Sustainable sourcing can improve the value proposition of a private label. The challenge, however, is conveying the message to consumers.
One way Albertsons-Safeway has addressed this is by featuring sustainability labels on its private labels.
For instance, it uses the “Responsible Choice,” on its own label seafood that has received a yellow or green rating from the Monterey Bay Aquarium’s Seafood Watch program.
Albertsons-Safeway also features the “FAD Free-Sustainable Caught” logo on its Open Nature skipjack canned tuna.
Likewise, the retailer is more heavily promoting the fact that some of its store brand private-label paper products are certified as sustainable by the Forest Stewardship Council and the Rainforest Alliance.
Bot these logos were initially placed on the back of the package.
“We made the transition to having it on the front of the label,” Chris Ratto, director of sustainability, Albertsons-Safeway, said Thursday in an educational session at FMI Connect in Chicago.
Sustainable sourcing is a method that includes managing all aspects of a product’s lifestyle, from packaging to transportation and labor and human rights. “It’s the cradle-to-grave impact of a product,” said another panelist, Joe Berman, manager of corporate social responsibility, Price Chopper, which deepened its commitment to sustainable sourcing five years ago.
Sustainable sourcing is critical at a time when the worldwide population is expected to swell to 9.6 billion by 2050.
“This will produce significant challenges,” Berman said.
“There are rapidly approaching economic and ecologic tipping points associated with food production, harvesting processes and ecosystem carrying capacities.”
The United Nations has projected a global water available shortfall of 40% in the next 15 years. The practice is especially important in the private label business because store brands have become an expression of core values of an organization.
“Private labels demonstrate an organization’s commitment to corporate social responsibility and ethics,” he said.
Citing 2014 Nielsen data, Berman noted that 55% of consumers across 60 countries say they would pay more for products made by companies that are committed to a positive social and environmental impact.
“Traceable and transparent products build consumer trust and brand loyalty, drive category growth and increase profits,” said Berman.
More than three-quarters (78%) of consumers say it’s important for companies to not just be profitable but to be mindful of their impact on the environment, according to the Natural Marketing Institute.
Further, knowing a company is mindful of its impact on the environment, 58% of shoppers are more likely to try a retailer’s products and services; 45% are more likely to talk about the brand with family and friends; and 30% are less concerned with price.
“Those consumers who are most interested in these issues put their money where their mouths are,” said Scot Case, NMI VP.
Sustainable sourcing involves the integration of natural biological cycles, such as crop rotation; the use of on-farm recourses, such as composting weeds and manure; paying workers a fair wage; and minimizing adverse impact on health and safety of wildlife and water, noted Carl Jorgensen, director, global consumer strategy, wellness, Daymon Worldwide.
“Sustainable practices can be communicated to customers as points of honor and quality,” Jorgensen said. “It helps align your products to consumers values.”
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