Unilever Makes Sustainability Its Business

HOW INNOVATIVE PRODUCTS AND PROCESSES AND CHANGED CONVERSATIONS WITH RETAILERS ARE HELPING ONE OF THE WORLD’S LARGEST CPG COMPANIES CHANGE THE WORLD.

By Mike Troy

nilever published its first corporate social responsibility report in the late 90s, and the London-based multinational company, with U.S. headquarters in Englewood Cliffs. N.J., has been expanding its sustainability efforts ever since. That strategy has worked: Unilever’s annual sales are nearly $58 billion, its products are sold in 25 million retail outlets in 190 countries, and 13 of its brands have sales greater than $1 billion. Playing a key role in advancing the company’s sustainability-driven growth strategy is Jostein Solheim, EVP of foods and refreshment for North America. Solheim assumed that role in 2018 after an eight-year stint as CEO of Unilever’s Ben & Jerry’s brand. He spoke with Progressive Grocer about leading with purpose, taking on big problems and having new types of conversations with retailers.

Progressive Grocer: Unilever’s purpose is to make sustainable living commonplace. What does that mean for consumers?

Jostein Solheim: The fundamental belief behind Unilever’s purpose and mission is that by connecting sustainability and social responsibility with our business, internally and externally, we perform better as a business and deliver better results to shareholders. The magic of our strategy is to connect the two, connect the performance of the business with a bigger mission of doing the right thing for the planet and communities. And through that leverage, we get top-level performance. If you disconnect it, it doesn’t work. The leverage comes through the engagement of the whole team, the whole community. About 2 billion portions of Unilever products are consumed every day, so we need communities that are stable and thriving.

PG: How does that philosophy come to life in conversations with senior retail executives?

JS: The conversation is about moving from a relationship which has traditionally been grounded in negotiation to a relationship that is more grounded in innovating together.

PG: Are you structured in such a way internally that teams working on these things come together with trading partners?

JS: If we start with the big picture, on the customer side and retailer side and on our side, what we are seeing is that the silos of the way the organizations have been classically built have evolved. One simple example is our customers have become our media partners, and our marketing folks have to integrate their campaigns with the retailer’s platform. We’re getting a lot of data and information from this, which drives our innovation. We can work with our customers to look at the data and say, “There looks to be an interesting space here.” Then we bring our cross-functional team in to deliver on that in what the tech industry refers to as “agile ways of working.”

PG: Are there certain areas you are focused on?

JS: There are two main types of sustainability-based innovations. One is consumer-led. It’s what we are seeing with a huge trend towards flexitarianism. People are balancing out their diets and choosing to avoid some meat and dairy products, and that’s created a boom in vegan products. We see that in the ice cream category and nondairy ice cream. Ben & Jerry’s is now the No. 1 nondairy ice cream, and it’s a huge growth area. So is vegan mayonnaise, with Hellmann’s. Ben & Jerry’s nondairy has a 40% lower carbon footprint than a dairy equivalent, but it is still a fully indulgent product. That’s what I call consumer-led, where there is a trend and we meet it.

The other part is what I call driving loyalty and connection with consumers. That is something like PCR [post-consumer recycled] packaging. Hellmann’s is now at 100% use of post-consumer recycled plastic. Most people don’t run around the store and look for PCR packaging, but when they realize slowly over time that it is used, people say: “This is a good company. These are people that care.” It builds loyalty.

PG: And you’ve got data that validates that?

JS: Ben & Jerry’s is a great example. I was CEO for eight years, and what you can see very clearly is consumers that bought Ben & Jerry’s and were aware of our initiatives were twice as loyal as the people who just thought about the brand as being good ice cream.

PG: And the trend of people caring about the sustainability attributes of brands and the companies that produce them has only intensified.

JS: When I started in 2010 as CEO of Ben and Jerry’s, I was asked, “Why are you doing all this [sustainability] stuff?” Now, it’s like, why aren’t they doing it? In 10 years’ time, the situation has flipped, and the reason is because consumers care, and they feel they can make a difference by buying the products that do better for the things they care about.

