Making sense of sustainability seals

by Jeff Gelski
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Prescott Bergh, director of marketing for Ciranda, Inc., Hudson, Wis., sees similarities between the recent focus on sustainability and the continuing focus on another environmental trend, one that began several years ago.

“It’s equivalent to where organic was 30 years ago,” he said of sustainability efforts. “There are a lot of independent, third-party standards.”

Unlike the organic industry, which now has mainly a seal from the U.S. Department of Agriculture’s National Organic Program to place on products, the sustainability trend comes with an array of certifications and seals, including those for ingredients used in grain-based foods. For example, Utz Certified and Fair Trade seals may be used with cocoa, and the Roundtable on Sustainable Palm Oil endorses a GreenPalm seal.

“I think eventually there will have to be some convergence on standards,” Mr. Bergh said.

The move toward food products produced in a sustainable manner may continue. Innova Market Insights listed sustainability as one of the top 10 trends that will impact the market in 2010. Consumers are looking for more locally sourced and Fair Trade products, according to Innova Market Insights.

In 2009, Wal-Mart Stores, Inc., Bentonville, Ark., announced plans to develop a worldwide sustainable product index. The company met with 1,500 of its suppliers, associates and sustainability leaders.

“We do not see this as a trend that will fade,” said Mike Duke, president and chief executive officer of Wal-Mart.

The company sent a survey on the subject to suppliers that included 15 questions. Two of the questions pertained to natural resources, and thus ingredients, too. One question asked, “Have you established publicly available sustainability purchasing guidelines for your direct suppliers that address such issues as environmental compliance, employment practices and product/ingredient safety?” Another question asked, “Have you obtained third-party

certifications for any of the products that you sell to Wal-Mart?”

Sustainability concerns such as fair prices for farmers and growing practices that do not harm the environment may resonate with consumers, but how well do they understand sustainability? Marketing messages to reach those consumers still may be in the developmental stages.

The Hartman Group, Inc., Bellevue, Wash., released “Sustainability: The Rise of Consumer Responsibility” in January 2009. The report said, “Not only is the word sustainability seldom used in consumer circles, but when pressed, many individuals are unsure of what it means.”

Yet the report takes all of Chapter 5 to explain sustainable foods and beverages and states, “Consumers view the category as salient to all zones of sustainability, and in fact consider the category as one of the most important sustainability issues. The direct connection made by consumers between food and the earth make the environmental zone of sustainability top of mind for consumers inside the world of sustainability.”

The term “greenwashing” refers to making sustainability claims that fail to hold up under scrutiny. Suzanne Shelton, president and c.e.o. of Shelton Group, an advertising agency in Knoxville, Tenn., that conducts consumer opinion studies, wrote about that topic in a Dec. 21 on-line article in Environmental Leader.

“In one of our recent studies, we saw a jump in the number of people who said they’d both stop buying a product — and lobby friends and family to do the same — if they were told something was green that turned out not to be,” she wrote. “Unfortunately, this puts consumers in the box of impossibility: Our studies find shoppers don’t know how to define what a green product is.”

A definition for sustainable development does come from the IDB Group, which provides financing to support the process of economic and social development in Latin America and the Caribbean. According to IDB, sustainable development is captured in the concept of a triple bottom line, or the economic, environmental and social effects of a company’s activities. It recognizes a business must be successful financially to be sustainable.

One international baking business is taking on that challenge. Lantmannen Unibake, a bakery group based in Stockholm, Sweden, has an objective to reduce its climate impact by 20% by 2012. The bakery group will focus on sustainability in the four main areas of ingredients, energy, transport and packaging. To help achieve the objective, the company has appointed Gustav Tynelius as sustainability manager. He received a degree in environmental engineering from Lund University in Sweden and a degree in agricultural engineering from the Swedish University of Agricultural Sciences.

Lantmannen Unibake USA, Lisle, Ill., is a subsidiary of Lantmannen Unibake, which operates 15 bakeries in 12 European countries.

Certifying palm oil and cocoa

Grain-based food companies in both Europe and North America may seek third-party certification. Such certification already exists for palm oil and cocoa.

The sustainable palm oil movement gained steam in December. London-based Unilever P.L.C. suspended all future purchases of palm oil from the Indonesian company PT SMART, part of the Sinar Mas group, until the company is able to provide verifiable proof that none of their plantations are contributing to the destruction of high conservation value forests and expanding onto peat lands.

