Tuesday, October 6, 2009

The New and Improved Food Industry

The New and Improved Food Industry
by Winston Riley

While Farmer's Markets, local organic fruits and vegetables and the Slow Food movement are broadening the definition of grocery shopping, especially for the affluent, there are lots of ways that the food industry can improve, besides just supporting sustainable agriculture. Thatcher Young writes "Organic foods (and other industries) are all stepping up to the plate," when it comes to Moving From Standards to Sustainability in his article of the same name from http://www.environmentalleader.com/2009/09/17/moving-from-standards-to-sustainability/.

The article makes some excellent suggestions about what can and can't be controlled when breaking down a sustainability plan into digestible pieces. My weariness doesn't spring from his viewpoint. In fact, I support the idea of developing standards, and I also agree that creating a sustainability plan is necessary. What is starting to "wear me out" is the notion that the food industry's only medicine is to buy local and/or buy organics. Organics are great and the category has enjoyed explosive growth because it is important. People and planet are doing better because of work done by the Organic Trade Association, as well as other wonderful efforts to expand the consumption of organic products. But even more important than the tactic of shifting from traditional farming to sustainable agriculture is the CULTURE shift in large and small companies to embrace the notion of the triple bottom line.

Later, I'll return to Thatcher's idea as I describe our plan. But first, the appeal. We are the Ecological Food Manufacturers Association (EFMA) and we need help. We need all eyes on deck. Will you help us connect the dots? If you have a source who may be connected to another source--will you help us find a few good MENtions? What we need are dedicated believers who are already doing this. We hoped Gary Hirshberg, from Stonyfield Farm, would be our poster child, but he's too busy. We understand. The people we need and the companies they work for don't have to be superstars. But we do need to find a few people who want to help get this organization going.

A first question, when confronted with this appeal may be "What good will it do?" To answer the question, one only needs to consider the environmental impact which our food industry makes. Looking at the many ways the environment is affected by food production--agriculture, health, water use, energy, waste, emissions--let's just agree the moral imperitave to reform the food industry doesn't need to be discovered. But still, let's examine the reason for reform. First we should describe what Ecological Foods are. I define the category as "beyond organics" because a company can be ecological in dozens of ways besides using organic ingredients. The laws of supply and demand will encourage more food companies to increase their green behavior, and these same companies will add more green products and grow the production of their existing eco brands. The untold benefits to the environment will cover the gammet from generating less waste, using energy and resources more efficiently, being better global citizens, expanding fair trade practices, and drastically slashing emissions.

But now take a cosmic leap forward to the health benefits and by extension the reduction in health care costs. Take another leap to the direct impact on consumers of seeing food as their connection to the environment and the sustainability movement. EFMA simply wants to expand the sustainability umbrella beyond shelter (now radically improved thanks to LEED and USGBC) to include food. We'll leave clothing and Maslow to another researcher and problem solver.

The second question which is more important--What is the benefit to being a member? The simple answer is PROFIT. Still, the skeptics want proof that becoming a green food manufacturer won't add cost to an already challenging business climate.

We'll start with the obvious... BUILDINGS. Green commercial buildings pay for themselves in three to five years (so goes the typical claim). I'll let your fingers do the googling to help you arrive at your own conclusions. But it's safe to say a green building doesn't cost you money but makes you money--the only debate is about how soon. It is widely reported (WSJ Sep 2009) that commercial real estate accounts for nearly 20% of U.S. energy use, making the sector one of the biggest opportunities for curbing greenhouse gas emissions.

PACKAGING--Approximately 3/4 of companies sustainability efforts now focus on packaging, according to global supply chain researcher AMR. In an article from the Feb 16 issue of Industry Week, it was reported that using sustainable packaging is a cost saver, when practicing a 4D Methodology of Ergonomics, Cost, Sustainability and Logistics.

DISTRIBUTION--By practicing alternatives to worn out trucking practices, (such as those promoted at http://www.greentruck.com/, a service provided by the American Trucking Associations in cooperation with the Transportation Environmental Resource Center), a company will make more money by saving money.

The likely argument is "We don't need to join another trade association to do those things, we're already doing them." But that IS the reason to join trade associations. To better the industry by meeting and sharing and inviting outside experts. For instance, what better place for members of the food industry to learn about intricate and technical information, specific to sustainability? INDUSTRIAL ECOLOGY is the shifting of industrial process from linear (open loop) systems, in which resource and capital investments move through the system to become waste, to a closed loop system where wastes become inputs for new processes. It is imperitave that the industry help define the parameters and challenges so closed loops can be created. The analysis will be much more efficient and cost effective if the industry, including manufacturers, retailers and wholesalers work together.

Again though, these are supply chain cost savings, which will increase profit. Taken in isolation from growth, this represents billions of dollars of potential savings. But by far the biggest upside to profit is new and incremental sales. As L. Hunter Lovins, the sustainable icon and co-author of the Magnum Opus, Natural Capitalism, is fond of saying, "The companies and individuals who embrace sustainability today will be the billionaires of tomorrow." She finishes that statement with a warning from Ed Woolard of Dupont, "Don't worry about those that don't--they won't be around much longer!"

