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No avoiding sustainable sourcing

07-Nov-2005

Food companies do not yet face the ethical sourcing equation of the clothing industry, where brands from Nike to Marks & Spencer cannot afford a single claim of sweat-shop production. But the moment is fast approaching for food, too, when exploitative sourcing will be the public relations kiss of death.

Already, fair trade is pulling food consumption out of the cost-is-all bracket, with consumers prepared to pay more for guarantees of fair labour practices and sustainable sourcing. It's a trend now so significant that last month Nestlé UK became the first of the four major coffee roasters to offer a fair trade product line.

However, the Nestlé move marks more than a launch into a now established premium market.

 

Nescafé Partners' Blend was borne of market research showing that ethically-sourced products are moving into the mainstream. Products marked 'natural' or 'organic' are flying off the shelves, with Fairtrade sales, alone, growing by more than 40 per cent a year.

 

Repositioning to where the demand is growing makes sound business sense: and ethical sourcing is becoming un-ignorable as a commercial pull.

 

But, in this case, the change in consumers' buying represents an emotionally loaded aversion to unfair products, as well as a preference for sound sourcing. And it is here that the food industry must take heed.

 

Staying away from fair trade will certainly keep producers off the fast-track, with sales growth moving instead to the ethical players. But dipping a toe into the market, while maintaining all the old practices for existing product lines, is horribly close to an "on Tuesday, I don't beat my wife" statement.

 

That is not to say that Nestlé is not acutely concerned about sustainability. Along with Groupe Danone and Unilever, Nestlé is a founding member of the Sustainable Agriculture Initiative Platform, a 19-member strong food industry body which supports the development of agricultural practices that preserve current resources and enhance their efficiency.

 

But other companies are already managing to make fair trade into a selling point for the whole company, rather than a single product line.

 

On the high street, Starbucks has achieved consumer kudos out of schemes to pay farmers top dollar for their crop, forging long-term relationships with them, offering technical support and training and contributing to social development programmes. It has also drawn up a set of socially-responsible coffee-buying guidelines.

 

It's an ethical set that appears as a 7-day-a-week commitment to doing the right thing.

 

Clearly, the market data that prompted the Nestlé move demonstrates real opportunities for companies that put their caring side on public display.

 

The trouble is, there is a toll to pay for treading the path of sustainable righteousness. For a start, fair economic return must be factored in. Then there are training costs. And what about funding for new schools and health centres?

 

To those that hold the multinationals' purse strings, this stacks up as a cost-base revolution. And to cross this bridge, it would need to be an imperative - rather than just a growth magnet.

 

So will it ever become an imperative?

 

The line-in-the-sand on this is what usually happens when a chattering-class issue moves into the mainstream.

 

Will three-quarters of the population be delighted to continue drinking unfair coffee as the alternative gains ever more prominence?

 

More importantly, will the media leave plantation practices behind the big brands as a story beyond the public eye, faced with an issue of rising reader appeal?

 

Or will a move into the mainstream for fair trade open the door to a public relations issue that is set to roll, and roll?

 

Ask Nike.

 

Just as the clothing industry introduced factory guidelines when consumer outrage over sweat shop practices reached a fever-pitch, soon food companies will have no choice but to make their entire product offering ethical.

 

Meantime, commercial advantage lies not in being dragged along behind consumers' preferences, but in getting to the right place first.

 

It may be bold, and it may be hard, but sustainable sourcing didn't arrive in 12 months, and it is no fad diet rising this year only to disappear next year.

 

This trend is here to stay. Consumers are already voting with their feet, and the food industry is not the first stop on ethical sourcing. There is a history to learn from.

 

For the money men scratching their heads, fretting over how the sums will add up, the commercial logic lies in being ahead: especially when the numbers will need to be made to add up in the end anyway.

 

Formerly of the FT, BBC and EIU, Jenny Luesby has been editor-in-chief at Decision News Media since September 2003. The article was co-authored by Jess Halliday, editor of NutraIngredients-USA.com

 

If you would like to comment on the article, please contact jenny.luesby@decisionnews.com

 

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