Toolkit for strengthening sustainable retail value chains through quality labels - 3Keel

Page created by Phyllis Phillips
 
CONTINUE READING
Toolkit for strengthening sustainable retail value chains through quality labels - 3Keel
Toolkit for strengthening sustainable
      retail value chains through quality labels
Supporting the development of sustainable food retail value chains
    through customer engagement, quality programmes and local
 partnerships delivered through standards and labelling initiatives

                             With the support of
Toolkit for strengthening sustainable retail value chains through quality labels - 3Keel
The designations employed and the presentation of material in this information product do not imply the expression of any opinion
           whatsoever on the part of the Food and Agriculture Organization of the United Nations (FAO) or the European Bank for
Reconstruction and Development (EBRD) concerning the legal or development status of any country, territory, city or area or of its
        authorities, or concerning the delimitation of its frontiers or boundaries. The mention of specific companies or products of
manufacturers, whether or not these have been patented, does not imply that these have been endorsed or recommended by FAO
   or EBRD in preference to others of a similar nature that are not mentioned. The views expressed in this information product are
                                          those of the author(s) and do not necessarily reflect the views or policies of FAO or EBRD.
Toolkit for strengthening sustainable retail value chains through quality labels - 3Keel
Creating shared value in retail value chains through
FOREWORD                                         product labels and brands

Addressing the sustainability of the food system will make a significant contribution to meeting global sustainability ambitions as outlined in the 2030 Agenda for
Sustainable Development. In particular, the Sustainable Development Goals 12 (SDG12) focuses on production and consumption and includes a specific target on
“adopting sustainable business practices and reporting”. There is broad consensus by Governments that the SDGs can only be achieved with the involvement of
the private sector working alongside public institutions, the UN system and other international institutions, local authorities, civil society, as well as the scientific
and academic community. Thus, Governments in the Post-2015 declaration “…call on all businesses to apply their creativity and innovation to solving sustainable
development challenges”.
Achieving sustainable business practices includes adopting supply chain management practices that create and protect long-term environmental, social and
economic value for all stakeholders involved, while ensuring profitability and responding to market needs. Many food business operators are keenly interested in
finding efficient ways to pursue sustainable food supply practices and inform consumers about the qualities of the products that they sell. On the other hand,
consumers actively seek detailed information about products that have features serving their health needs and are consistent with their values. As a result of these
varied interests, a number of public and private initiatives have started communicating sustainability-related information about food to consumers, introducing
labels and logos both in-store and on-pack. Standards and certifications have been increasingly adopted by companies to demonstrate the sustainability
performance of their value chains or final products in specific areas.
In particular, food retailers play a key role along the value chain in that they can leverage local partnerships and customer engagement. Food retailers are held
responsible for the products that they offer and for the sustainable behavior of their suppliers, acting as gatekeepers between producers and consumers. Adopting
this position, retailers can influence the behavior of their supply chain partners and their customers. They can help incorporate sustainability along their supply
chains, for instance by enhancing changes in production processes (e.g. transport, storage and packaging) and consumption patterns with regard to economic,
social and environmental issues. Some retailers have also started creating their own sustainability labels and logos, assuming the communication to consumers.
Addressing SG12 provides also an opportunity for business.
In recent years, the Food and Agriculture Organization of the United Nations (FAO) and the European Bank for Reconstruction and Development (EBRD) have been
collaborating to strengthen sustainable value chains in the countries where they operate. As highlighted in EBRD’s Agribusiness Sector Strategy 2019-2023, in order
to achieve higher productivity and added value, investments supporting innovation, product quality and safety and standards are required.
This FAO-EBRD publication is intended to serve as guidance for retailers and help the decision-making process leading to pursuing, adopting or creating
sustainability standards or labels. It addresses sustainability as a competitiveness factor along the value chain, assessing how the efficient implementation of
sustainability labels and schemes can help business models achieve inclusive and efficient value chains. It explores what are key business challenges and benefits of
investing in more sustainable food retail value chains. It also explores the role of food business operators, and in particular retailers, in accelerating the sustainable
transition of food systems. Furthermore, it provides examples of best practices, identifying critical points for success and issues that should be addressed through
the label/brand development and consumer communication process. Moreover, it highlights specific lessons learned and experiences from a total of four retailer
case studies exploring practical examples of retail label development and implementation.

