Becoming a Green Company: 4 Examples to Guide the Way
Over the past few weeks, we’ve been publishing a series of articles about sustainability for food and beverage brands … moving from relatively low-stakes/low-impact (packaging) to mid-stakes/mid-impact (brand mission) and now to high-stakes/high-impact (corporate environmental responsibility). Product to brand to company.
This is part of a series of articles we’ve published on sustainability for food and beverage brands.
The Road to Sustainable Packaging is Long. Start with These 5 Steps.
How Sustainable is Your Food or Beverage Brand, Really?
If you’re just starting as an organization down the path to environmental sustainability, it may seem impossible to consider making every. single. aspect. of your business operate with environmental consequences in mind.
But it is possible. And, I’d argue, imperative.
Taking a corporate-level environmental stance means it’s not just your packaging that is quote-unquote recyclable. It’s not just your brand on the mission. It’s every business unit, every employee, every decision. Until a sustainability mindset is part of your organizational DNA. In fact, it may not even be something you actively market to consumers. It just is.
(If you need to better understand the magnitude and breadth of the materials economy, I recommend watching the short documentary “The Story of Stuff” and the other resources from the Story of Stuff Project.)
What does this kind of commitment look like? Patagonia, the outdoor outfitter that’s “in business to save our home planet” is a common avatar for corporate environmental stewardship. But there are other companies in other categories — outside food and beverage — that CPG brands can look to for inspiration. Here are 4 mini case studies — including one “what not to do” example from our own food & beverage industry.
When you’ve finished reading this, go watch the TED Talk by Interface-FLOR founder/CEO Ray Anderson. Behind the genteel Southern drawl is a steely commitment to zero waste. An industrial designer by training, Anderson founded a company to manufacture commercial carpet tiles in the 1970s. Then, in the 1990s, he happened upon Paul Hawken’s book “The Ecology of Commerce,” which opened his eyes to the role that business and industry play in wrecking the environment — and the role they must play in healing it.
Anderson recognized the false choice between environment and economics. Then he asked, “Why not us?”
He set out to transform a petroleum-intensive company to take as little from the earth as possible and only what the planet could regenerate—not a single drop of fresh oil—and do no harm to the biosphere.
The “take-make-waste” industrial ecosystem is extractive and linear; Anderson aimed for renewable and circular. From manufacturing and sourcing overhauls to creating a reverse logistics system through which customers could return used carpet tiles for recycling, Interface-FLOR proved the business case for environmental stewardship. Twelve years into the initiative, in 2009, Anderson reported that costs were down, sales were up by two-thirds, profitability had doubled, and cost savings had paid for all the expenses of the transformation. FLOR’s products were better than ever, thanks to a culture of innovation. Employees were galvanized around the shared purpose. And, he noted, no marketing campaign at any price could have yielded the marketplace goodwill that the company’s mission had generated.
Visit the website for FLOR (the company’s consumer division) and you’ll see high-style carpeting made for modern homes. FLOR leads with design; its minimal carbon footprint is a secondary selling point.
When Paul O’Neill took over the aluminum manufacturer in 1987, the company was tanking. It had a poor reputation for product quality, underpinned by a litany of serious employee safety problems. O’Neill spent time investigating how the company operated and asked loads of questions. Rather than focusing on products or customers, his turnaround plan focused on safety. The board of directors, shareholders, and fellow C-suiters questioned how safety would translate to sales and improved margin.
O’Neill remained committed. Across the company, new safety policies were put in place. The culture shifted as employees realized that the CEO was invested in them. They started caring about their work and their fellow employees. Productivity went up. When there was an error, O’Neill accepted personal responsibility, took action, and set an example.
By the end of his tenure in 1999, just under a decade later, Alcoa’s market value had increased from $3 billion to more than $27 billion. O’Neill found a value that the greater company could get behind, and he never wavered. Business case studies call this a “keystone habit.”
While Alcoa’s mission was safety-minded rather than planet-centered, the keystone habit offers a powerful model. Find a value that’s tangible and ownable — the more specific you can be, the better. Put your neck on the block, do what you say you’re going to do, and stay the course even when it’s difficult or costly.
3) Alden’s Organic Ice Cream
Alden’s was a client of ours; they came to us as a regional operation in the Northwest with a dream of expanding. Ice cream — organic at that — what’s not to love? But the company struggled with low brand recognition.
Their brand position was earnest and earthy, overly serious in the way that some better-for-you brands can be. Unfortunately, they didn’t explain the value of organic ingredients in a treat like ice cream.
As we dug into the 360° Brand Development process, we discovered a single value woven into the business that virtually nobody inside or outside the company knew about.
Alden’s sources organic milk from a co-op of 40 family farmers. And so, we found the “keystone habit” — to protect the integrity and financial sustainability of those family farmers. Only the people in procurement really knew about this commitment and what it meant to the farmers.
We created a new mission for the company: “supporting family farms.” We broke down internal silos and made sure that everyone in the company, from the workers on the production line to the financial analysts to the marketers, knew about the mission. It wasn’t just about selling ice cream. It was about honoring and preserving the livelihoods of farmers who followed sustainable, organic practices. That became the company’s flag in the ground.
As with FLOR, the corporate commitment to sustaining farmers paid off: In just 24 months, this small NW regional brand became America’s best-selling organic ice cream.
Here’s our “what not to do” example. Companies that adopt strong pro-environment positions don’t have to tout their green chops in marketing campaigns. FLOR doesn’t lead with it. But woe be to the company that does make sustainability a marketing platform … and then fails to back it up in business practices.
Oatly has lately landed in hot water, with environmental activists calling for a boycott of the company’s oat beverage products. The Swedish company is built on the promise of radically changing the food system in order to tackle humankind’s greatest challenge: climate change. Oatly’s marketing and product platforms are anchored in making it cool to be vegan — they sell upcycled clothing with the brand logo, and adopt a slang-y millennial brand voice and illustration style.
The company’s financing, though, raises eyebrows. In 2020, it sold a 10 percent stake to Blackstone, a private equity group that has come under fire previously for allegations that it’s involved in businesses that contribute to the deforestation of the Amazon. It’s a complex issue (a big chunk of that same financing deal came from “green” bank loans that come with sustainability requirements). Oatly issued a “yeah, but” statement that said, basically, “Yeah we accepted this potentially questionable financing, but at least the money is going to green projects instead of to fossil fuels or something else that’s bad for the planet.”
A company leader was quoted as saying: “We know some people may see this as unexpected, but it was very purposeful. We’re at a stage where we need to scale up. Scale requires investment and big investment. If we’re able to change mainstream capital into greener projects, we will start to see a new level of change.”
The lesson here is that companies need to be steadfast in their commitment to sustainability, always and in every way, not just when it’s convenient.
It Must Be Possible
Your company has a large environmental footprint beyond product packaging. To become a truly green company, it should be ready to review every part of the business. This is not a brand exercise. It’s not a marketing initiative.
When decision making is siloed throughout an organization, all those decisions will focus on the performance of the individual business unit. Manufacturing for speed and efficiency may save costs, but it increases waste. Sourcing cheap paperboard may save budgets, but it increases forest usage. True sustainability requires system thinking.
Those costs eventually get passed along. To the consumer, in higher prices. Or to the environment, in terms of climate change and biosphere degradation. Which do we prioritize?
As Anderson notes in his TED Talk, if something exists, it must be possible. And if it’s possible for one company, than it must be possible for every company.
Where are you on the path to sustainability? Whether you’re looking at packaging, reframing your brand mission, or evaluating every aspect of your corporate operation, we can help you take the right next steps. Let’s start a conversation.