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In the food and beverage (F&B) industry, one key challenge continues – these companies must not only be sustainable, but they must also be able to prove this claim. Here’s how strongly today’s consumers believe in sustainability:
- 80% claim sustainability is important to them.
- 60% will refuse to buy products and services from a company they do not trust.
- 64% say that “better quality ingredients” is the most important reason to buy.
The challenge becomes more pressing as investors increasingly link sustainability to valuation. As they do so, investors continue examining a range of criteria, including social responsibility, sustainability, and ethical trading. Therefore F&B companies must create an end-to-end value chain sustainability strategy to provide consumers and investors alike with information demonstrating brand and product sustainability. This, in turn, also becomes a key market differentiator.
There is an upside for F&B companies as consumer preferences change. The IBM survey also found that of the respondents who said sustainability is very/crucial, more than 70 percent said they would pay a premium of 35 percent, on average, for sustainable and environmentally responsible brands.
To address this changing business environment, F&B companies need to begin using – or extend using – a digital solution to deliver end-to-end traceability. That way, they can gain increased credibility because their tangible results demonstrate the efficacy of their sustainability efforts, from source to store.
Transparency is essential in the F&B value chain
All of this isn’t to say that F&B companies haven’t made significant commitments to sustainability because they have. The problem, however, is that so much work remains to be done.
Consider this:
- “90% of all disclosed emissions in the food sector come from supply chains.
- With 16% of food companies have targets that address supplier emissions.”
- 24% of total greenhouse gas emissions are directly related to agriculture production.
With these challenges in mind, it becomes increasingly apparent that F&B companies need an end-to-end supply chain approach to achieve sustainability goals. Indeed, the good news is that 53% of manufacturers plan to implement new technologies to manage their supply chain. Implementing this type of digital solution for manufacturing will enable these companies to bridge the gap between sustainability efforts for operations and supply chains. As a result, using these solutions can help companies achieve sustainable performance and improved traceability while also demonstrating tangible results to increase trust.
One such solution is EcoStruxure Traceability Advisor, which enables companies to increase visibility across their entire production operation – from raw materials to finished goods. Consequently, they can then improve transparency and build a sustainable end-to-end value chain. This allows responsible and sustainable sourcing, but it also delivers the ability to track and trace product as it moves throughout logistics.
Case in point: Tangible sustainability results deliver competitive edge
Fifth Season, which has a 60,000-square-foot indoor vertical farm in Pittsburgh, PA, needed a sustainable system to economically and environmentally produce 500,000 lbs. of local produce during the new facility’s first year of full operation.
With Scale Microgrid Solutions, Schneider Electric designed, built, owned, and operated a microgrid system. The system, which uses a rooftop solar array, natural gas generator, and a lithium-ion battery energy storage system, delivers sustainable and dynamic energy management.
The use of the microgrid system has given Fifth Season a competitive edge by enabling them to cut greenhouse gas emissions by 470,000 pounds each year. What’s more, the vertical farm uses 95% less water than traditional agriculture, all while using zero pesticides and increasing overall footprint productivity.
“Our vertical farm in Pittsburgh is reconnecting consumers to locally grown fresh food,” Grant Vandenbussche, chief category officer at Fifth Season, explains. “This microgrid enables our journey to create a sustainable system that delivers healthier, fresher greens to local communities through both economic and environmental efficiencies.”
To learn more about building demonstrable sustainability credibility with customers and investors, visit our new Food and Beverage web page, EcoStruxure for F&B and EcoStruxure Traceability Advisor.