                                                                      Natalya Zhukova, Director
                                                                      Agribusiness Team of the European Bank for Reconstruction and Development (EBRD)
Toolkit for strengthening sustainable retail value chains through quality labels - 3Keel
About this toolkit
Retail labels and brands: sustainability through local partnerships and quality programmes
Guidance for retailers on designing and developing customer-facing programmes

Environmental and social                 The most sustainable food retail value
responsibility has become a strategic    chains are delivered through three
imperative for businesses. The UN        interdependent strategies that are
Sustainable Development Goals            underpinned by strong value chain
highlight the myriad issues that are     governance:
driving more responsible supply
chains whilst exposing the               • Local partnerships – engaging,
significant contribution our food          supporting and working with suppliers,
system plays in the delivery of a          stakeholders and customers to support
better future for our world.               the delivery of more sustainable value
                                           chains.
Retail companies operate in a unique
                                         • Quality differentiation – providing
position within the food system,
                                           responsibly produced products
being neither the producer nor
                                           increases the value proposition to
consumer of products but
                                           customers by enabling them to support
nevertheless being a critical
                                           the delivery of economic, social, and
influencer for how both of these
                                           environmental outcomes.
activities take place. The role of the
retailer within a sustainable retail     • Customer engagement –
value chain is to support the              communicating product, brand and
development of responsibly                 business initiatives and performance to
produced products whilst                   demonstrate action, impact, and
encouraging and communicating              opportunities.
with households as to how their
purchases can align with their
values.
Toolkit for strengthening sustainable retail value chains through quality labels - 3Keel
About this toolkit                                                     Feedback lessons            1-
                                                                                              INTRODUCTION
This document has been produced to provide practical guidance
for retailers on how they can develop more sustainable value
chains from concept to launch. The document presents key                  6-
                                                                                                                     2-BUILD
considerations and suggests approaches to everything from             COMMUNICATE
                                                                                                                    INTERNAL
creating the business case for labels – through to scoping,           TO CUSTOMERS
                                                                                                                  BUSINESS CASE
implementation and communicating claims to customers (see                  AND
                                                                                                                   FOR ACTION
section headers, right). Businesses can use the toolkit to engage     STAKEHOLDERS
their teams and suppliers in the process and identify useful
resources that can support the step-by-step plan to implement a
variety of potential initiatives.

                                                                       5-IMPLEMENT
                                                                                                                    3-SCOPE
    Toolkit navigation
                                                                            IN
                                                                                                                    STRATEGIC
                                                                       COLLABORATIO
                                                                                                                    OPTIONS &
                                                                          N WITH
                                                                                                                   CREATE TEAM
                                                                         SUPPLIERS
    • This toolkit doesn’t need to be read          Download at
      cover-to-cover – it is designed so that       Adobe.com                                 4-DECIDE ON
      users can dip in and out of sections                                                   SUPPORT CHAIN
    • Each section contains a summary and a                                                  STANDARDS OR
      key resources page that contains useful                                                   CRITERIA
      links to other information and data that
      can support your activities
    • The PDF has interactive navigation and
      external hyperlinks. To use this
      functionality open file in Adobe PDF
      reader (which can be downloaded by
      visiting www.adobe.com )

     Introduction             Business case          Process        Requirements          Implement          Communication
Toolkit for strengthening sustainable retail value chains through quality labels - 3Keel
Acknowledgements
This toolkit was developed as part of a technical cooperation project funded by
the European Bank of Reconstruction and Development (EBRD) and the Food
and Agricultural Organization of the UN (FAO).

The toolkit has been prepared based on the inputs from Will Schreiber and Richard
Sheane from 3Keel, with contributions and supervision from Emilie Vandecandelaere,
project coordinator and Arianna Carita, standard expert, from FAO Investment center.
The authors would like to acknowledge the support and input of the following experts
during the development of this tool kit: Hazel Culley and Hannah McIntyre (Marks &
Spencer), Cansu Ergün (Migros), Bertrand Swiderski and Matthew Mellin (Carrefour),
Ana Tomic (Bingo), Judith Batchelar (Sainsbury’s), Euan Murray and Christy Slay (The
Sustainability Consortium), Luis Samper (4.0 Brands SAS), Sara Walton (British
Standards Institute), Joe Wozniak (International Trade Centre).
In addition, the authors would like to thank Emmanuel Hidier, Senior Economist, FAO
and Nemanja Grgic, Technical Cooperation Manager, Agribusiness, EBRD, for support
in the development of the project and technical comments on the contents, as well as
Wafaa El Khoury, Chief, Europe and Central Asia, Near East and North Africa, Latin
America and the Caribbean Service, Investment Centre Division, FAO, and Mohamed
Manssouri, Director, Investment Center Division, FAO, for their overall guidance.
Valuable support at the final stages of the publication and dissemination was provided
by Nada Zvekic, Communications Officer, FAO and Stephanie Leontiev, Project and
Communications Officer, FAO.