Unilever belongs to the Roundtable on Sustainable Palm Oil, a global initiative that has more than 400 members, including oil palm growers, oil processors, food companies, retailers, non-government organizations (NGOs) and investors. The R.S.P.O. promotes palm oil production practices that help reduce deforestation, preserve biodiversity and respect the livelihoods of rural communities.

The R.S.P.O. has ramped up supply of its certified palm oil, and now its oil processor members are looking for buyers. Midway through 2009, plantations certified through the R.S.P.O. were able to supply 1.75 million tonnes of sustainable palm oil per year. By October 2009, only 195,000 tonnes of certified sustainable palm oil had been traded.

Archer Daniels Midland Co., Decatur, Ill., also belongs to the R.S.P.O. The company teamed with the Business for Social Responsibility in 2008 to conduct a review of sustainability issues surrounding its entire business. The assessment revealed the need to concentrate companywide on supply chain integrity, water resource management and climate change. ADM thus set up a Sustainability Steering Committee comprising senior executives.

Danisco, Copenhagen, Denmark, belongs to the R.S.P.O. This year the company introduced sustainable emulsifiers that are based on sustainable palm oil or sustainable palm kernel oil. By purchasing certificates for sustainable palm oil through a GreenPalm portal, Danisco is able to support the production of palm oil verified by the R.S.P.O. and is entitled to sell palm-based products to customers with a supporting sustainability claim. The R.S.P.O. endorses this GreenPalm certificate.

Danisco focused on a number of ingredients and product categories this year when it launched a web site at www.danisco.com/climate. The site offers more than 70 ways to help the food and beverage industry combat climate changes by reducing carbon emissions and consumption of natural resources. The recommendations include those for grain-based foods and such applications as tortillas, bread, snacks, cakes and tortillas, said Helle Tornaes, regional industry manager at Danisco.

“Consumers are getting more and more concerned about the environment and want to have more sustainable solutions,” she said.

Ingredients that extend shelf life are examples of sustainable benefits. For example, the DIMODAN distilled monoglycerides, a brand of Danisco emulsifiers, may be used in combination with enzymes to prolong shelf life, thereby reducing the number of returns from the shelf and, in turn, reducing fuel consumption and air pollution. Another Danisco product, the GRINDSTED Pro 45 encapsulated system, has been shown to reduce proofing temperature and time, which lowers energy consumption.

Ms. Tornaes added Danisco will continue to take sustainability into account when launching new products. In

regard to the grain-based foods industry, Danisco in 2010 will focus on ways to reduce product doses, especially ingredient doses, by as much as 50%.

Cocoa is another ingredient used in grain-based foods that made sustainability news in 2009. The Utz Certified code of conduct for cocoa launched this year. The code set economic, environmental and social criteria and required farmer training.

Two cocoa-producing farmer cooperatives in the Ivory Coast — Co-operative Agricole de Fiedifoue and Coopaga — became certified under Utz this year. Cargill Cocoa & Chocolate received the first cocoa beans produced from the Utz Certified farmer cooperatives in November.

Barry Callebaut, Zurich, Switzerland, recently joined the Utz Certified cocoa program.

“By participating in the steering group for the Utz Certified cocoa program, we aim to make a meaningful contribution to the collective efforts under way to help farmers in some of the poorest countries in the world,” said Steven Retzlaff, president of Global Sourcing & Cocoa, Barry Callebaut.

While not a grower of cocoa, ADM, Decatur, Ill., is active in sustainable cocoa production. The company works with the World Cocoa Foundation, governments, non-government organizations and labor experts to design and implement a process to certify that efforts are in place to measure and report on labor practices.

ADM in February of 2009 joined the World Cocoa Foundation, the Bill & Melinda Gates Foundation and several cocoa and chocolate industry participants to announce a $40 million program to improve the livelihoods of about 200,000 cocoa farming families in the African countries of Ivory Coast, Ghana, Nigeria, Liberia and Cameroon.

Fair Trade groups, though known more for certifying coffee, have expanded in cocoa. The United States imported 3,847,759 lbs of Fair Trade cocoa in 2008, up from 1,951,400 lbs in 2007.