PG: Let’s revisit the conversations you are having with retailers about Unilever’s product innovation pipeline, marketing support, taking price and other real-world considerations of retail partnerships.

JS: Phase one of any strategic discussion with a retailer today is centered around the big issues that we’ve got to solve together, be that data and insight, be that around how we optimize our investments around their shoppers, be that around how we address plastic. Even diversity and inclusion is high on the agenda. It is clearly on the retailer’s, and our interest that that shopper who comes into that store and cares about these different issues is engaged and connected around them. We’ve really moved to, how do we solve this, and what are the best ways of doing it?

Let’s be also very transparent and honest that on pricing and promos, we’re sort of in the same boat as we’ve always been. We’re negotiating, we have different points of view, and we argue and we analyze and all of that. We’re still in a competitive marketplace with different pressures, and we see those sometimes differently with retailers. But it’s very different when you’re trying to solve these issues fundamentally to how do we drive engagement of the shopper in your stores and on your e-commerce platforms, and then we go to pricing and all that other stuff.

PG: You hear more companies talking, as Unilever does, about being a regenerative company, and the concept of doing more good instead of less harm. It’s a very aspirational goal you have. PG: That’s a challenge with a lot of sustainability initiatives. People want to recycle, but the system is fragmented and broken.

JS: There’s sort of a three-step process. We are investing in the recycling infrastructure through funds and partnerships. Then we move to post-consumer recycled plastic use, and we have technology that really allows us to create as close to a clear plastic as humanly possible. And that, of course, creates a demand and a value in the recycled plastic, which allows the recycling industry to spend a bit more money sorting it, because they can sell it back to us.

“Consumers care, and they feel they can make a difference by buying the products that do better for the things they care about.”

—Jostein Solheim, EVP of Foods and Refreshment for North America, Unilever

JS: The idea is that through your whole ecosystem as a business, can you move from being a carbon emitter to carbon neutral to carbon positive? And that’s not by using financial instruments. Are we there yet? No. A couple of big things are really tough. One is just a basic measurement. We know for a fact that we have studies and science behind the basic practices of regenerative agriculture and its impact on soil health, and, to some extent, implied carbon sequestration. But it is another thing to measure these impacts at scale and claim them in your annual report. We are also looking at things like deforestation and reforestation. Again, how do you measure it? Those are the things that we want to solve as an industry over the next 10 years, and how we make it work economically throughout the entire supply chain.

Feeding Your Shoppers — Safely & Sustainably

AN INTERVIEW WITH KEVIN IGLI, SVP & Chief Environmental Officer, Tyson Foods, Inc.

As an industry leader in protein-centric brands, Tyson Foods plays a critical role in feeding the world — and that includes your shoppers. As Kevin Igli, Tyson’s SVP & chief environmental officer, told Progressive Grocer, the company takes that responsibility to heart. Here, he shares the company’s vision of sustainability — one focused on social, environmental, and economic stewardship.

Progressive Grocer: How is Tyson Foods meeting its mission to sustainably feed the world?

Kevin Igli: Online searches related to food safety are the highest they’ve been since October 2020. Food safety, along with sustainability, are top-of-mind for consumers. They should be top-of-mind for grocery retailers, too. At Tyson Foods, we integrate safety, sustainability, quality, and continuous improvement at every touchpoint through the supply chain.

Throughout our history, we have found innovative ways to feed people responsibly, and we’re on a journey to find new ways to do so as the world’s population continues to grow. Through our new sustainability framework, The Formula to Feed the Future, we’re thinking differently about how to solve the most complex problems and how we can partner and collaborate with a broad group of stakeholders as we aim to sustainably feed the world, together.

Regulatory compliance, of course, is fundamental and continuous improvement is our focus. We take stringent measures to ensure the safety of our food, our team members, the environment, and the animals within our supply chain. We’re proud of our food safety and quality assurance (FSQA) team of more than 3,200 professionals who support operations at 139 facilities in the U.S.

PG: The beef industry has been under fire for misconceptions about issues such as greenhouse gas emissions, and nonmeat proteins have reaped the benefit. How do you counter those criticisms?