Further information
For further information about this tool kit please contact FAO
Investment Centre at Investment-Centre@fao.org
or EBRD Agribusiness team at agribusiness@ebrd.com

     Introduction             Business case             Process                  Requirements   Implement   Communication
Toolkit for strengthening sustainable retail value chains through quality labels - 3Keel
Contents

       Introduction                            Building the                           The label and brand
01                                       02    business case                    03    development process

       An introduction to the business         Key costs, benefits and                An overview of the key steps
       case and strategic options for          methods for demonstrating              and considerations when
       embedding quality and                   the business case of labels to         developing a label or brand.
       sustainability in products and          internal decision-makers and           How to scope & set-up project
       brands                                  investors                              governance

       Setting requirements and                Implementation                         Customer communication
04     standards
                                         05                                     06
       Options for adopting, adapting          Ensuring label and standards           Options for engaging with
       or developing value chain               systems are trusted, efficient         customers – and ensuring
       standards and codes of                  and deliver intended                   claims are credible
       practice                                outcomes

 Introduction            Business case   Process                 Requirements   Implement             Communication
Toolkit for strengthening sustainable retail value chains through quality labels - 3Keel
Introduction
                                                                                     01
Driving sustainability through labels, brands and local partnerships

                         W hy lab els?
 Introduction     Business case          Process   Requirements        Implement   Communication
Toolkit for strengthening sustainable retail value chains through quality labels - 3Keel
Section 1 contents
Introduction to sustainable retail value chains
This section introduces the concept of sustainable retail
value chains and explores why businesses are adopting
labels and brands to support continuous improvement.

          Sustainable retail value chains                                              Summary
 1.1      What are they and why does it matter to retail                     1.4       Key take-aways from section
          businesses?

                                                                                       Resources & tools
                                                                             1.5
          The business case for labels and brands
 1.2      Customer engagement and standards mitigate risk,                             Additional sources of information to support the scoping
                                                                                       and planning process
          support growth and productivity

          Retailer case studies
 1.3      Key insights from four retailers who have
          implemented labels

 Introduction            B u s i n e s sWchy
                                          a s elab els? P r o c e s s   Requirements         Implement               Communication
Toolkit for strengthening sustainable retail value chains through quality labels - 3Keel
1.1 Sustainable retail value chains
Sustainability: a strategic issue for 21st Century retail businesses
                                                          Figure: Food system linkages to UN Sustainable Development Goals
Addressing environmental and social issues                     1.2 billion people work in agriculture - about
has become a strategic issue for retail                                                                       Obesity has a total economic cost of Agriculture uses about
                                                               31% of the global workforce
                                                                                                              $2.0 trillion e.g. health costs, lost 70% of global water
businesses wishing to remain competitive,
                                                                                                              productivity, etc                     withdrawals
retain customers and demonstrate prudent risk
management to investors and policymakers.

Aside from providing a basic human need, the
food system’s role as a major employer and
user of natural resources means that
addressing its sustainability will make a
significant contribution to meeting global
sustainability ambitions. More than half of
the United Nation’s ‘Global Goals’ would be
supported through improvements to the
sustainability of the food system (see figure,
right).

This document provides you with an
introduction on how to leverage local
partnerships and customer engagement to                     The food system causes more
deliver more sustainable retail value chains.                                                  29% of commercial fish             Agriculture occupies nearly 40% of total
                                                            than 20% of global greenhouse
                                                                                               populations are fished at at       land area and is a major driver of
                                                            gas emissions
                                                                                               an unsustainable level             deforestation

