This is the third post in a four-part series on undertaking a sustainable sourcing business approach to innovate private store brands. Click here to view section one about the myths, risks and opportunities of sustainable sourcing, or here to learn about the Crawl Phase of a sustainable-sourcing initiative.
In the U.S., consumer awareness, the demand for more transparency and continued compression on margins are providing an opportunity for private brand owners and the industry to look at value and innovation through a different lens.
Millennials are the new majority demographic classification. This segment is very aware and fiercely loyal to brands that meet their value equation. It should be the goal of a private brand to have millennials becoming its customers for life.
When taking on a project of this magnitude, I recommend taking the Crawl-Walk-Run approach, featured in this series. Here we will examine the Walk Phase.
Incentivize in-store green champions by providing special T-shirts and apparel to identify and differentiate them and by including them in monthly private brand steward meetings to ensure the goals of your sustainable-sourcing strategy are being met and measured.
In the Crawl Phase, I discussed recycling. When walking, now is a good time to challenge your manufacturers to reduce packaging.
To develop your sustainable-sourcing strategy as you begin to walk, look for ways to incorporate a slight formula variation in SKUs. Instead of using conventional cocoa, switch to fair-trade cocoa. Remove palm oil from the formula, or use sustainable sources of palm oil. Identify and reduce chemicals of concern or artificial ingredients.
Realize that suppliers need demand commitments. For example, there must be demand for an entire barn’s worth of cage-free eggs in order for a supplier to convert a barn from cages to cage-free. Your suppliers’ understanding of your position will increase the availability of sustainable supply over time as long as you make clear to the suppliers that you will use sustainably-sourced ingredients whenever possible.
Communication is important to make sure the positions of your private brand strategy are known to your suppliers and to the industry. Having inconsistent sustainability attributes in your private brand products many mean that you will not be able to label or market the sustainable attributes right away, but as your positions are known and as you consistently buy the sustainably-sourced ingredients, supply will increase so that you can eventually promote the sustainably-sourced attributes.
The paper products industry, through the Sustainable Forestry Initiative, is practicing this today. But as an industry, there is still a lot of work to do to record and make readily available product ingredient traceability information to brand owners and consumers. It is important to keep challenging your manufacturers and suppliers and to raise the bar on packaging and ingredient standards as well as supply chain efficiency.
After gaining momentum in the Walk Phase of sustainable sourcing, you are ready to beginning exploring the Run Phase, the topic of my next post.
Portions of this were originally published in Henry Stewart Publications 2045-855X Journal of Brand Strategy VOL. 4, NO. 2, 000–000 Summer, 2015
As CEO of <a href="http://www.SustSolutions.com">Sustainable Solutions Group</a>, Ms. Janice Neitzel uses a data-driven approach in leading top food industry decision-makers in answering consumer demand for higher animal welfare meat, dairy, and eggs. Her clients range from international to North American to regional food companies, including food manufacturers, retailers, grocery, private brand, quick service, casual dining and fast casual restaurant chains. Ms. Neitzel has an MBA in Sustainable Management from the Presidio Graduate School and is a Certified Group Facilitator. With Dr. Temple Grandin as a primary advisor, Ms. Neitzel leads decision-makers to consensus on supply chain Animal Welfare and Antibiotics Policies, for a more sustainable food supply chain.