- Nick Oakes from Vero Drinks talks about how to bring sustainability into the food and drink business
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In the sustainability sector, myriad NGOs, companies and governments painstakingly fret over consumers. How can we ensure sustainable products have shelf space in supermarkets? Will consumers buy them? Will they pay more?
If this sounds a tad dramatic, consider this: in 2015, 150 world leaders adopted “sustainable production and consumption” as one of 12 sustainability mega-goals for 2030. Sustainable production & consumption is high on the agenda; change is afoot, like it or not.
However, world leaders don’t usually implement their own targets, nor is Sir David going to single-handedly deliver us from all plastic (as much as we’d all follow him to the promised land…). It falls on the shoulders of those working in consumer-facing businesses to innovate and drive forward radically new sustainable business models, of which food & drink brands have a huge role to play.
In the food and drink sector, the biggest sustainability challenge for brands is the transformation of their ingredient supply chains, often ignored by most due to a lack of supply chain transparency. Yes, plastic packaging is a big problem, but unsustainable and unethical supply chains are an even bigger one.
According to the UN, 22% of global greenhouse gas emissions – nearly ¼ of all emissions, everywhere – are from the food sector, largely a result of the transformation of native forest into farmland or plantations. According to CDP, palm oil, soy, beef and timber, are the biggest drivers of this land transformation.
There are serious efforts underway by big players, like Unilever, who own too many consumer brands to name, to transform their supply of palm oil, for example, by sourcing sustainably. This is good, and they’re helping to reduce harm to the planet from big commodities like palm.
But rather than creating a problem and then fixing it, are there ways to build sustainability into the core of the business from day one? And rather than just promoting less harm, can we promote more good?
Ethics baked into the business
To answer this question, let’s take one example we know well: açaí, a fruit native to northern Brazil. It grows in abundance in the native forests of northern Amazônia, where it has been harvested for centuries by indigenous and settler communities, and more recently arrived at the beaches of southern Brazil as a surf-hut staple offering.
In the traditional business model of the farming community in northern Brazil, they may chop down the trees and sell the timber, or convert the land to farmland for cattle or açaí plantations, for sale via a complex and opaque set of exporters, traders, importers and agents. If the community were intending to do less harm, they may slow down or stop conversions, adopting better farming practices with the help of NGOs or companies.
A more sustainable business model, having a positive impact from day one, would involve the farmer selling only wild harvest açaí, sustainably harvested from the abundant wild rainforest rather than a plantation, and where buyers outside the region make this a condition of procurement. This is exactly how many companies, including our own, are increasingly operating in this supply chain, and how many açaí farming communities now supply.
From the London-based food & drink brands all the way down to the farming communities in northern Brazil, all are directly dependent on the sustainable management of native forests. This creates a market for products that promote more good, don’t cause deforestation, and helps farming communities improve their collective bargaining power. They in turn get a bigger share of the export price, and can invest in boats, schools and homes for their communities. This is good for the farmers, good the planet and good for consumers.
The business model for açaí can’t be applied to every supply chain nor every consumer brand. You’re unlikely to find any coffee roasteries with ‘wild harvest’ only coffee procurement policies, because coffee isn’t abundant in the wild. But you can source coffee from semi-wild forest, from responsible communities that maintain or regenerate native forest in the surrounding areas.
There is nearly always a way for food & drink brands to firmly place sustainable sourcing front-and-centre in their business models if they look hard enough – even, dare I say, for the long-blighted deforestation-monsters such as palm oil - while educating consumers on the journey, and raising the profile of sustainable production and consumption.
Nick is the founder of Vero Drinks. He is an expert in impact investing and sustainability, former resident of Brazil, and has nearly a decade of experience in carbon finance, impact investing and sustainability.
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