“That organization (Fair Trade) deals exclusively with farmer co-ops and works primarily in cocoa and tea and coffee,” Mr. Bergh of Ciranda said. “They are expanding into other products.”

He added, “A lot of producers in the world aren’t co-ops, but they are doing similar environmentally and socially beneficial things.”

For those producers, IDB, a Brazilian company and organic certifier, offers the EcoSocial seal. When manufacturers participate in the EcoSocial certification system, their customers will know the extra costs they pay for certified products will be used to help improve life quality and environmental conservation.

“In other words, by buying EcoSocial certified palm oil, companies and consumers can contribute to ecologically sustainable and socially fair development in the region, confident that the projects will be carried out by Agropalma and audited by IDB,” said Tulio Dias, social and environmental responsibility manager for Agropalma.

Ciranda ingredients certified as EcoSocial include tapioca syrups and palm shortenings and oils. The Agropalma Group, Sao Paulo, Brazil, produces the shortenings and oils. Ciranda distributes them under the PalmFruit brand in North America.

ADM also has set up sustainable activities in Brazil. ADM in 2006 joined with NGOs and other agribusinesses to impose a moratorium on the purchase of soy grown in newly deforested regions of the Amazon biome.

“While the moratorium has made significant progress, we at ADM share the view that conditions do not yet warrant its suspension, which is why our company supported an extension that will keep the ban in place through 2010,” ADM said.

The company runs “Doing it Right,” a program to encourage Brazilian soy growers to adopt sustainable farming practices. Under the program, increasing yields in sustainable, environmentally responsible ways may help minimize further expansion into environmentally sensitive areas.

What about in-house?

Besides choosing an ingredient supplier that sources raw materials in a sustainable manner, grain-based foods companies also may be interested in the in-house sustainable practices of suppliers.

Danisco has such in-house sustainability goals as reducing water use by 5% per kilogram of product in 2010 using 2007 as a baseline and reducing energy use by 10% per kilogram of product in 2010 using 2007 as a baseline.

Danisco established a corporate sustainability development organization in 1999 and has published an independently verified sustainability report since 2001. The Dow Jones Sustainability Indexes have recognized Danisco since 2002.

“Danisco has a very, very strong story to tell in terms of sustainability because it has been part of our culture for a very long time,” said Rob Slemmons, manager of marketing communications for Danisco. “That may be because we are a European-based company.

“It’s certainly not a bandwagon that we are jumping on. It’s something we’ve been working on for quite a number of years.”

Work on the sourcing of sustainable ingredients may continue for a number of years for the grain-based foods industry as a whole.

A sampling of sustainability seals

Certification programs that pertain to sustainable sourcing of ingredients used in grain-based foods:

EcoSocial — IDB, a Brazilian company and organic certifier, offers the EcoSocial seal. When manufacturers use the seal, their customers know the extra costs they pay will be used in actions for improving life quality and environmental conservation. The seal has been approved for such ingredients as cane sugar, soybeans, vegetables, palm oil and honey. EcoSocial certified operations exist in China, Thailand, India, Belgium, Holland, Brazil, Paraguay, Canada and the United States.

Fair Trade — While Fair Trade coffee is better known, the volume of cocoa certified as Fair Trade has grown. The United States imported 3,847,759 lbs of Fair Trade cocoa in 2008, up from 1,951,400 lbs in 2007. The Fairtrade Labeling Organizations International (FLO) is a collection of 24 organizations working to secure a better deal for producers. The FLO sets international Fair Trade standards. TransFair USA is the only third-party certifier of Fair Trade products in the United States.

Roundtable on Sustainable Palm Oil — The global initiative has more than 400 members, including oil palm growers, oil processors, food companies, retailers, non-government organizations (NGOs) and investors. The R.S.P.O. promotes palm oil production practices that help reduce deforestation, preserve biodiversity and respect the livelihoods of rural communities. The R.S.P.O. endorses a GreenPalm certificate.

Utz Certified — The Utz Certified Good Inside program seeks to achieve sustainable agricultural supply chains where farmers are professionals implementing good practices, where the food industry demands and rewards sustainably grown products, and where consumers buy products that meet their standards for social and environmental responsibility. Utz Certified offers certification programs for coffee, tea and cocoa and manages traceability for palm oil certified by the R.S.P.O.

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