  Introduction          B u s i n e s sWchy
                                         a s elab els? P r o c e s s               Requirements               Implement                  Communication
1.1 Sustainable retail value chains
    Definition
A sustainable food value chain is “the full range of farms and firms and
their successive coordinated value-adding activities that produce                  Figure: Example
particular raw agricultural materials and transform them into particular           issues addressed in
                                                                                   sustainable retail
food products that are sold to final consumers and disposed of after use,          value chain
in a manner that is profitable throughout, has broad-based benefits for            projects (FAO)
society and does not permanently deplete natural resources” (FAO, 2014).
The concept of sustainable food value chain provides the framework for                                     ECONOMIC
sustainable development and poverty reduction, by defining it, ideally as                                   IMPACTS
a food value chain that:                                                                                      Pro ts
                                                                                                           Jobs/i ncomes
                                                                                                           Tax revenues
     is profitable throughout all of its stages (economic sustainability);                                 Food supply
     has broad-based benefits for society (social sustainability); and
     has a positive or neutral impact on the natural environment                                   Inclusive            Green
      (environmental sustainability).                                                                growth              growth

                                                                                                                SFVCD
Within this guidance it is important to note that sustainability is
considered as a pathway (not a state) and supports companies in taking                     SOCIAL                          ENVIRONM ENTAL
                                                                                          IMPACTS                             IMPACTS
further steps on that journey – regardless of their starting points. For           Added value distribution Eco-social      Carbon footprint
example, a company early on that journey may focus on activities that                 Cultural tr aditions   progress        Animal health
have a clear short-term business case with indirect sustainability benefits          Nutrit ion and health                   Water footprint
                                                                                   Workers rights and safety                Soil conservation
in a small number of areas. For example, a retailer could commit to                    Animal welfare                         Biodiversity
longer term contracts with local suppliers to support investment in                      Institutions                      Food loss and waste
better quality systems and resource efficiency.                                                                                   Toxicity

     Introduction           B u s i n e s sWchy
                                             a s elab els? P r o c e s s      Requirements         Implement                  Communication
1.1 Sustainable retail value chains
Retail opportunities to leverage partnerships, quality & customer engagement
Sustainable food retail value chains can be supported through three related strategies: building strong local value chain par tnerships,
investing in product quality and finally engaging with customers. These all benefit from strong value chain governance models .

Local partnerships                                        Quality                                 Customer
                                                          differentiation                         engagement

The environmental and ethical issues                     Investments in the sustainability of     Retailers are in a unique position to
that retail businesses face are                          value chains can complement efforts      engage with customers. Labels,
complex and interconnected:                              to differentiate products and support    brands and the standards that
Partnerships – within supply chains                      broader product quality messaging.       underpin them have been identified
and with external stakeholders – are                     The added value that customers           as a tool for supporting the delivery
critical for delivering credible and                     receive from quality products can        of the UN Global Goals. Information
effective improvements in value chain                    support the delivery of economic,        technology also offers new
quality and sustainability.                              social and environmental outcomes.       opportunities to engage with
                                                                                                  customers.

                                                      Strong value chain governance

  Introduction           B u s i n e s sWchy
                                          a s elab els? P r o c e s s           Requirements     Implement              Communication
1.1 Examples of labels
     Labels cover a variety of topics that address different social expectations
                                                                                                         The Nordic Keyhole has been shown to help drive product
Some labels address
                                                      Nutritional/ health                                development and healthier alternatives in the Scandinavian retail
a combination of                                                                                         sector. It is used to highlight healthier products.
these issues. We go                                   benefits
into more detail on
                         Consumers messaging topics

the types of label and                                                                                   Labels can tell customers about the environmental performance of a
different                                             Environment                                        product such as the France’s Indice Carbone, or they relate to
                                                                                                         production requirements for growers, such as LEAF Marques that
implementation                                                                                           require the use of Integrated Farm Management principles.
mechanisms in
Section 4.
                                                                                                         The French Label Rouge scheme specifies the best production and
                                                      Food quality -                                     encourages the use of Integrated Farm Management principles. It also
                                                      organoleptic                                       sets spec methods to ensure higher quality on final product as
                                                                                                         perceived by consumers through taste. It covers a large variety of
                                                                                                         products, mainly food but not only.

                                                                                                         The Símbolo de los Pequeños Productores (SPP) – small-producers’
                                                      Social welfare and equity                          symbol, tells and guarantees consumers about democratic, self-
                                                                                                         managing organizations of small producers, and commercialization
                                                                                                         under fair conditions, in view of improving prospects for life.