In short, the WHY JOIN question can be answered by our mission statement. We will help companies produce products which are good for the planet, good for people and also profitable to produce AND we will help promote the category of Ecological Foods. We are the only organization to take this all encompassing approach. EFMA is the one stop shop for the sustainable food industry. We will work with as many sister organizations as possible--but we'll focus on helping our members make money by doing the right thing.


EFMA has launched its own food initiative campaign, starting with Food Initiative 2010. The idea is for wholesalers, retailers and manufacturers to work together to identify and prioritize the details of the food industry sustainability management plan. Again, others have approached the subject and claim to be working on it. The difference is the methodology. While other organizations continue to hold summits and conferences so members can hear from experts in the sustainability field, EFMA declares that THE EXPERTS ARE IN THE ROOM! No one knows more about the food industry than the wholesalers and retailers and manufacturers who have created it. Our approach is to start with five categories: Waste, Resource Use, Climate Change, Health and Fair Trade and choose one initiative from each category that the entire industry can work on together.

If we continue to approach the complex issues of sustainability as separate entitities, all with our own marketing agendas, we'll waste an enormous amount of time, energy and money. But if we take small bites out of it, while holding hands, we'll be swift and effective. If the scientists are correct, that our most serious threat is climate change, and if they are also correct that we have fewer than ten years to get this right, we really need to be moving together, STARTING NOW.

SESNE Score (Standards of Excellence in Safety, Nutrition and Ecology).
The standards and metrics which Mr. Young mentioned in his article, quoted in the start of this piece, will be a natural part of product development for the food industry. As we create ecological foods in closed loop systems, from our green buildings, which are packaged and distributed in new ways, we need a process, to demonstrate to consumers, which products are best. The task of creating standards and metrics is being attacked by hundreds of groups, consortia, colleges and individual companies.

There are marketing programs such as Smart Choices (which claim sugary cereals as healthy) and legitimate efforts from such organizations as ANSI (American National Standards Institute), with dozens of others in between. EFMA will serve as a liaison for the third party that will work with the ENTIRE industry. We may as well face the fact that the cost of this assessment will rest on the manufacturers.

There is hot debate about multiple standards (such as SESNE) as opposed to single standards (Life Cycle Assessment, social impact, green house gas emissions, water use, nutrition, safety). EFMA feels that a simple to understand number of five digits, with the first number between 1 to 9 showing safety, the next two numbers to 99 rating nutrition, and the last two digits also to 99 measuring the total ecological and ethical value will be a valid universal guide for consumers to identify safe, nutritious, good-for-the-planet foods. The technology and the ability to rate foods, according to these standards is available NOW. We shouldn't wait for the government or for one major player to make the rules.

  • SAFETY. EFMA feels that the first criteria for Ecological Foods should be safety. If a food isn't safe, then why is it allowed to be produced? Moreover, there are degrees of safety from foods produced by traditional agriculture using pesticides to foods with questionable additives such as petroleum based food colorings. Much of this information is not available about foods. In some cases the industry and the government have made it difficult to find out.

    NUTRITION. Closely related to safety is nutrition. We know that 1/2 to 2/3 of our health care crisis is directly related to diet. We also know that the food industry is implicated because of the choices of foods which are available. The diet of many Americans is unhealthy because of the abundance of "cheap calorie" foods. As more nutritious choices are available, the rules of the marketplace will bring down prices of nutritious alternatives.

    ECOLOGY. Both safety and nutrition are connected to ecology because a healthy ecosystem includes healthy humans, but the final test of a product's worthiness, when viewed by its ecological value, will be the environmental and social impact created by making it. We feel that one index, covering all three areas and taking only the space of five digits, will be the best standard for consumers.

From the June 2009 Workshop Report from the American National Standards Institute, entitled, TOWARD PRODUCT STANDARDS AND SUSTAINABILITY, this was the most important point which received unanimous consent:

Panelists agreed that while there are various approaches to standards development, the single most important component of a successful
standard is participation by an inclusive set of stakeholders.

It was announced in July 2009 that Walmart's products will display sustainabilitindex to rate the environmental impact from design-to-disposal of every product it sells. Though the claim is that this will be an industry index, many show concern that the conversation should be widened beyond those currently included in the Walmart consortium.

All manufacturers will be required to comply with the LCA (Life Cycle Assessment) process or they will be eliminated as Walmart suppliers. Many questions arise about the implications of this announcement and the bearing this will have on the food industry. For one, the obvious concern by other retailers is how this will affect market share. Currently, Walmart has the enviable position of selling nearly 1/3 of all the food which is purchased in the U.S. Will Walmart's push for this label enable Walmart to continue to outdistance other retailers, thereby widening the gap between them and other chains? And what will this mean for the hundreds of thousands of independent grocers? Will they loose business by not being able to participate in a sustainability conversation with manufacturers because their buying power will limit them?

EFMA would like to see such an index be a true industry index, in which all stakeholders will be involved in the process to score products for consumers. By working with wholesalers, retailers and manufacturers, including Walmart but not under the control of Walmart, the industry will be well prepared to supply thoroughly researched and transparent guidelines to help consumers make well informed purchasing decisions.

For more information about EFMA, see http://www.ecofma.com/ and for more information about Food Initiative 2010, see http://www.foodinitiative.com/.

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