KI: In FY2020, during a global pandemic, we made great strides toward accomplishing our emissions-reducing goals: • We reduced water intensity by 7.7% against a 2015 baseline year — a big step toward reaching our goal of reducing water use by 12% by 2020. • We enrolled 408,000 acres as part of our land stewardship target to influence environmental outcomes on 2 million acres of row corn crop. • We’re continuing our work with Where Food Comes From and their BeefCARE program to verify sustainable beef production practices on 5-million-acres of grazing land. • We diverted almost 5.2 million pounds of waste from landfills, a 60% increase from the previous year. That moved us farther along our path toward reducing operational waste output, increasing our recycling footprint, and reusing secondary materials. • We recently announced our ambition to achieve net zero greenhouse gas (GHG) emissions across our global operations and supply chain by 2050. This ambition is an expansion of our target approved by the Science Based

Targets initiative (SBTi) to reduce GHG emissions 30% by 2030. A few key focus areas for achieving net zero include: › Updating our baseline for emissions to align with limiting global temperature rise to 1.5°C, consistent with the Paris Agreement, by the end of 2023. › Establishing a pathway to using 50% renewable energy across our domestic operations by 2030. › Completing our initial land stewardship target of engaging 2-million feed acres and expanding the total acres by 2025, including a total target of 100% of feed purchased by 2030. › Expanding our current 5-million-acre grazing lands target for sustainable beef production practices by 2025. › Continuing work to eliminate deforestation risk throughout its global supply chain by 2030.

PG: How is Tyson Foods addressing workplace safety, too?

KI: At Tyson Foods, the health and safety of our team members is our main focus, which is why we have an ongoing goal of reducing OSHA recordables by 10% year-over-year.

In FY2020, we reduced our total OSHA recordable incident rate by 17% compared to FY2019. That followed our FY2019 introduction of Exposure Reduction Coaches as part of our We Care safety initiative. These coaches are dedicated to in-field coaching and one-on-one mentoring and develop plant safety governance to identify when exposure changes and how to react.

Our commitment to a more sustainable food system is a key part of our purpose: to raise the world’s expectations for how much good food can do. Sustainability is key to the future success of our company.

To learn more about how Tyson’s commitment to sustainability is enhancing its product offerings, visit tysonsustainability.com/.

PG: There are a lot of elements to sustainability, including the consumer piece and the in-home usage and preparation of products. How are you integrating those factors into your sustainability discussions?

“If we could get people to, once a week, open their fridge and say, ‘I’m going to make dinner out of this,’ whatever it is, we would halve this food waste problem.”

—Jostein Solheim, EVP of Foods and Refreshment for North America, Unilever JS: You have what we call scope one, two and three of your carbon footprint. Some folks that talk about how environmentally friendly they are, they talk about scope one, which is just the energy that they use themselves. Scope two is with your extended supply chain, and then scope three is everything, including consumer use. As a sustainable company, we are looking at scope three, which means we assess everything that our products create, from the freezing to the boiling of water to the use of hot water in the shower. Some of those things you can impact, and some you can’t. The key is not to get frustrated about the things you can’t, but to work with the things that you can.

Now, that’s still a loop which is suboptimal. So then we try to reduce the amount of plastic we use, either through coming up with new technology or different packaging formats that are better for the environment. Then, of course, you try to reuse. And that’s an experiment which, in our industry, is tough. It is tough because if you end up shipping your container of mayonnaise and then picking it up and then cleaning it and then filling it and then shipping it, that’s burning a lot of energy.

PG: And very complicated?

JS: It is complicated. That’s why a lot of people say people don’t care. People care about the outcomes. They care about the fact that when they go to the beach and see plastic debris, then you see this plastic floating in the ocean, so people care about the outcomes. Sustainability companies want to brag about all the good work they do. People don’t really care about how you make the sausage. They want the outcomes. That’s what we’re focusing on. How can we make these outcomes relevant and motivational for our consumers?

PG: What’s a good example you can share?

