Last month, Clarkston attended the Food Marketing Institute/Grocery Manufacturers of America Global Sustainability Summit in Seattle, Washington. The Summit discussions exemplified the level of commitment some of the world’s greatest brands were making to sustainability. The topics ranged from consumer behavior and preferences to sustainable sourcing, focused on many best practices and examples of what companies are doing that others can emulate.
There was a spirited discussion about how brand owners can do more and if the business case for sustainability could, or even should, be made. There were three key takeaways from this discussion, and in many ways, they sum up the state of sustainability practices within the consumer packaged goods space.
- Consumers are not necessarily willing to pay more for a sustainable product.
- Sustainability should not be viewed as an all or nothing approach.
- Sustainability should be viewed as an opportunity for collaboration rather than a point of competitive differentiation.
There was significant discussion and data presented illustrating that consumers are not willing to pay a premium price for products that are sustainable, particularly when there are less sustainable alternatives available. However, there are many contrary examples where consumers are paying a premium for sustainability; specifically, these cases are for products, brands, and companies that are true to their sustainability claims and fulfilling their brand promises. Consumers may not pay more for sustainability, but they will patronize a brand that aligns with their core values.
To explore the second key takeaway, if a company or brand cannot be fully sustainable, but can make significant and measurable impact in one area of sustainability, should they even bother if they won’t achieve price or margin improvements? Chris Lischewski of Bumble Bee Foods made a great case for controlling what you can control and working on the rest. Bumble Bee is a recognized industry leader in sustainability by working with fisheries around the globe to ensure sustainable practices. While Bumble Bee strives to promote sustainable practices in the fisheries they source from, it is not a one size fits all approach. Bumble Bee works with troubled fisheries to help them become more sustainable. They also use their market power to help drive initiatives and improvements across the board.
As the Summit was coming to an end, the final panel consisted of a roundtable of executives and thought leaders in CPG examining how companies and brands can “own the discussion on sustainability.” The companies represented on the dais (Unilever and Sam’s Club) presented some measurable actions they had taken towards sustainability, but along with the other presenters, challenged the audience as to why more could not be accomplished. It is noteworthy to mention that several of these companies were investing money and resources that may not necessarily pay off on the bottom line – and would also be directly benefiting their competitors (like Bumble Bee improving the global fishing industry).
There are many time and investment demands of CPG executives. When time is spent attempting to quantify the financial benefits of sustainability, and determining the potential for ROI, the real benefits may be overlooked. While sustainability may not translate directly to a market share point increase, it fulfills a brand promise that speaks to consumers and ensures the industry remains relevant. Even if CPG companies are not in a position to address all sustainability issues surrounding the business, they can still focus on what can be controlled and work with other like-minded brands on the broader topics.