Sustainability is well beyond a buzzword or trend.

It is now a core business strategy for major retail and foodservice chains and branded food manufacturers.

Getting strategic about measuring sustainability

Tim York
Markon Cooperative

While Wal-Mart is the most notable company asking its suppliers for social and environmental data, this is only the beginning.

This year, we’ll see more high profile branded companies — most recently Procter & Gamble — pushing for data collection on use of energy, water and materials down the supply chain.

Why?

First, there’s pressure from Wall Street to demonstrate social responsibility, but beyond that, when buyers look at their operations through a sustainability lens, they find business value. When Wal-Mart, legendary for its attention to efficiency, turned the sustainability lens inward, it found opportunities to save money through improved energy efficiency, reduced waste and improved employee engagement.

Jeff Dlott
SureHarvest

Now there are more retail chains, foodservice chains, foodservice distributors and branded manufacturers looking to expand those efficiencies down the supply chain. Pressure on grower suppliers is mounting, and we’re likely to see the same story unfold as growers find their own cost savings with sustainability initiatives.

Seeing the sustainability train rolling down the tracks three years ago, we became very concerned that we’d end up seeing the same kind of proliferation of audit schemes for sustainability that we saw for food safety.

It’s only strategic for the produce industry to want to get engaged early on and lead the process of defining credible sustainability measurement tools that make sense to grower-shippers and buyers, and are meaningful to the end consumer.

As we’ve found with food safety, multiple systems are just too costly. We were in search of a common set of metrics — specific, measurable and verifiable metrics — that we could tailor by commodity as needed.

Markon Cooperative and SureHarvest invested in a pilot project with several Markon produce grower-shippers, and it quickly became apparent that the magnitude of developing this kind of system was beyond our reach. 

So we reached out to four stakeholders — representing grower trade groups (Hank Giclas of Western Growers and Karen Ross, then head of the California Association of Winegrowers) and nongovernmental organizations (Jonathan Kaplan of Natural Resources Defense Council and Hal Hamilton of Sustainable Food Lab), to join us in founding the Stewardship Index for Specialty Crops.

The initial half dozen stakeholders soon grew to 30, forming the coordinating council made up of buyers, suppliers, NGOs and experts that serve as the stewardship index’s decision making body. 

Testing, review

A metrics review committee was also formed to work on developing specific metrics. This group has grown to more than 400.

For three years, we’ve been working on a suite of outcomes-based metrics to enable operators at any point along the supply chain to benchmark, compare and communicate their own performance.

Importantly, the stewardship index will not define performance standards but instead provide a yardstick for measuring sustainable outcomes. The goal is to have one common set of metrics used by all participants in the specialty crop supply chain. If there are performance standards, those will be set by the market.

We have begun pilot testing draft metrics this spring with more than 90 grower operations covering 17 crops spread across 15 states. We’re evaluating the feasibility, cost and usefulness of the metrics from the grower’s and buyer’s perspective. The draft metrics will be revised and go through another round of piloting.

Once we have performance metrics that are feasible and cost-effective, growers will be able to measure efficiencies in water, energy, fertilizers and waste.

For example, processing tomato growers in California will be able to measure water use efficiency per ton of crop and compare themselves to industry averages.

With measurement, attention can be directed to finding innovative ways to save costs by optimizing water use. Metrics are also being piloted on water quality, biodiversity, air quality, soil quality and pesticides.
Metrics for packaging, greenhouse emissions and human resources will be added in the future.

Sustainability performance measurement and reporting has already become common for retailers, restaurant chains and consumer products marketers. 

Measurement and reporting soon will become an integral part of doing business at all tiers of the supply chain. The opportunity to get ahead of the curve and align with supply chain partners with a system that is specific, measurable and verifiable is designed to add value to grower operations.

Sustainability begins with profitability, and there are financial rewards to be harvested.

Tim York is chief executive officer of Markon Cooperative, a produce-purchasing agent for leading independent foodservice distributors based in Salinas, Calif.

Jeff Dlott is chief executive officer of SureHarvest, an agri-food management software and sustainability service company in Soquel, Calif.

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