The retail industry has been slow to embrace the environmental, social and financial benefits of sustainable practices, though momentum is building globally and locally.
Ahead of a new project by The Fifth Estate to focus on the sustainability of the retail sector, and how it can navigate the future sustainably and profitably, we’ll be sharing some of the major trends in the industry.
Following is part 2 in a three-part series on global retail sustainability trends, with insight from Sustainable Business Australia chief executive Andrew Petersen and brand consultancy We First chief executive Simon Mainwaring.
Read Part 1.
Mega-trend 2: Recycling and upcycling
Simon Mainwaring points to H&M as an example of a global fashion retailer that has been building an environmentally conscious industry reputation through a consumer-inclusive mentality.
Their garment collection program, which launched in 2013 and is available in Australian H&M stores in major capital cities, has gathered more than 22,000 tons of otherwise wasteful materials (fabric equivalent to 100 million T-shirts). The clothes are resold, reused as cleaning cloths, or recycled into textile fibres.
“As the fast fashion industry is one of the worst waste offenders, this move recognises that there is another solution and it can be as simple as dropping off old clothes as you shop for new ones,” Mainwaring says.
Whole Foods, a notable sustainable US retail leader in the organic and local food movements, is providing designated recycling collection points for used batteries, cork, plastic bags, water filters, yoghurt cups and other #5 (polypropylene) plastics. Major Australian supermarkets are catching on with Coles and Woolworths providing soft plastic collection points and Aldi collecting batteries.
Mega-trend 3: Slashing food waste
Food waste reduction has become a hot issue across the globe. Denmark is leading the charge with the world’s first-ever food surplus supermarket opening in Copenhagen. WeFood partners with major supermarket chains, butchers, fruit importers and “nut bars” to collect out-of-date, damaged or left-over food to sell up to 50 per cent cheaper than regular supermarkets.
France has introduced a fine for supermarkets that waste or dump edible food, while Italy is providing incentives for supermarkets, restaurants and cafes – such as garbage tax reductions and waiving the need to declare donations in advance – to increase food donations. Innovative Dutch company Kromkommer is turning “ugly” veggies that retailers have rejected into premium soup.
In the US, the states of Connecticut, Massachusetts and Vermont are leading the way, banning the disposal of organic matter in landfills, challenging business as usual in the country where 52 million tons of food is sent to landfill a year, while another 10 million tons is discarded or left unharvested on farms.
US-based think tank reFED recently released a road map aimed at reducing food waste by 20 per cent. It advocated standardised date labelling, smaller plates in restaurants and consumer education, as well as effective policy and tax incentives to encourage food bank donations.
Andrew Petersen says Australian businesses should take note of the huge environmental, social and financial opportunities flagged in the report.
“It was looking at the opportunities for the food sector in relation to the reduction in food waste – $US100 billion in economic value over the next 10 years, an 18 million ton [16.3 million tonne] reduction in greenhouse gas emissions and, critically, the creation of 15,000 jobs,” he says.
“Just by looking at and analysing the key stress points in the environmental variables. Businesses looking at those strategies will build greater value where they are more sustainable and that is particularly true in areas like food and apparel.”
Australian businesses are already involved in non-mandatory food reallocation, Petersen says.
Food rescue organisation OzHarvest recently teamed up with the United Nations Environment Programme and Food Agriculture Organisation Global Initiative on Food Loss and Waste Reduction to lead the 2016 Think.Eat.Save campaign in Australia.
Volunteers in seven cities served free soup and stews made from produce that would have ended up as landfill – a problem that costs Australians up to $10 billion annually. Markets and supermarkets have supported SecondBite’s distribution of more than 12 million kilograms of food nationally to more than 1200 community food programs over a decade. Qantas donates non-perishable food items from domestic services to OzHarvest for school breakfast programs in Sydney.
“Do we need to mandate these things? Ideally no,” Petersen says. Rather we need to encourage and incentivise businesses to scale up and accelerate food reallocation.
Mega-trend 4: Social impact
Retail businesses can do so much more than generate income.
“Retailers are recognising that traditional business models can be updated to meet social needs,” Mainwaring says.
For instance, US bakery chain Panera Bread has introduced Panera Cares, a non-profit community café concept with the mission of raising awareness around food insecurity in the US. Its “pay what you can” model enables customers to pay it forward to feed hungry people as well as keep the business running.
“Another example is Ben & Jerry’s PartnerShop Program where non-profits own and operate ‘scoop shops’ to help support community benefits,” Mainwaring says. The ice-cream giant waives franchise fees and provides additional support to help charities. The PartnerShops offer job and entrepreneurial training to youth and young adults who face barriers to employment.
In Melbourne, social enterprise STREAT launched a coffee cart in 2010 to provide training and work experience to homeless or disadvantaged young people. GPT Group welcomed the concept into Melbourne Central shopping centre and STREAT has since expanded to cafes in McKillop Street, Freshwater Place and RMIT University as well as catering, coffee roasting, hospitality courses, work experience opportunities and a creative arts program. They were a winner at the 2015 Australian Social Enterprise Awards.
Mega-trend 5: Going glocal
Glocal means to reflect or characterise both local and global considerations.
“Glocalisation” is changing the retail landscape as it combines the strength of global brands, products and services with a customised approach for the local market. For example, McDonalds has created new rice meals for its emerging markets India and China. However, to be sustainable, glocalisation needs to shorten supply chains and reduce food miles.
In January France adopted draft legislation aimed at promoting local food and short supply chains. Large companies will be required to integrate sustainable food systems, such as choosing local and organic products, into their corporate social responsibility strategies.
According to Euromonitor, the most successful retailers, producers and fast food chains will make an effort to go glocal and adapt their offerings to local food preferences and produce while retaining their global allure.
Part 3 will cover the final 4 mega-trends in retail sustainability. Read Part 1.