Sustainable Change: Turning risks into opportunities
By Cher MereweatherSustainability Anthesis Provision Editor pick
In the world of risk management, there are two broad categories of risk: positive and negative. Naturally, positive risks are considered opportunities, and negatives are regarded as threats. Often, the difference between the two is preparation.
There are four chief risks currently facing the food system, any combination of which will affect small-to-medium food and beverage companies in Canada as threats or opportunities, or perhaps most likely a mix of both. While many of these risks arise from macro-level drivers or in tandem with movements by major manufacturers and retailers, they will have profound impacts on the 97 per cent of food and beverage companies in Canada classified as small-to-medium.
The four top risks facing food and beverage companies right now, in no specific order, are:
- expanded supply chain governance;
- carbon policy and regulation;
- ongoing and expanding labour crisis; and
- access to capital and insurance.
I want to focus on how food and beverage companies might prepare for and leverage the risk in supply chain governance as an opportunity.
When we examine the market forces at play currently, we see major retailers making public commitments aligned with the Canada Plastics Pact, food loss and waste reduction commitments in line with the United Nations Sustainable Development Goals, and net zero targets (i.e. the amount of greenhouse gasses a company emits is no more than the amount it removes). Commitments making waves include Walmart’s goal to reach net zero by 2040 and to ensure all global private brand packaging is recyclable, reusable, or industrially compostable by 2025. Loblaws and Sobeys aim to reach net zero by 2040 and 2050, respectively. Metro has focused on reducing packaging weight, increasing recyclable content, and aiming to reach 100 per cent recyclable or compostable packaging. Costco is developing a scope 3 emissions action plan, and Sysco is engaging suppliers across their supply chain to set their science-based targets for scope 1 and 2 emissions by 2026 and developing a sustainable agriculture program by 2025. Finally, Loblaws, Save-On-Foods, Metro, Sobeys, and Walmart have all made commitments to reduce food waste by 50 per cent by 2025.
These impressive commitments cannot be realized without these major retailers engaging with vendors and suppliers across their supply chain. They will rely on their food and beverage partners to collaboratively engage, or these public commitments are unachievable. For suppliers, the question becomes, how are you preparing to meet these growing demands around food waste, packaging, greenhouse gas emissions, and climate impacts? How are your plans turning a potential risk into a reward as a partner of choice?
Suppliers who position themselves as collaborative partners with major retailers and manufacturers in achieving these public commitments will be in a powerful position to leverage this opportunity and, potentially, market share. This is where risk management turns crucial: what are you doing now to ensure you are ready to report on your scope 1 and 2 emissions? Have you begun exploring ways to make your packaging recyclable, reusable, or compostable? How are you addressing and preventing food loss and waste? There are three actionable steps you can take right now to be one of the prepared.
First, support the net zero targets of your major retail partners by establishing your scope 1 and 2 baselines, and begin planning how you will be reducing your organization’s emissions. Second, support your partners’ plastic packaging commitments by gaining a clear sense of how recyclable, reusable, and compostable your packaging is and exploring alternative packaging available to support the broader commitments being made. The Canada Plastics Pact (https://plasticspact.ca/) is an excellent set of goals to align with, as many of the major players are already signatories. Finally, support your partners who have made food loss and waste reduction commitments by rooting out waste within your own operation, with the bonus of putting profit back on your own bottom line, while having a great environmental and social story to share.
Fortune favours the prepared. Taking steps now to prepare for inevitable risk factors will ensure stability, long-term value, and future resiliency across our food system.
Cher Mereweather, CEO of Anthesis Provision, is a Canadian-based food industry sustainability expert.
This column was originally published in the November/December 2022 issue of Food in Canada.
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