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07/09/2021

The Regenerative Retailer

Sustainability leaders are setting a new benchmark as the focus shifts to improving the planet instead of simply doing less harm
Gina Acosta
Executive Editor
Gina Acosta profile picture

Retailing with a purpose isn’t new to CEO Chieh Huang’s company, Boxed.

The New York-based digital grocer, which said in June that it would go public in a transaction that will value the company at about $900 million, has always seen itself as an Environmental, Social and Governance (ESG)-focused food retailer since its founding in 2013. 

Huang recently explained that his company’s idea of ESG stewardship is to ship groceries in a single box from one fulfillment center, thereby reducing its carbon footprint. Another factor that makes Boxed an ESG-focused company, Huang said, is that in its corporate office, a majority of its employees identify as minorities. The vertically integrated retailer is also all “locally grown,” from its customer-facing front end to its proprietary technology to its highly automated replenishment operation.

Boxed is just one example of how food retailers have graduated from terms such as corporate social responsibility and sustainability to the newer ESG and what’s now called “regenerative retailing.” 

As the world enters the post-pandemic era, everything has changed, including the grocery shopper and why they choose to shop with one retailer over another (hint: It’s not just price or assortment). To appeal to this new consumer, companies such as Boxed, Walmart and other food retailers are increasingly seeing themselves as purpose-driven, regenerative retailers offering products and services that reflect demands for environmental, social and individual activism. More consumers than ever before want to understand how retailers will lead the way on healing not just the planet, but also societal problems.

The Regenerative Retailer
Companies are taking specific actions to be more environmentally proactive and socially equitable.

That’s why this issue of Progressive Grocer has a special section highlighting some of the retailers, trends and movements that are having the biggest, most meaningful impacts on the food retail industry now, from a sustainability perspective. From ocean health to community-owned grocery models to vertical farming, these innovations are creating positive changes by actively creating healthier communities, fashioning more equitable workplaces and fighting environmental damage. 

Last year, Walmart was the first, and the largest, retailer to aim beyond the ambition of sustainability at the business level when it laid out its regenerative-retail strategy. The Bentonville, Ark.-based retailer declared that its sustainability journey continues, but the destination has changed.

“We want to go beyond sustainability to become a regenerative company dedicated to placing nature and humanity at the center of our business practices,” CEO Doug McMillon said at the time. “Restore, renew, replenish. That’s regeneration. That’s a better world.”

McMillon went on to define “regenerative” as “restoring, renewing and replenishing, in addition to conserving. It means decarbonizing operations and eliminating waste along the product chain. It means encouraging the adoption of regenerative practices in agriculture, forest management and fisheries – while advancing prosperity and equity for customers, associates and people across our product supply chains. And, working with our suppliers, customers, NGOs and others, we hope to play a part in transforming the world’s supply chains to be regenerative.”

For McMillon and Walmart, progress on climate, waste, nature, and economic opportunity for people isn’t enough. Collectively, we must do more, he said.

“Racial equity is a necessary ingredient for the peace and prosperity of everyone,” McMillon explained. “The events before and after the murder of George Floyd have renewed and deepened our resolve to use our business capabilities to address systemic drivers of racism and be part of collective action to advance equity in this country and beyond. We are determined to make progress on this and our ongoing efforts to make Walmart a place of inclusive economic opportunity and advancement for all associates, through our jobs and career paths, our culture, our compensation and benefits, and our training and education.”

The National Retail Federal Federation recently held a State of Retail and the Consumer event, which explored the emergence of the “citizen shopper”: the consumer who wants retail stores to be more than just places to shop. Today’s shoppers vote with their wallets, supporting brands and stores that stand for important causes, including equity, sustainability and climate change – all of the issues that Walmart is targeting with its regenerative-retail strategy.

According to the Washington, D.C.-based National Retail Federation, retailers looking to lead with purpose should focus on four key areas: socioeconomic issues (including social equity, tolerance, and unconscious bias); appealing to the “citizen shopper” (retailers that stand up for social and political causes might alienate some customers but can also create loyalty among customers who do share their values); improving omnichannel (Vivek Sankaran, president and CEO of Boise, Idaho-based Albertsons Cos., has emphasized the need for brands to shift to a quality omnichannel experience — maintaining the convenience of online shopping while continuing to provide a valuable in-store experience); and not ignoring price (consumers ranked affordability the highest among their key values).

During a time when the food retail industry has been challenged in monumental ways, companies are already taking some of these specific actions to be more environmentally proactive and socially equitable. Now is the time for more retailers to adopt the regenerative-retail practices that will allow the industry to come out of the pandemic even stronger than ever before.

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