February 8, 2012
Q&A, Dan Crossley, principal sustainability adviser, Forum for the Future
While researching one of our 2012 trends, Food as the New-Eco Issue—the idea that the environmental impact of our food choices will become a more prominent concern—we interviewed Dan Crossley, principal sustainability adviser at Forum for the Future. The not-for-profit works globally with business and government on sustainability issues, with Crossley leading the group’s efforts to take more sustainable practices around food into the mainstream.
Based in London, Crossley has worked with leading food businesses, including PepsiCo, Cadbury, Marks & Spencer, Tesco and Tata Global Beverages. He recently led PepsiCo’s Scenarios & Strategies 2030 work and Consumer Futures 2020 with Sainsbury’s and Unilever. Before joining the Forum, Crossley was a food sector researcher for a large food manufacturer and a factory financial controller. We discussed the sustainability issues involved with food and touched on consumer awareness (and how to improve it), what brands are doing right and why there’s some reason for optimism.
Later this week, watch for our trend report “What’s Cooking? Trends in Food” for more on what’s hot in the food industry.
What’s your organization’s 30-second elevator pitch?
Forum for the Future is a not-for-profit organization working globally with business and government to help create a sustainable future. Work on food is one of the key systems we’re focusing on. We want to help mainstream sustainable food by doing three things: rebalancing equity and fairness in value chains; reconnecting people with food to allow producers to raise standards; and restoring resilience in the food system, making more effective use of resources and cutting food waste.
“Sustainability” is a term that’s thrown around so loosely these days. How would you define it in relation to food and the environment?
Sustainable food is a complicated concept. These foods would have minimal environmental impacts, positive social impact and appropriate nutrition for people. It’s always a balance of those three key areas. We believe sustainable food is something that is enjoyable, desirable and fun.
What are some of the key macro eco issues surrounding our current food production and distribution systems that you’re concerned about?
Firstly, food waste. In countries like the U.S. and the U.K., between 30% and 40% of food that consumers buy is thrown away. If you include food grown in lots of developing countries where are there pre-harvest and post-harvest losses, some estimate more than half the food grown in the world is thrown away without being eaten. That’s arguably the biggest issue within the global food system.
Food waste is so critical because there’s more than a billion people starving and malnourished but also because of the huge environmental impacts of food production and growing: the climate change-related impacts, all the energy and labor that goes into making all that food being thrown away, is massive in itself. And the disposal of that food waste, particularly in the developing world, has huge greenhouse and other impacts.
The whole idea of sustainable diet is an emerging macro trend impacting food. People are looking at what they eat and the impacts of those diets. For example, meat consumption has huge, huge environmental impacts. If people can reduce meat consumption in the developed world—where they’re eating too much meat—it can have huge health benefits but also huge environmental benefits. Brands are starting to get into this very tricky issue of how you shape consumer demand, consumer purchase and what they’re eating.
Another key issue would be water scarcity: 70% of fresh water used by humans in the world is for agriculture, and two out of three people in the world are expected to live in water-stressed areas by 2025. This will have an impact most noticeably for beverage companies, many of which are starting to take good steps. Water scarcity is also an issue for food businesses, farmers and growers, clearly.
Biodiversity is also a massive issue that is only starting to get recognized. Bees represent between a quarter and a third of the pollinating force in the food we eat, so they are critical; without them, we all starve. We fundamentally rely on biodiversity and ecosystems. The collapse of bees in the U.S. and other parts of the world, for example, has led to hand pollination of some crops in China.
Another key area is climate change across multiple levels, such as the carbon impacts, the actual impacts of growing, producing and disposing of food. How people, businesses and countries adapt to climate change will be hugely important. We know some areas that can grow food now won’t be suitable for growing those crops in 20 or 30 years’ time. We’re already seeing more instances of extreme weather events in many parts of the world.
Population growth is another issue. It’s not an environmental issue in itself, but clearly if we’re going to have 9 billion people on the planet by 2050, we will have significantly greater demand for food, plus a warmer planet to produce those resources from.
These issues are arguably really macro for people to think about. How much consumer awareness is there around the link between what we eat and the environment?
Most people do not know very much, but it depends on which part of the world you’re talking about. For parts of Europe and the U.S., most people are very disconnected from how food is grown, where it comes from, how it’s produced, what the impacts are. That’s why one of our big strategies is trying to reconnect people with food and working with brands, amongst others, to help them connect people with food in order to make them value it more so that they throw less away and understand some of those hidden impacts.
