WASHINGTON — With retailers steadily ramping up pressure on food companies to track and improve sustainability efforts, the baking industry and its suppliers have begun exploring ways to cooperate in order to deal effectively and efficiently with the rapidly changing environmental landscape.
The cooperative efforts were a primary topic of discussion Sept. 15 at a joint board of directors meeting in Washington between the American Bakers Association and the Allied Trades of the Baking Industry. The groups are establishing a joint task force to create a common scorecard to measure progress in sustainability around a range of topics from energy and water use to packaging.
In a recent interview, Robb MacKie, president and chief executive officer of the A.B.A., said the decision to focus on sustainability reflected the imperatives established by the industry’s largest customers.
"Wal-Mart, Kroger, Safeway and others are driving that train," he said of increasing interest in sustainability. "We got together for a discussion about whether we could come up with some common industry measuring sticks. There is much discussion about sustainability scorecards. Bakers are developing scorecards, and this work is flowing to suppliers."
Also participating in the interview were Gary Edwards, president of Lallemand, Inc., Memphis, representing the A.T.B.I., and Kenneth (Chip) KlostermanJr., president of Klosterman Baking Co., Cincinnati, and chairman of the A.B.A. Mr. Edwards said the downstream impact of sustainability initiatives is being felt acutely by baking industry suppliers.
"Whether it is around carbon footprint, solid waste streams, water use or other factors, the allied suppliers are receiving requests from bakers," Mr. Edwards said. "Then we have to drill down to our suppliers. Our concern is that all the different retailers may develop different criteria for measurement, so we are trying to come up with a common method and metrics so that when I get a call from a baker asking for data, I will have what they need. When I get a different call the next day, I will be filling that request from the same pool of information."
Mr. MacKie said retailers are seeking to use sustainability "as a positive" to enhance their image with customers. He said the baking industry needs to accommodate its customers but also wants to avoid a situation where changes are mandated by government.
"We can’t ignore that government is looking to step into this arena," he said. "We need to get to a common platform to avoid the heavy hand of the government."
Mr. Klosterman said bakers are motivated to act on sustainability issues not only because of regulatory concerns and pressure from suppliers.
"From a baker’s standpoint, sustainability is just good business," he said. "Baking companies are working on ways to save on energy costs, eliminate waste, reduce emissions and improve productivity. Yes, the customers are asking and they are right to ask. But bakers are focused on sustainability on their own."
Mr. Klosterman said the joint A.B.A.-A.T.B.I. effort is part of broader networking activities around sustainability that also involve a range of entities from BEMA and AIB International to local utilities.
"Everyone is working toward the same objectives," Mr. Klosterman said.
The A.B.A.-A.T.B.I. process should move forward rapidly in the next several months, Mr. MacKie added.
"A joint task force is being created to work through the matrix and develop a common scorecard," he said, adding that the roster of the group was still being finalized to be sure various segments of the baking and allied industries are appropriately represented.
"The A.B.A. Energy and Environmental Health Committee is very engaged at a highly technical level on sustainability," he said. "They will drive this process from the A.B.A. side together with a couple of senior baking executives who have demonstrated an interest."
Elaborating on the process that will be followed, Mr. MacKie said a draft scorecard will be prepared by the A.B.A. annual meeting in March 2010 to be considered by the board. In addition, the A.B.A. will work with the Food Marketing Institute and the National Restaurant Association to extend the reach of the sustainability effort beyond supermarkets. Meanwhile the process will be done in conjunction with a Grocery Manufacturers Association effort currently under way with the same focus.
From the allied perspective, Mr. Edwards said participation will include more than representatives of the ingredient segment.
"There is a three-legged stool from the supplier side — equipment makers, packaging and ingredients," he said. "Each has a major impact on sustainability issues, and each needs to work with the bakers. We need to work together to get ahead of this.
"We are not looking for a single scorecard. There will be differences. We want common elements for the response."
Mr. MacKie added, "This is basic stuff. When is the baseline year? Do we look back three years? Five years? How do we measure steps taken?"
In the end, Mr. Klosterman sees value in the cooperative process itself.
"This initiative gives us a chance to work more closely with our suppliers and our customers, which is a plus," Mr. Klosterman said. "Whether around sustainability or legislation, working together is the way to go to get things done."