Sustainability will continue to influence consumer decisions
Sustainability is not new. This has been something that has been influencing consumer and your customer decision making for a while. It is strong enough to have stayed top of mind through the pandemic. That proves it is here to stay. Suppliers need to be working on this and proving to both customers and consumers that you are making change where it is needed.
Between now and the end of 2021, we will share 10 SKUFood insights to help you make the most of 2022. We try to help you see the entire value chain and prepare your business to respond to changing customers and consumers. Each week we will share a different theme and some ideas and opportunities for you to consider.
Consumers and customers are demanding change
Food and beverage producers and processors that want to be successful need to satisfy two masters: consumers and customers. Consumers are the end users who ultimately buy your product and take it home to their family and friends to consume or use. Customers are the retailers and distributors that issue purchase orders and pay you.
Similar for the demand for ‘local’ we discussed last week, this trend is something consumers and customers are looking for. Media coverage of climate change and other environmental issues remains strong. Many consumers want to do their part and they are willing to shift their purchases to products that allow them to feel good about what they are doing.
Retailers are under pressure to do their part as well. Our major Canadian retailers are big business that can have a significant impact on the environment. They have trucks on the road all the time and stores can create a lot of waste and garbage. There will be more expectations on suppliers to contribute to retailer’s efforts. This sign was in our local Sobeys store this week. They are trying to help consumers with reducing waste.
There are three areas of focus for suppliers:
- Overall impact on the environment
- Packaging
- Food waste
Overall impact on the environment
Suppliers need to illustrate they are improving their overall impact on the environment. This is a broad statement but there are so many different opportunities. If you are a primary producer this could be more efficient use of water, density of planting to reduce the land required or one of many other initiatives. If you are in processing it could be more efficient use of energy in your production facility or better optimization of freight. Again, there are many areas to focus and prove you are making change.
Packaging
Almost every food product has a package to ship through the supply chain and a package for the individual product. Some of the packaging is there to protect the product, which is necessary. Some of the packaging is in place to help with sales and branding which might or might not be necessary. Some packaging is 100% necessary and some could be improved.
It is a very complicated and expensive issue.
Capabilities for recycling are different from one area to another which does present challenges. Your customers, the retailers also might have different perspectives on what is right and where they would like to see change. The regulators have also been working to implement change and plastic has been in the news a lot. Single use plastic is definitely something they are trying to eliminate.
Every food and beverage business should be doing a review of packaging. This is something that should always be on the to do list. The public perception, recycling capabilities, regulators and customers are changing all the time.
We continue to see innovation in this area. The bakery packaging at our local Loblaw store has a new window that is not plastic. Where it goes in the waste stream is something to figure out but it is change. When your customers are implementing it in their stores you need to consider it in your business.
Food waste
All of the major food retailers in Canada, with the exception of Costco, made the commitment to reduce food waste by 50% by 2025. This is a huge number and the entire value chain will have to change to meet this target.
Food waste is an issue consumers will be more passionate about because it is easy to see. They can look right in their own compost bin to find it. For that reason there will be pressure to demonstrate improvements.
We see products made from food waste and the process of upcycling is becoming more prevalent all the time. These products are an example of that.
Food waste occurs from the field right to the consumer’s fridge. Suppliers need to be looking for opportunities to reduce this. One secret is that it can improve your marketable yield which should improve your profit.
Share your wins
When you do make progress on any of these initiatives in 2022 share the results with customers and consumers. They both want to see improvements and they should be positive to the change. Do not assume they will see what you are doing and give you credit. Find opportunities to share the story and demonstrate your commitment to change.
If you have any questions or require help understanding where sustainability fits, you can always send me an email peter@skufood.com or call me at (902) 489-2900.
Peter
As we approach a new calendar year, we will continue to share insights to help you position your business for increased success in 2022.
“If sustainability can survive a pandemic you know it is here to stay”
Peter Chapman
If you see things happening let us know so we can share them with our community. We also want to hear if you find this helpful and benefits your food and beverage business!
Public relations can be a win
There are a lot of opportunities to get recognition for things you do in your business. Small to medium producers and processors can be a good news story. You should consider the benefits of this and look for opportunities to tell your story.
Larger companies have to create stores like this one from Nestle. It is interesting and they will get some media coverage for it. Media coverage and people sharing on social media can be very valuable. Look for those opportunities to increase your brand exposure.
Are you ready for a ‘driverless’ truck?
Walmart have received approval from Bentonville Arkansas to implement ‘driverless’ trucks. I still think it would be strange to see a truck going down the road with no driver. They have proved over the last year they are 100% safe. Perhaps safer than trucks driven by humans.
Given the challenges associated with logistics and labour this will be part of the future. You should ask your logistics partners how they feel and if the cost will go up or down?
When is Peter speaking?
Agriculture and Agri-Food Canada and Learnsphere
Turning pitches into purchase orders in export markets - November 19 & 26
Foodpreneur Advantage
Creating your best pitch for national retailers -November 23
Newfoundland and Labrador Federation of Agriculture
Getting more NL products in the shopping cart -November 27
Gander NL