In the developing world, generalizing hugely, there’s more subsistence agriculture, and lots of people are more directly connected to the land and to food. They can see some of the impacts of climate change, water scarcity and soil degradation more prominently. Whereas, for those of us sitting in a nice Starbucks in New York or in London, it’s very easy to forget about the people that grew and processed the coffee beans or all the pesticides and water consumed to create that steaming cup of coffee.
Which food issues are consumers are aware of, and how will this change over the next few years?
Again, it varies market to market. Consumers aren’t completely disconnected, but often they think of the impacts of the packaging itself. Whilst important, if you had to rate the material impacts in order, that would be lower down the list. But it’s very tangible and visible. What people don’t think about is the impacts of growing, production and food distribution as a whole. Certainly we expect brands going forward to help educate consumers on where the big impacts are.
If you look at what some of the leading organizations in this space, like Unilever and PepsiCo, are doing, they are starting to translate some very complicated messages into easier-to-understand messages for the consumer so they can start to connect with this. We’ll see more signs of radical transparency happening. In a non-food example, Asda, the U.K. arm of Walmart, has put webcams in its clothing factories with live feeds to their website so consumers can watch where their clothing comes from—the same could apply to food. There is a growing demand to see where things are made and where they come from.
We want brands to help shape what consumers buy and create demand based on sustainability, rather than saying to consumers, “Soil is really important. Climate change is really important. Water is really important. You must understand these issues.” That is becoming quite old-fashioned green messaging. We’re seeing brands being much cleverer in their thinking about how to resonate with consumers. If you talk about cooking in a more energy-efficient way that saves money, that might appeal more than saying, “Think about what the carbon impacts of this food are.” There will be some education needed by brands on these big issues, but brands need to be very careful in the way they try to engage consumers on this agenda.
Issues like water and biodiversity will start becoming more mainstream, but it will take time and, given the urgency of the challenges, brands are better off trying to make the complicated decisions on behalf of consumers rather than trying to educate them about the impacts to the whole system.
If you could create a checklist for corporations and governments that want to increase awareness around these issues, what would it look like?
The first stage, almost before the checklist, is for businesses to understand their material impacts. And then to focus on those that are the most relevant for them. Then in terms of engaging consumers, the first step would be to think through what will resonate or what consumers of the future might be demanding to know—rather than getting stuck in the mindset of asking consumers what they think is important, which means you’re basing tomorrow’s decisions off yesterday’s information. The first thing to do is get in the heads of your future consumers as much as possible.
Then think through your key brand attributes that you can use to engage consumers in a positive way and to help shape that particular future. If you can try to understand what your consumers might look like in the future, how they might behave, you’re going to have a better chance of both changing the products and services but also marketing to them in a way that appeals to consumers of today.
The next piece of the checklist is, finally, make it fun. Don’t get too serious, and don’t get too preachy. We’ve seen that a lot in the past, and as I said, it hasn’t tended to work very well. If we’re to engage the mainstream consumers rather than just the 10 percent or 20 percent at the top, we need to make sustainability something that’s fun and desirable and attractive—not just focusing on the doom and gloom of climate change, hunger and scarcity that most consumers don’t find very empowering.
Do you think there’s a risk of consumers becoming cynical with these issues?
There is always that risk, but I think that will get reduced by increased transparency. There will be more and more pressure from NGOs, campaigning organizations and others to scrutinize companies’ supply chains in the future.
How will transparency impact sustainability when it comes to food brands?
Transparency creates exciting opportunities for new businesses in this space that can help connect organizations. More and more consumers are getting interested in what brands are doing. We’re already seeing mobile apps and other ways you can swipe your mobile over a product and it will give you reviews of what people think about it. In the future, I’m sure we’ll be able to see the farm where it was grown or a live video link of the factory where it comes from. That sort of technology is already emerging.
Transparency will empower some consumers, but the critical thing is there will always be some who take the time to seek out the details, but there will also be a big bulk of consumers in the middle, that 60-70 percent who maybe aren’t interested in all the details, and they just expect brands to make the tough decision on their behalf. They will want to trust the food or beverage brand they’re buying. They want to know the brand is doing everything it can to get their product to them in the lowest-impact way and delivering as much nutrition as they can. We’re clearly a long way away from that, but that trust in brands will be critical.
Yes, and people are holding brands accountable for what they do.
And that’s saying there’s a bigger role for NGOs and not-for-profits who can challenge business and make sure they do keep brands on their toes, making sure they aren’t getting too relaxed and forgetting to raise the bar. It’s so important that there are people who are constantly putting pressure on brands to keep up their game.
There are clearly external certification organizations like Fair Trade that are going to play a powerful role in providing added assurance to consumers. In the future, however, we may see fewer of those certification schemes as brands become the shortcut, because people aren’t going to want 20 different labels on a food item. We’ll see more certifications in the next few years, but gradually that will decrease as it grows complex.
