In 2006 Walmart sold fresh Atlantic salmon fillets in its stores for $4.84 per pound — an incredibly low price. Where did it all this cheap salmon come from? As it turns out, over the previous 10 years, fish farms had proliferated along the coast of Chile, a country far from the natural habitat of Atlantic salmon in the cold waters of the northern hemisphere.
Despite a lack of experience with fish farming, salmon became the second largest export of Chile, thanks in no small part to the huge market reach of the big-box retailer. As Charles Fishman documented in his 2006 book, “The Walmart Effect,” Walmart bought all of its salmon from Chile, amounting to perhaps one-third of the country’s total exports.
Lax regulation and price-driven suppliers eager to meet Walmart’s demand led to exactly the kind of overcrowded, antibiotic-heavy, environmentally-destructive fish farms that environmentalists caution against. In 2007 an outbreak of an infectious disease led to a near-collapse of the salmon farming industry in Chile. Walmart, known for its ability to pressure suppliers to change their policies and decrease price, has since diversified its salmon purchasing. And Chile has started to improve its fish farm practices: In 2013 the country’s Verlasso farm became the first ocean salmon farm to receive a “good alternative” rating from the Monterey Bay Seafood Watch.
While Walmart is in a class of its own in terms of size, the point is that because of their massive purchasing power, large corporate grocery chains can wield incredible influence over product markets and even the policies of their suppliers. In the world of seafood, there are fairly immediate consequences — for better or worse — for the environment.
“Supermarkets are one of our strongest connections to the oceans,” reads the headline on Greenpeace’s latest annual report on the sustainable seafood policies of the country’s largest grocers. Indeed, large chain grocery stores are increasingly the source of consumer seafood purchases. Greenpeace’s latest Carting Away the Oceans (CATO) report, its eighth, showed some promising progress by large retailers, with Wegman’s rising up to become the fourth retailer to be awarded a “good” rating since the report began in 2008. Even Walmart was lauded for its efforts to introduce a private-label sustainable canned tuna product.
But the CATO report also cautions that human rights abuses regularly occur in the industry, along with dangerous levels of overfishing: The populations of top predators like tuna, swordfish and sharks have dropped by as much as 90 percent in the last 50 years. It calls for increased transparency from large retailers on their seafood purchasing policies.
According to Geoff Bolan, Commercial Director of the Americas for the Marine Stewardship Council (MSC), corporations have an “invaluable” role to play in taking care of the oceans:
“As large buyers of seafood, the rules they put in place through sustainable seafood policies and sourcing commitments translate into action through the supply chain back to the fisheries,” Bolan told Triple Pundit.
The MSC runs a fisheries certification and an eco-labeling program to encourage purchase of seafood produced using the most sustainable methods. The organization works with stakeholders across the seafood supply chain, from fishermen to grocery stores and was actually founded in part by Unilever as a response to declining fish stocks.
One thing is clear: Large and small companies are paying more and more attention to sustainability issues. Within MSC alone, the wholesale value of seafood products carrying the MSC eco-label rose 21 percent from 2013 to 2014. The increase in marketed sustainability products was driven by new and existing demand from producers, including Highliner Foods and Dr. Praeger’s, as well as new categories for sustainable fish like pet food and nutrition supplements.
“Corporations also need to figure out how sustainability fits into their own value proposition,” said Bolan. He says that whether companies pursue sustainable supplies because they want to hedge their risk against future seafood supply losses, or if they are looking to use sustainability to attract more customers, committing company resources is key. “[Sustainability] commitments without sufficient resources and empowered staff whose success is measured around these issues usually come up short,” Bolan said. He pointed to Loblaw Companies, Canada’s largest supermarket chain, as an example of leadeship at the top supported by strong team execution.
With increasingly visible campaigns by large grocers like Trader Joe’s, Whole Foods and even Walmart, it’s clear that sustainability is becoming more and more status quo, rather than a fringe niche. But Bolan points out that change at the corporate level is slow and there is constant room for improvement. What is needed to take corporate commitment to the next level?
According to Bolan, consumer demand will drive change at the organizational level.
“There’s no doubt that increased, quantifiable consumer demand would drive more action by large companies,” he said. And while government regulation may be helpful in other industries, the laws of supply and demand can go a long way in the world of seafood.
“When a major buyer transmits a message through its supply chain, that message is heard,” said Bolan. “When many large buyers transmit a similar message, there’s little room left for those who are not operating at such high standards.”
Image credit: Flickr/pedrosimoes