Extreme weather and an alarming United Nations report released this summer on climate change have prompted fresh scrutiny of environmental goals. The coronavirus (COVID-19) pandemic laid bare global inequities. Increasingly, consumers are expecting large businesses to demonstrate leadership and take meaningful steps toward addressing these problems in the world.
“Likely because of this feeling that they have limited ability to impact change, consumers are looking for companies to lead the charge in creating sustainable products,” said Britt Calvert, director of innovation at the market research firm Ipsos.
In fact, in the firm’s research on consumer attitudes toward sustainability, 39% of respondents said companies are responsible for ensuring consumer products are environmentally and socially responsible, compared to 26% who laid that responsibility at the feet of government and 13% who chose the consumers themselves.
But what does environmentally and socially responsible even mean these days? Bakeries and large consumer packaged goods (CPG) companies have had sustainability plans in place for decades, but the definitions continue to expand as new issues arise.
As the news and market research demonstrates, sustainability appears poised to grow in importance and complexity. Sustainability once referred to the energy and water consumption of a plant. Today it touches every aspect of a company and requires coordinated efforts across industry to make a difference. And food manufacturers, bakeries and other CPGs are uniquely positioned to make a significant impact on the problems that fall under the umbrella of sustainability.
Consumers want to support companies that are trying to do the right thing, but the right thing has grown, especially in the past year.
“The scope of what consumers expect from brands has expanded with COVID-19 shining a light on social and economic inequalities,” Ms. Calvert said. “Some consumers are being more thoughtful of what they’re buying and where they’re buying it from, perhaps supporting a local or minority-owned business or using their buying power to support brands with an ethos similar to their own.”
Sustainability now encompasses not just environmental concerns but also issues of economic equity and even access to good nutrition. In fact, Ipsos’ research found that two-thirds of US consumers believe brands that contribute positively to society will be the most successful in the long run.
When it comes to the environmental impact of food and grocery companies, consumers’ top concerns revolve around sustainable packaging and limiting food waste. On a human level, consumers expect companies to offer fair wages and provide safe working conditions for their employees, even more spotlighted due to the pandemic.
Grupo Bimbo SAB de CV, Mexico City, is well-known for its robust, expansive sustainability program. The largest baking company in the world often highlights its efforts to create a sustainable, highly productive and humane company. It does this by focusing on four pillars of sustainability: Community, Associates, Health and Wellness, and Planet. Its planet pillar is aligned to the UN Agenda 2030 and focuses on cleaning up the company’s impact not only through sustainable packaging but also energy consumption, water usage and sustainable sourcing.
In the company’s annual report for 2020, it outlined its commitment to competitive wages and benefits as well as a goal of 25% representation of minority groups among candidates for each vacant position. When it comes to creating a safe workplace, Grupo Bimbo reported that it saw a 22% reduction in the number of workplace injuries in 2020, and days lost due to work injuries fell 8% compared with 2019. The company goes beyond simply protecting employees from injury. It also has programs in place to encourage healthy physical and mental well-being as well as protecting its employees from the coronavirus.
Through Grupo Bimbo’s Good Neighbor program, volunteering and Social Investment programs, the company not only financially invests in its communities around the world but also encourages its employees to get involved.
Having an interconnected sustainability program with measurable results can prove to skeptical consumers that a company isn’t simply “greenwashing.” Ipsos surveys show that a third of consumers don’t believe labels like fair trade, sustainable and organic make a difference or are even true.
“Now with the digitally connected generations, they can just read through marketing campaigns and dissect labels,” said Siobhan Kelly, agribusiness economist, food systems and safety division, Food & Agriculture Organization of the United Nations (FAO). “Companies need to respond to these much more discerning and informed consumers.”
It’s important to point out, however, that while sustainability is important to Generation Z and millennials, it’s not the be-all and end-all. Taste is still king when it comes to decisions around purchasing food.
“The benefits beyond the gustatory are added value for consumers but won’t be the sole reason for buying or re-buying these products,” Ms. Calvert said. “We have research on research that shows when things are held in constant, people are more likely to choose the sustainable option. They’re even willing to pay a little bit more for it. But choices get more complex when more factors come into play.”
Sustainability is a complex challenge for food manufacturers and will only become more important as consumers become more aware of the issues that fall within its scope. Bakers and other food manufacturers might not see an immediate payoff from purpose-driven business strategy, but for the long game, it’s going to be a critical part of business.
“In order to be around for the long run, your business must be sustainable,” Ms. Calvert said. “As a manufacturer, you have a choice. You can decide that you will wait until you are told you need to take more sustainable actions, either by legislation or by your consumers, or you can decide what sustainability looks like for you on your timeline.”
This article is an excerpt from the October 2021 issue of Baking & Snack. To read the entire feature on Sustainability, click here.