Can you give me a few examples of who is doing it right when it comes to educating consumers about these issues?
Companies like Unilever and, to be fair, one of their rivals, Procter & Gamble, have done a great job here. They’ve both understood their material impacts and then started to communicate to consumers on those impacts. Unilever has made commitments around 100 percent sustainably sourced ingredients by 2020, working closely with organizations like Red Cross and others to help bring those goals to life. They’ve done some good marketing campaigns in the U.K. with tea brand PG Tips or Lipton over in the States on trying to connect consumers with tea and how it’s grown, which is really powerful.
One brand I quite like is Swedish burger chain Max Burgers. They’ve carbon footprint-labeled their menu, which is interesting in itself. But then they went further, actually encouraging their consumers to change from beef burgers, which have higher environmental impacts, to non-beef, chicken or vegetable burgers. I read that since they’ve introduced that strategy, they’ve got 30 percent in shift to non-beef burgers and they’re still maintaining profit margins of 11 percent or 12 percent compared with 2 percent for the multinational burger chains. It shows they can influence more consumers but still remain profitable, which is always really important.
Sainsbury’s in the U.K. has run campaigns called Love Your Leftovers, encouraging consumers to reduce their food waste by providing recipe cards in store and things like that—which is not just telling consumers they need to reduce food waste but actually giving them tools to enable them to do that.
And I like what PepsiCo have done generally. We’ve done lots of work with PepsiCo the last few years. On the sourcing side, they’ve got some really ambitious goals around reducing water and carbon by 50 percent in five years. And they’re trying to engage consumers in quite a fun way through some of their leading brands.
There are some smaller, niche players that are doing interesting things as well. Innocent Drinks is a smoothie brand here in the U.K. that tells a fun story on pack and engages consumers in a really positive way about some of the steps they’re taking on sustainability. They don’t try and tell consumers all the things they’re doing on sustainability in one go on one pack. Rather they have one key message which they’ll put on pack for a period of time, then change to keep it fresh.
There are more obvious ones like Ben & Jerry’s, who are well-known for being quite quirky and innovative and also for embracing this agenda and, in fact, helping to engage consumers on things like climate change in a more fun, lighthearted way than some other brands have tried to.
As food prices start to rise due in part to climate change, do you think that will be a trigger for people to pay more attention to these issues? Some people say the era of cheap food is over.
I think that’s very true. Over the past few decades, we’ve gotten used to very cheap food in restaurants, burger joints and supermarkets. We’ve started to see food prices rise in the last year or two, and that’s only going to continue. Food prices are going to be on an upward trend and increasingly volatile. We’re starting to see consumers recognize that and be a bit more thrifty and a bit more careful about the amount of food they throw away and the amount of food they buy, certainly here in Europe. That trend about people starting to understand the importance of food will continue.
The other thing that’s worth saying is that the proportion of our disposable income that we spend on food in the developed world is tiny compared to what it used to be, and whilst food prices going up will put increasing pressure on those that are already in food poverty, price increases put food higher on the agenda. Food will become a much higher proportion of disposable income. It’s only 10 percent of people’s disposable income in many Western countries, and in the past it was more than 50 percent.
It’s important not just to think about food in isolation but to think for consumers about their broader lifestyles and about what really is important. Some of the things they’ve come to rely on used to be luxuries and are now seen as necessities. We might need to fundamentally shift perceptions on that. People need to start living different lifestyles, and we’ll have to behave very differently to how we do today. It’s easy to say and harder to do.
I’m certain lots of people in the world feel very pessimistic, and we do have huge challenges. But actually when you look at some of the positives and stuff that some brands are doing, it gives you hope and you think there are definitely opportunities for brands to make money by helping mainstream sustainable food, so it shouldn’t be seen as a negative thing. Clearly, there is a pressure for companies to maintain security of supply, but they’re still big on opportunities to influence what consumers are buying in a positive way and reduce the impacts of how the food’s made and how consumers are using it.
Finally, what’s on your personal “things to watch” list in regard to sustainable foods?
I’m very hopeful that the solutions are already out there, in lots of cases, to the huge challenges that exist. So if we can just be savvy about connecting up different organizations working on this agenda, bringing together companies to tackle some of these challenges they can’t solve on their own, I think I’m an optimist.
We haven’t touched on the critical role of investors. Paul Polman, chief executive and chairman of Unilever, talks about the fact that he doesn’t want investors to invest in their company for the short term, he only wants long-term investors. And that kind of leadership is really important. And in terms of areas of focus, there’s been more activity happening within retail. There’s still a long way to go, especially in food service and fast food. I’d love to see more slow food getting into fast food.