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Friday Round-up (8/7/20): Sustainability Continues to be a Pillar of Food Industry Growth


Every week FoodLogiQ will be aggregating the latest updates and resources for businesses navigating the changing food industry. Learn how the industry leaders are adapting to protect and feed consumers, while building resilience in the face of global crisis.

As the food industry grapples with the continued impacts of the COVID-19 pandemic, many have wondered how food sustainability will be impacted by the crisis in the near and long term. Top concerns for consumers have pivoted strongly towards safety and speed, and some have even welcomed the return of less sustainable practices, like additional protective packaging, which were falling out of vogue prior to the coronavirus outbreak. However, general sustainability trends that were gaining momentum in the years leading up to the pandemic have not ceased, with new reports showing that sustainability markets remain resilient in the new normal.

In July of 2020, NYU Stern Center for Sustainable Business, partnering with IRI®, released an update to a seminal 2019 report on sustainability purchasing trends in the CPG space. The report, Research on 2015-2020 IRI Purchasing Data Reveals Sustainability Drives Growth, Survives the Pandemic, finds that, “sustainability marketed products continue to grow despite the COVID-19 pandemic.” Looking at data from previous years, it has become increasingly clear that consumers are sensitive to the environmental impact of products, and are willing to pay premiums to support sustainability. The report shows that while sustainability-marketed only comprise 16.1% of the market, “they delivered 54.7% of the CPG market growth (2015-2019).” And, despite a tumultuous first half of 2020, sustainability-marketed products are up .6pts compared to 2019, according to the report. This may play a role in initiatives to reduce environmental impacts and partner with sustainability innovators that many food companies are promoting. 

For many companies, sustainability continues to play a central role in the evolution of their brand promises. Ahold Delhaize, for example, has announced a significant pledge to reduce their carbon footprint. The major retailer has committed to cutting carbon emissions by 50% from numerous divisions by 2030, compared to a 2018 baseline. Suppliers for the company will also be held accountable to a 15% reduction of their own carbon footprint. “Climate change is impacting our planet and how our food is grown, and it will continue to change our business into the future,” said Frans Muller, CEO of Ahold Delhaize in the company’s press release. “By setting ambitious new targets and by becoming a supporter of the Task Force on Climate-related Disclosures, Ahold Delhaize is committing to taking a leading role in mitigating this global crisis and preparing for a more resilient and healthy future”.  This pledge follows a July 30th press release from the company announcing numerous new sustainability policies related to GMO labeling and animal welfare.

The darling food sustainability innovation continues to be the plant-based protein industry, which has seen major successes in recent months. Plant-based protein manufacturer Beyond Meat, which made tremendous efforts this year to pivot from foodservice to retail, has seen a 69% increase in net review compared to last year, according to CNBC. CEO Ethan Brown explained the brand's growth in the retail sector, saying, “If you look at the buyer rate for households, not only are more households coming into the brand, but they’re also now spending more per household on our brand.”

Impossible Foods is also making major moves in the retail space, announcing two significant partnerships with retailers Walmart and Publix. Impossible's President Dennis Woodside credits consumers, saying, "Impossible Foods' fans are passionate, vocal advocates. Many of them have been specifically asking for Impossible Burger to come to Publix." The brand has already increased their brick and mortar presence by 60x, according to vegconomist. Impossible Foods also recently launched a direct-to-consumer e-commerce site, which it announced on June 4th.

Some brands are leaving no stone unturned when it comes to sustainability. Chipotle made headlines this week for a unique initiative to reduce food waste: using avocado pits for their Chipotle Goods sustainable fashion brand. The company will put the 300 million avocado pits left over from their annual operations to use in the form of clothing dyes for their sustainable clothing brand, according to Mashed. The Chipotle Goods site reads, “Our aim is to not only be less wasteful, but also climate positive as we close the loop on food and fashion-which means, we aim to do good when it comes to the environment and social impact around the world.”

Resources

View FoodLogiQ's COVID-19 Food Industry Resource Center for industry-specific updates, resources and information on the coronavirus crisis. For supply chain traceability and risk mitigation guidance, see our general Resource Center.

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Posted by Anna Ploegh on Aug 7, 2020 5:39:07 PM

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