Sustainable Business Models for “Organic and Beyond”

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What if we could predict what the future would likely hold? What would we do today to manage potential risks to our businesses and prepare for change in a proactive way?

That was the premise explored when food co-ops, growers, wholesalers, distributors, and industry groups came together for the Sustainability in the Produce Supply Chain forum hosted by National Cooperative Grocers Association at this year’s Natural Products Expo West.

The forum was facilitated by Bob Doppelt of the University of Oregon Resource Innovations and used scenario-building to address how we can raise the bar in the natural foods industry by looking at sustainable business models that take us to “organic and beyond.”

Forum discussion focused on four “carbon and sustainability constraint” scenarios that are variations of the International Panel on Climate Change (IPCC) scenarios:

1. Globalization (“Wal-martization”)
2. Global Warming: Increased policy regulation and constraint
3. Rising Energy and Input Costs: Resource scarcity, division and breakdown
4. Push Toward Sustainability and Local Focus

Participants reviewed the key characteristics of each scenario and then identified potential impacts that each presented for the natural and organic foods trade. See the accompanying table (on facing page).

What options exist to prepare for these scenarios? What approaches could we use to maintain production base, supply chains, profitability, market share, etc., if each scenario came true?

It may be surprising to discover that many of the same strategies were identified in all four scenarios. What’s not surprising is that these strategies focused on initiatives that are consonant with co-op values.

• Increase efficiency on all levels. Whether labor, fuel or energy, measure your resource consumption and then document your improvements. Focus on renewables, and push changes back up the supply chain. For example, work with suppliers to implement bio-diesel in delivery trucks.
• Educate customers. Information is power, and co-ops can help raise awareness on issues critical to our mission. Look for innovative ways to educate consumers and connect them to the supply chain (for example, through grower profiles). Involve your distributors in developing an information database.
• Develop a broader voice on public policy. Build political connections. Work locally, regionally, and nationally to lobby for higher standards, proper labeling, and incentives for sustainable practices (for example, incentives for more domestic organic production or incentives for businesses to reduce waste or to become carbon neutral). Seek out and participate on industry boards.
• Develop local supply. Build relationships with suppliers and make sure to understand their practices. Make commitments to growers to buy products, start farmland trusts, etc. Push for diversification in local production. Promote your connection to and support of community.
• Support sustainability in global markets. Local is important, but so is supporting impoverished global communities. Support products created in a manner consistent with fair trade principles. What else can be done to develop fair labor practices in China, for example?
• Increase collaboration. Look for opportunities to collaborate on issues important to us. Identify projects (e.g., less product packaging, better fuels) and work with trade partners and other retailers to make a measurable difference in our industry.

Co-ops are already doing great work in these areas and we have much to be proud of. The challenge is to identify what more we can do to truly excel and to differentiate ourselves; to individually and collectively incorporate actions into our business plans and change our models to take us “organic and beyond.”

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Kelly Smith is director of marketing and communications for National Cooperative Grocers Association ([email protected]).