JS: The Hellmann’s Make Taste, Not Waste campaign we launched at the Super Bowl, with Amy Schumer as the Fairy Godmayo, is really clever. About a third of all the food we make is wasted, and about 40% of food waste happens at home. So how do you engage with that? Nobody wants to seem like they’re criticizing people and ourselves, so that’s where we came up with Make Taste, Not Waste. It is anchored on several key things. One is to save money. If you’re throwing away 40% of the food you bought, that’s losing a lot of money. Another is that we often open the fridge and look at what’s in there and go, “I don’t know what to do with this.” We’re doing a bunch of different initiatives around how do you take whatever ingredients you’ve got and make them into a meal? If we could get people to, once a week, open their fridge and say, “I’m going to make dinner out of this,” whatever it is, we would halve this food waste problem.

KELLOGG COMPANY’S COMMITMENT TO BETTER DAYS

A Q&A with Amy Senter,

VP, CHIEF SUSTAINABILITY OFFICER, KELLOGG COMPANY

Progressive Grocer: How did Kellogg Company’s commitment to sustainability originate?

Amy Senter: It dates back to our founder, W.K. Kellogg. He was an early conservationist, a leading philanthropist and an original wellbeing visionary. The commitment to sustainability, for us, is really not about adhering to a recent trend — it’s built into our heritage and values. And today it’s epitomized in the Kellogg’s® Better Days global purpose platform. We’ve pledged to create Better Days for three billion people around the world by the end of 2030, by focusing on the interconnected issues of wellbeing, hunger relief and climate resiliency. We’re heavily invested in the initiative, targeting specific goals and tracking our progress on a regular basis. This type of sustainability pledge harks back to the very beginnings of Kellogg Company.

PG: In what ways are Kellogg products helping to sustain the planet?

AS: Research shows that eating a plant-diverse diet is good for people and for the planet because foods made from plants support physical wellbeing while requiring less land and water to produce than do animal-based foods. Today, across Kellogg globally, we’re proud that 86% of the recipes for our foods are made from plants. And we’re doubling down on plant-based foods to drive our growth — in 2020, 100% of our breakthrough innovations, launched globally, were plant-based. Because of these ongoing commitments, Kellogg has been included on the Dow Jones Sustainability Index, and recognized with some of the highest honors from FTSE4Good, the Corporate Human Rights Benchmark and other notable organizations. We’ve received the highest Environmental Social Governance rating by MSCI — the only U.S. food company to do so. As a leading cereal and snacks company, we truly embrace our role in taking care of our planet.

PG: Is Kellogg able to maintain these sustainability efforts on its own?

AS: Not at all. Kellogg believes in the power of partnerships. We team up with many stakeholders, including farmers, retailers and non-profit organizations, to achieve the big ambitions that we’ve laid out. Our partnerships with retailers can help them achieve their own sustainability goals as we create effective ways to bring all this positive work to life in their stores. Customers like Walmart collaborate with Kellogg through the Midwest Row Crop Collaborative, with the goal of supporting farmers to grow sustainably and regeneratively. Others like Ahold-Delhaize help us address the critical issue of food waste. And smaller partners also share our ambitions — Niemann’s, for instance, is collaborating with Kellogg and the National Young Farmers Coalition to support the next generation of Illinois farmers.

PG: How have all these efforts affected the farming community?

AS: Our work is genuinely focused on peoplecentered outcomes, especially when it comes to U.S. farmers and women farmers. These individuals are at the heart of all that we do. Kellogg is committed to supporting one million farmers and workers by 2030 — to date, we’ve already supported almost 500,000 farmers and workers! We work specifically with family-owned farms. One example is the partnership we’ve formed with Meijer stores to support farmers like Mike Milligan around Michigan’s Saginaw Bay, where we collaborate with local conservation partners who give farmers technical support to adopt soil health practices that protect the watershed. Beyond this, we like to highlight the partnerships we’ve formed with women-owned farms. Rice farmers like Meryl Kennedy in Mer Rouge, Louisiana and Jennifer James in Newport, Arkansas supply the grain for our beloved Kellogg’s® Rice Krispies. We help with innovative efforts to employ sustainable practices on these farms, and the farmers in turn take great pride in placing their ingredients inside Kellogg products.