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05/25/2021

Retailers Are Relying More on Sustainable Supply Chains

Grocers like Whole Foods Market are highlighting responsibly sourced products to make it easier for shoppers to feel good about what they buy
a group of fruit and vegetables on a table
Whole Foods' Sourced for Good is an exclusive third-party certification program encompassing more than 100 products throughout its stores.

It seems that living through a global pandemic has made the world a smaller place and in the supermarket industry, this perspective is playing out with a renewed focus on more sustainable supply chains. Retailers and manufacturers alike seem more eager than ever to do business in a way that considers the long-term well-being of all sectors of the supply chain, and at the same time sends a positive message to consumers (and investors), ensuring them that everything from sourcing to packaging has been carefully considered.

In one of the latest examples of sustainable sourcing, Austin, Texas-based Whole Foods Market recently unveiled a Sourced for Good seal to help customers identify products that support workers, communities and the environment by providing things like improved wages, health care, student scholarships, and planting trees to prevent erosion. The new program replaces the natural and organic food retailer’s Whole Trade Guarantee, which it launched back in 2007. According to Whole Foods, the upgraded program has raised millions of dollars annually for hundreds of communities across 12 countries, including the United States.

Sourced for Good is an exclusive third-party certification program that encompasses more than 100 products throughout Whole Foods stores, including mainly produce items, but also seafood and florals. The products are certified by groups such as Fair Trade USA, Rainforest Alliance, Fairtrade America, Fair Food Program and Equitable Food Initiative.

“At Whole Foods Market, our Sourced for Good products not only are good, they do good,” noted Karen Christensen, the chain’s SVP of merchandising for perishables, when the program launched on April 7. “Our commitment to equitable trade has funded numerous community projects – from dental clinics to housing facilities to student scholarships to bird sanctuaries. By purchasing select products, customers help us in our goal to make a difference, and now with Sourced for Good, we’re offering shoppers an easier way to find these special products in our stores.”

What’s in a Label?

Indeed, perhaps the most important aspect of this program is the Sourced for Good label itself, which calls attention to products that otherwise may not be so easily noticed by shoppers. According to a study conducted online by The Harris Poll on behalf of Whole Foods, 75% of Americans said that when they’re grocery shopping, it’s important to them that products are responsibly sourced. Yet 65% of shoppers admitted that they’re confused about how to determine whether a product is responsibly sourced.

These findings follow similar research conducted by the International Food Information Council. According to the Washington, D.C.-based council’s “2020 Food and Health Survey Report,” 63% of consumers surveyed agreed that “it’s hard to know whether the food choices they make are environmentally sustainable.” The top two perceived identifiers of sustainability were “labeled as sustainably sourced” and recyclable packaging.

Arlington, Va.-based FMI – The Food Industry Association highlights the need for clearer consumer messaging in regard to sustainability in its recently released report, “Sustainability in the Food Industry.” FMI’s “Grocery Shopper Trends 2020” research finds that 39% of U.S. consumers surveyed said they’re interested in learning more about the sourcing of ingredients, while 36% would like to know more about the production of ingredients.

Meanwhile, omnishoppers – or those that make use of both in-store and online shopping – are quite eager to learn more about products through their online research, the trade group notes. FMI and the Consumer Brands Association, also based in Arlington, have begun to address this need by offering the SmartLabel, which provides access to detailed information on hundreds of product attributes that would never fit on a package label. Information from the SmartLabel is accessible through a wide range of device types. In its sustainability report, FMI stresses the “unrealized potential” of this technology that can highlight certifications, much like Whole Foods’ new program is doing.

Aiming High With Certification

Janice Neitzel, CEO of Sustainable Solutions Group, an animal welfare consulting group based in Chicago, observes that programs such as Whole Foods’ Sourced for Good require a great deal of legwork and commitment.

“It’s no small feat to create a comprehensive, measurable, transparent and auditable certification program,” Neitzel notes. “Whole Foods has the skills to do this because they began decades ago, developing the highly respected 5-Step Animal Welfare Program from Global Animal Partnership (GAP) for supply chain animal welfare. Not only is the 5-Step GAP program used at Whole Foods, it was spun off and is widely available for use.”

She adds that she’s hopeful that Whole Foods’ parent company, Seattle-based Amazon, will be undertaking the 5-Step Animal Welfare and Sourced for Good programs.

Neitzel continues, “Many retailers across the spectrum have been working on responsible sourcing issues, and it is a matter of undertaking truly credible programs and providing transparency to consumers.” As examples, she cites Kroger’s Zero Hunger | Zero Waste program and Phoenix-based Sprouts Farmers Market’s work on sourcing and food waste recovery, which she considers to be “well done.”

Neitzel advises retailers to be cautious of programs that have low criteria and appear to be “green-washing,” however. “Shoppers want clarity, not confusion,” she stresses.

 

Retailers Step Up Sustainability Commitments

A little more than half of grocery retailers surveyed said they have quantified goals in place regarding responsible sourcing, up from 49% the year before, while 52% are committed to providing product transparency.

Does your company have quantified goals and implementation time frames for: 

 

Yes, in Place  

No, Working On

No, No Plans

Energy Use Reduction         

72%

20%

8%

Food Waste Reduction

68%

22%

11%

Diversity in Hiring

67%

67%

8%

Responsible Sourcing

55%

14%

29%

Package Waste Reduction  

53%

28%

18%

Product Transparency

52%

20%

28%

Employee Volunteer Program

38%

17%

46%

Animal Welfare

34%

14%

52%

Carbon Emissions Reduction

32%

19%

49%

Supply Chain Transparency

31%

25%

44%

SmartLabel

22%

18%

60%

Source: FMI – The Food Industry Association, “The Food Retailing Industry Speaks 2020”