abroad and exported to the UK could have a lower carbon footprint than that produced here. What’s more, buying UK-produced food in an attempt to cut carbon emissions could have a devastating effect on the livelihoods in the developing world, whose incomes depend on consumers in the West.


The flaws in using food miles as a measure of environmental friendliness have led to calls for labelling to carry a measure of a product’s carbon footprint as a guide for consumers. Tesco has said it is working towards a universally accepted measure to determine a product’s carbon footprint. The company has received praise for its labelling of air-freighted products but it remains a complex problem, as Dorling concedes. In fact, he revealed that some of the company’s consumers believed the air-freight label was a sign of freshness.


Nevertheless, some industry watchers believe carbon labelling in some form is vital. “Labelling is inevitable. Consumers will want something to tell them what their carbon footprint is. The issue is what the label will tell them and what they want to know about,” says Anne-Marie Warris, global product manager for climate change at LRQA, part of the Lloyd’s Register Group.


However, finding agreement on the methodology and implementation of carbon labelling could take years to sort out. Labelling would need to cross national boundaries to work effectively in an industry dominated by multinational brand-owners and retailers.


“I’m acutely aware of international standardisation; coming up with a system that can be applied in other countries is hugely important,” insists Euan Murray, strategy manager at the UK-based Carbon Trust. “To be useful and practical for companies, there has to be one way of doing it or it’s not going to get done.” Indeed, the ongoing debate around nutritional labelling hints at how difficult it can be to develop a single system about which everyone can agree.


In any case, even after the two conferences, a nagging question remains – just how switched on are consumers to environmental issues anyway? It would be naïve to assume that price and convenience no longer remain the key drivers in food consumption. As one executive pointed out to just-food recently, almost two-thirds of consumers see organic food as healthier than standard products – but only one in ten buy organic with any regularity.


There is much talk in the food industry right now of consumers buying more premium food and, as part of that trend, being prepared to pay more for more ethically sourced and more sustainable products. But with a series of interest rate rises in the UK, could consumers soon tighten their belts? Green issues are no longer on the margins but how mainstream they have become – and how far they define shopping habits – remains to be seen.

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