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10/18/2021

The Next Frontier in Responsible Sourcing

As responsible sourcing becomes more common among grocers, what’s coming up in this space for them to be aware of?
Bridget Goldschmidt
Managing Editor
Bridget Goldschmidt profile picture
The Next Frontier in Responsible Sourcing
Grocers like Imperfect Foods are responding to rising consumer demand for greater transparency regarding the origins of the foods they buy, including produce.

Over the past few years, responsible sourcing has moved from a choice that food retailers made in accordance with their values to an imperative for specialty and mainstream grocers alike, as customers increasingly demand transparency in the supply chain with regard to eco-friendly and non-exploitative practices. As such, grocers are not only adopting responsible-sourcing policies in greater numbers, but also making sure their customers know about them and keeping an eye on emerging issues in this arena.

“Food retailers’ ability to source abundant food depends on healthy soil and water, a stable climate and diverse ecosystems,” notes Kendra Klein, senior staff scientist at Washington, D.C.-based Friends of the Earth U.S., whose latest Bee-Friendly Retailer Scorecard, ranking 25 of the largest U.S. grocery retailers on pesticides and pollinator protection in their food and beverage supply chains, features Giant Eagle, Whole Foods Market and Walmart in the top three spots. “All of these are under threat due to increasing environmental damage. Independent scientists have named the intertwined biodiversity and climate crises as the two biggest existential threats facing our planet.”

According to Klein: “Food retailers have the market power to make massive changes in our food system.” In 2020, the combined sales of the top 100 retailers of food and consumables increased 11.6% to $2.1 trillion, compared with $1.9 trillion last year, according to The PG 100, an annual ranking from Progressive Grocer.

“Food retailers have a critical responsibility to both consumers and the animals raised within their supply chain,” asserts David Coman-Hidy, president of The Humane League, a Rockville, Md.-based group that’s part of a coalition of animal welfare organizations behind the Better Chicken Commitment to humane chicken-handling practices, which has already been adopted by more than 200 major food companies, including Whole Foods, Natural Grocers by Vitamin Cottage, Sprouts Farmers Market and Giant Eagle. “Consumers should be able to trust that the food products they purchase from grocery stores and other retailers are sourced in an ethical, humane and sustainable way. There are currently no federal laws in place to protect farm animals when residing on factory farms.”

Continues Coman-Hidy: “Recent [research from the ASPCA has] shown that the vast majority of consumers are concerned about the welfare of animals raised for food. Consumers are also paying more attention than ever to food labels that indicate how those animals were raised.”

a close up of a chicken in a cage
Whole Foods, Natural Grocers, Sprouts and Giant Eagle are among the food retailers that have signed on to the Better Chicken Commitment.

Retailer Efforts

Earlier this year, German deep-discount retailer Aldi revealed a new sustainability charter built upon its existing framework of corporate responsibility initiatives. “This charter outlines our updated commitment to promoting human rights, supply chain transparency and ensuring products are produced in a way that respects the environment and those within our supply chain,” explains Joan Kavanaugh, VP of national buying at Batavia, Ill.-based Aldi U.S.

Under the charter, Aldi committed to source 100% of its exclusive-brand fresh, frozen and canned seafood from responsible fisheries and farms, a goal it met in 2019; to have 100% of its exclusive-brand chocolate and seasonal confectionery items certified as sustainably sourced by third-party suppliers, with select baking products like baking cocoa and morsels now also certified as sustainably sourced (completed this year); and to add more certified coffee to its product portfolio, with all Barissimo and Simply Nature brand coffee to be 100% certified as sustainably sourced by a third-party partner by 2022.  

The retailer cares about more than the welfare of the planet, however: Aldi partners with fair- trade certifying organizations like Fairtrade America, Fair Trade USA and Rainforest Alliance to ensure products like coffee and cocoa are produced in a sustainable way.

“Certified fair-trade products receive a seal from these organizations once they are confirmed to meet their standards,” says Kavanaugh. “The seals are displayed on product packaging, making them easy for consumers to identify as they do their grocery shopping. When customers buy fair trade certified products from Aldi, they can be assured they were created in a manner that protects the environment and supports farmers’ livelihoods.”

The company is also supporting Fair Trade USA’s Just One Cup campaign this year to raise awareness of sustainable coffee during Fair Trade Month, helping the Oakland, Calif.-based organization to promote private label fair trade coffee by donating bags of Simply Nature Organic Single Origin Coffee from Honduras to share with consumers.

Lakewood, Colo.-based Natural Grocers sells only 100% organic produce, 100% non-GMO bulk foods, 100% pasture-based dairy, 100% free-range eggs, 100% humanely and conscientiously raised meats, and all of the grocers meats are raised without antibiotics, hormones and other growth promoters. 

“Our standards are built around asking questions and setting high minimum standards, which differentiates us from all other retailers who usually only tout their highest-quality products but do not tell customers about all the lower-quality items on the shelf,” observes Christie Zimmerman, Natural Grocers’ product standards manager, food. “We ask questions and demand transparency and honesty in labeling. Questions about seeds, soil, feed for animals; how crops are raised; what are the unintended consequences of how something is created; what is the environmental impact on the land, water, wildlife; are people negatively affected by the industry producing the product; is the packaging or distribution detrimental – the list goes on. Our Things We Won’t Carry and Why list has been in place since the 1990s and transparently tells customers the ingredients not allowed on our shelves.”

