Can we be competitive and Sustainable?

In my first article I discussed a model for competitiveness where competitiveness = innovation + productivity + sustainability. I then looked briefly at innovation and its impact on our ability to compete. In the last article I did the same with productivity. Now I’ll look at the issue of sustainability, its impact on competitiveness, and what we must do to improve.

If competitiveness means providing the market with what it needs, wants and demands at a price it is willing to pay and being able to do that successfully over time, then sustainability is an essential part of our success. So what do we mean by sustainability?

First of all, let me say that I’m not referring to financial sustainability specifically. Obviously, businesses have to be financially viable to stay in business. That’s a given, and inherent in the word competitiveness. I’m referring to meeting the expectations of customers, consumers, regulators – society in general – in areas like food safety and security, environmental performance and social responsibility.

Are we sustainable?

If you ask whether the Canadian food and beverage industry has the level of sustainability it needs to compete successfully over time, the answer, in reality, is “we don’t know.” We don’t have a good set of metrics to gauge these areas. For example, in an area like food safety we can measure how we compare with the U.S. or Europe or developing countries in food safety incidents. Maybe we’re as good or better, but are we good enough? Can we anticipate what’s going to happen tomorrow, next month, next year? Not really. But have a major food safety scare and you may go out of business or your reputation may take a huge negative hit that affects your business.

What is the level of performance required of us in energy and environmental performance? How is our carbon footprint? Have we done a life cycle analysis of everything we produce? These are areas that we must, very simply, continuously improve – the planet and the welfare of huge populations are on the line. So let’s look at three areas: food safety, environmental management and social responsibility.

Food Safety

This is an area that we may be doing OK in. HACCP-based food safety systems have been adopted by all levels of the supply chain, from retail and foodservice, to food and ingredient processors, to producers (in most agricultural commodity segments). We have food safety programs with the trucking and warehousing industries, food packaging manufacturers in some global regions like Canada, and more. Part of these systems is good manufacturing practices and premises security.

Now, the global Consumer Goods Forum has accredited a number of HACCP-based food safety standards as equivalent, with more being added to the list. This makes it much easier to assure food safety no matter the point of origin. We’ve also put traceability systems in place that help to identify and scope the problem and carry out a recall, when necessary, more efficiently when food safety issues arise. Are we good enough yet? No. There are still too many preventable food safety incidents. Will we ever eliminate them completely? No. Can we get better? Yes. How is your food safety program and how could you make it better?

Environmental Sustainability

This is a very complex and still somewhat uncertain topic to deal with. Are we living as lightly on the planet as we need to in order to ensure our long-term survival? Who knows? I doubt it. So what do we do about it? Well, this is not an area of in-depth expertise on my part, but some things are obvious. Are we as energy efficient as we need to be? No. Are we using as much non-polluting energy sources as we could, like wind power or solar power? No. Are we limiting waste to the greatest extent possible, such as using the smallest amount of inputs we possibly can to create our products?  Are we generating as little waste in our processes as might be possible? Is the waste we create being dealt with in an environmentally sound manner and being reused or recycled? Is our post-consumer waste as low as it could be? No. Are our plant facilities designed to be as environmentally friendly as possible, and do they meet LEED standards? Are we working with our partners in the value chain, from beginning to end, to ensure there is a major common thrust to make things better? Not really.

These are just a few of the questions that come to mind immediately. Can we improve in all those areas? Of course we can. Are we? Not quickly enough. This has to become a major focus for all of us in our businesses, our private lives, everywhere. Global warming, climate change, carbon footprint, life cycle analysis – we hear all these terms every day. Do you understand them and their implications? Are you doing all you can do to make it better? Doubtful. Are we talking the “great green cost burden” here? No. Do this well, and your costs may well come down through using less material, less energy, increasing yields all through the chain, and so on. Come on, let’s do it. Now!

Corporate Social Responsibility (CSR)

What is CSR? Well, clearly, the environment is part of it, but so is occupational health and safety, safe and humane working conditions and ethical treatment of animals. Also part of it is a focus on always protecting the consumer, whether from bacterial food safety problems or ensuring sound nutritional formulations. It really just means that are we, as businesses, doing as much good for society as we could be? Are we being the best corporate citizens we could be?

Do you know if your suppliers are adhering to sound occupational health and safety practices? Are you? Or is there, somewhere in your global supply chain, a supplier or producer that is using 12-year-old children as semi-slave labour? Did one of your suppliers just burn down hundreds of acres of tropical rain forest to set up their operations? There are now international standards to address many of these questions, such as SA8000 or OHSAS 18001. Are you asking suppliers to adhere to such standards?

The bottom line is that sustainability is a very complex topic that we are still learning about and adapting to.  But we need to do so faster and continuously forever. Can we do it? Who knows? Could we do more? Yes! We just need to commit ourselves to doing so, and then get on with it.

Gary Fread is president of Fread & Associates Ltd., consultants to the food industry. He has spent 25 years in management positions in the food processing industry, with a background in sales, logistics, purchasing and technical areas. He has worked with Procter & Gamble, Campbell Soup and Morrison Lamothe, and is the past president and CEO of the Guelph Food Technology Centre. He is active in many food industry associations and organizations, serving on the boards of several. Contact him at gfread@sympatico.ca