Grocery retailers are embracing change and believe sustainability can attract more customers. But retailers are grappling with how to communicate sustainability efforts to the market. Here is how to avoid the showmanship that too often looks like greenwashing.
Most grocery retailers around the world agree that sustainability will be a key competitive advantage in the future. Forty-two percent of the top 50 global grocery retailers have established a sustainability function, and 14 percent now have a “Chief Sustainability Officer.” 82 percent of groceries retail CEO’s cite sustainability as a key priority.
Hence, most grocery chains are doing several things to become more sustainable. The most popular ones being:
- Reducing or eliminating plastic packaging
- Banning single-use grocery bags
- Demanding producers increase animal welfare, particularly for meat
- Introducing better sell-by dates and discounting products nearing the end of their shelf life
- Donating food to eliminate waste
- Shopping locally to reduce emissions
- Banning particular products to protect the rainforest or other vulnerable areas
- Making recycling easier
- Optimizing the value-chain to improve quality and reduce carbon footprint
Grocery retailing is characterized by low margins, pressing daily challenges and complex global supply chains. While sustainability fundamentally represents long-term challenges, retailers tend to focus on the more near-term, urgent matters, leaving less time for fundamental changes related to sustainability.
For some the solution is to look for one-off PR-opportunities, finding ways for the media to focus on specific initiatives, large or small, symbolic or substantial. This approach is tempting for several reasons. Firstly, sustainability is a complex territory and most customers know little about production methods, value chains etc. and how, when and why a particular tomato ended up on the shelf in front of her. In the short term, some symbolic action might do the trick. Secondly, despite an interest in sustainable products, only 20 percent of shoppers are committed, according to a UK survey. In other markets anecdotal information indicates that the percentage is a lot lower. Lastly, the customers tend to focus on only one topic at the time. In January, they might not understand why you have plastic-wrapped each individual cucumber and tell you to stop it. In February, they suddenly embrace the same cucumber because they understand that the thin layer of plastic helps the cucumber last longer, reducing food waste. It is all about whether plastic or food waste is the sustainability flavor of the month.
However, in the long run, this will not work. The industry is too big and too important, and its actions are fundamental to the health of our planet. Every customer might not understand it all any time soon, but a lot will. They will be the ones demanding real action and spending their grocery money accordingly. Reaching the market with positive messages on what the realities of the industry is getting more critical each day.
Our work with clients points to five critical success factors to make that happen:
- Make sustainability an important part of the strategic plan. Sustainability is not only about looking good. It is also about changing the way you do business. It takes courage, patience and resilience to make that happen. If it is not in your strategic plan, it will always take the back seat to more traditional sides of the industry.
- Create a sustainability narrative. The word sustainability has different connotations for people. A quick look at the 17 UN Sustainable Development Goals shows how broad the term is. You need to tell the market what sustainability is to you, what your priorities are, and how it is all linked to what you want your brand to be.
- Be transparent on what you do and why. You cannot solve every problem tomorrow and you cannot make the world a more sustainable place on your own. Be honest about your sustainability dilemmas, challenge the customers to do their part and tell them why things don’t change as fast as they sometimes would like. If you truly show that you care, the customers can be patient.
- Define communication and KPI’s. You need measurable objectives in order to know if you are moving in the right direction in the customers mind – and at the right speed. It is not about “making some PR.” Rather, it is an integrated communications strategy using all available channels including those normally used only for price promotions.
- Talk when the customers are willing to listen. The customers rarely have the same focus as you. You need to communicate your initiatives when the topic is on the customers mind. That is not being an opportunist; you’re respecting that your customers have a lot on their plate. You might be somewhat important sometimes, but their local grocery store is hardly the customers’ epicenter in life.
Sustainability is changing the world of grocery stores. In order to stay competitive, the retailers need to both act and communicate. Greenwashing is a thing of the past. Now, it is serious business.