Going Behind the ROI of Sustainability
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Sustainability has become a driving force for good in the grocery industry in recent years. Initiatives surrounding food waste diversion, carbon footprint, emissions reduction, and more have proliferated, and the need to prove the return on investment (ROI) of these programs is becoming increasingly pressing.
Doing so, however, has been a perennial challenge for food retailers.
According to Christina Lampert, director of growth and innovation at Brooklyn, N.Y.-based sustainable food-rating company HowGood, the major retailers she works with have identified an inability to convey streamlined communication about efforts being made as one of the main challenges of proving the ROI of sustainability. Different certifications, non-standardized agricultural practices and other claims are well and good, but they can often leave grocers in the lurch.
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“If you think about a retailer who is procuring so many different types of CPG products, for example, all of these brands are talking about their own different sustainability initiatives, and it’s then up to the retailer to explain it to the shopper,” Lampert explains. “And what retailers are really struggling with is the fact that there’s no way to standardize all of that into one simple, digestible message for the shopper.”
Lampert also notes that many retailers have extremely low-carbon products on their shelves, such as seaweed snacks or pumpkin seeds, but they don’t necessarily qualify for a standard or certification. “There’s a huge opportunity there, but it’s just a challenge to identify what’s what in a unified manner,” she observes.
Measurement is definitely a challenge, agrees Corey Rochkin, principal at New York-based management consulting firm Oliver Wyman, especially since most of the emissions tied to a grocer are scope 3 emissions, which are generated by other players in the value chain through the production, delivery and use of the products the grocer sells. This means grocers often must rely on their suppliers and partners to measure and reduce these emissions.