To make sure that Natural Grocers customers are aware of these standards, the company undertakes “monthly good4u crew trainings to employees so they continually receive up-to-date nutrition education and can answer customer questions effectively,” notes Zimmerman “We utilize social media marketing, we film short documentaries like ‘Ghosts of the Great Plains,’ which was nominated for a regional Heartland Emmy in 2020, in addition to providing free science-based nutrition classes in stores and online, as well as free health coaching, cooking demos and more. Events like our Beauty and Body Care Bonanza event, Organic Harvest Month, [and] Non-GMO Month all highlight our standards by drawing specific attention to various standards throughout the year and how customers can make informed purchases. ... All of these avenues help customers understand our standards, so they are empowered to make an ethical shopping decision that aligns with their personal values.”

The grocer’s work in this regard “sparks fierce loyalty” among shoppers, she asserts, attributing this response to “our high-level standards.”

For San Francisco-based e-grocer Imperfect Foods, reducing food waste is the main goal. “‘Save food whenever we can’ has been core to the Imperfect Foods mission since its inception,” affirms Madeline Rotman, the company’s head of sustainability.

Getting that message across involves full disclosure of what shoppers are getting in their boxed orders. “We tell our customers the imperfection of each item, whether it was too big or too small,” says Rotman. “This is the No. 1 way that we can communicate to our customers when we can save food. For staple items that we always have, like proteins, we share with our customers that our eggs are cage-free, our chicken is always antibiotic-free, and we offer grass-fed beef and pasture-raised pork.”

Imperfect Foods also recently launched a campaign with culinary celebrity Padma Lakshmi, “Behind the Box,” consisting of a video in which Lakshmi explores the e-retailer’s process, explaining how it works directly with farmers and producers to reduce food waste by bringing “ugly” and surplus groceries to consumers across the country.

The Humane League’s Coman-Hidy also has some advice for retailers seeking to promote their responsible-sourcing policies. “When an animal welfare commitment is made by retailers and other food companies, their detailed policy should be publicly listed on their website so that consumers can have a strong understanding of where their food is sourced from and the improvements the company is working towards,” he recommends, adding, “With any animal welfare standard, an important next step after putting a policy in place is to report progress toward the end goal. Companies can do so by annually reporting what percentage of their egg, pork or chicken supply meets the responsible-sourcing standards they’ve set.”

That way, he says, “consumers can make informed decisions regarding their food and lifestyle choices.”

a stack of flyers on a counter
Imperfect Foods informs customers exactly what they're getting in their boxed orders from the e-grocer of "ugly" and surplus groceries.

Even More Responsible

What should retailers be aware of on the responsible-sourcing horizon? A number of items, it turns out. 

“Regenerative products,” asserts Zimmerman without hesitation. “We are already seeing them, and we are spending considerable time developing a holistic definition of what regenerative agriculture means to Natural Grocers. The term ‘sustainability’ is still meaningful, but so many brands green-washed with that as a label claim, when they were not really doing the hard work. We pushed back on vendors who did that then, and we are doing so now to hold brands accountable. We vet any ‘regenerative’ label claims carefully so that the same thing doesn’t happen. Words have meanings, and it’s our job to hold vendors responsible to actually meet the definition of those words. Regenerative agriculture is a wonderful and powerful movement that has the ability to positively affect the industry in a great way, and we’re doing our part to ensure that it doesn’t simply become a marketing term a brand throws on their new products.

“Upcycling!” enthuses Rotman. “Finding food that is a byproduct of production or an end/bit and saving it through upcycling allows delicious foods to live on the shelf that you may not realize help save food from waste.” As an example of this, Imperfect Foods offers upcycled vanilla cookies, containing flour made from oat milk production. 

Friends of the Earth U.S.’ Klein points to new research from Proagrica, a global provider of technology solutions for the agriculture and animal health industries, showing that 37% of Americans think that decreasing the use of pesticides is the top issue in the agricultural sector, and and 68% of Americans are now eating more organic food.

Similarly, according to recent polling by YouGov commissioned by Friends of the Earth, 83% of Americans believe that it’s important to eliminate pesticides that are harmful to pollinators from agriculture, and 74% believe that grocery stores should back efforts to protect pollinators, such as bees and butterflies. “Eighty-one percent want their food to be free of pesticide residues, and 67% feel it is important that the grocery store they shop at sells organic food,” observes Klein, implying that more grocers should adopt and publicize policies on pesticides to assuage shoppers’ concerns.

With these new areas of focus arising, it’s clear that grocers need to keep evolving their responsible-sourcing strategies, or get left behind by consumers who will take their business elsewhere.

“Certified products will continue to become the norm within the grocery industry as shoppers grow increasingly aware of how their favorite products are brought to store shelves,” predicts Aldi’s Kavanaugh. “We have already seen the customer demand for transparency from retailers about how food was grown, caught or raised to ensure it has been responsibly sourced, and we expect that demand to continue to grow."

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