                                                                                                         Labels can be used to promote and guarantee specific quality linked to
                                                      Origin & traditional                               origin, such as in the case of Colombian coffee, through a geographical
                                                      methods                                            indication (GI), protected as an intellectual property right. Specific
                                                                                                         standards define the production and processing practices as well as
                                                                                                         final product characteristics.

       Introduction                                    B u s i n e s sWchy
                                                                        a s elab els? P r o c e s s   Requirements             Implement                  Communication
1.1 Label characteristics
General considerations and components of labels and standards
There are multiple types of elements that are considered during the design of product standard and label, including the follo wing key
characteristics from a review of over two hundred commonly used ones on the market in 2018:

     OWNERSHIP                                     STANDARD                         CERTIFICATION                            AUDIENCE
 The owner of the label may be a            Not all labels will have a written    Some labels can be self-certified    Some labels or standards serve
 private company, non-profit                standard underpinning their           by companies whilst others           a business-to-business (B2B)
 organisation, or public body.              credibility and application.          require rigorous third party         purpose rather than business-
 Depending on the owners’                   Those that are developed by           review and registration with a       to-consumer (B2C). These
 interests, the requirements                private sector bodies may be          third party. High credibility        standards and labels are not
 could be set privately and the             kept confidential leading to          labels often require some level      limited to purely operational
 scope for influence by other               external uncertainty regarding        of third party certification,        performance or food safety
 organisations may be limited.              their effectiveness and role in       which can take many forms            measures as they could also
                                            driving significant change in the     (e.g. chain of custody               relate to ‘hidden’ issues that
 Example                                    value chain.                          traceability, operational            retailers wish to manage in their
 Vivi Verde is a label and brand                                                  performance).                        supply chain despite low public
 developed by retailer Coop Italia          Example                                                                    awareness of the challenge.
 in 2009. It relies upon existing           Criteria and performance              Example
 third-party organic standards to           requirements for the Small            Origin Green provides a flexible     Example
 underpin its requirements.                 Producer’s Symbol are publicly        framework for setting individual     Round Table on Responsible Soy
                                            available.                            business targets, however it still   (RTRS) is primarily recognised in
                                                                                  requires external reviews every      B2B environments only.
                                                                                  18 months.

  Introduction              B u s i n e s sWchy
                                             a s elab els? P r o c e s s         Requirements              Implement             Communication
1.2 The business case for labels & brands
The need for differentiation in retail to maintain a competitive advantage

Competition in the retail market is as intense as ever, leading branded
label products to become a critical battleground for consumer loyalty.
Retailers are having to keep pace with changing shopping demands –
in particular, they are responding to increasing demands for healthier
products from more transparent, ethical and environmentally-friendly
supply chains with the launch of premium products. Differentiation is
also being supported through the launch of products with regional
provenance that leverage consumer interests in local flavours,
ingredients and recipes.                                                         Promoting human rights and advancing sustainability has a key role
In response, retailers are seeking to address Sustainable Development            to play in the M&S transformation. It is helping make our business
Goals (SDGs) by investing in improved corporate social responsibility.           and our supply chains more resilient and cost effective. It has an
                                                                                 impact on how our customers perceive the value and quality of M&S
This toolkit focuses on how labels and brands can enable new product
                                                                                 products and it matters to our colleagues.
development that creates business value and at the same time
                                                                                                                  Louise Nicholls, Marks & Spencer.
increases value chain sustainability. This covers a range of
opportunities ranging from provenance and quality claims through to
large-scale value chain partnership programmes that include producer
capacity building and enhanced environmental and ethical practices.
The business case for these sorts of initiatives is summarised in detail
in Section 3.                                                                                             See Section 1.3 for the experiences of
                                                                                                          four retailers who have used
                                                                                                          standards and customer messaging to
                                                                                                          improve value chain sustainability

  Introduction             B u s i n e s sWchy
                                            a s elab els? P r o c e s s    Requirements        Implement               Communication
1.3 Retailer case studies
Company experiences of using labels and brands for sustainability value chains

As part of the development of this
guidance document, four leading
European retailers provided insights
on their experiences of developing
customer-facing sourcing initiatives                                Forever Fish                    S u ppo r t i n g l o c a l
focusing on quality, provenance                                    product label                    bu si n esses w i t h
and/or sustainability.                                          launched to shine                         f a v o u r a bl e
                                                                  spotlight on the                    t r a di n g t er m s
                                                                business’s work on                      a n d pu r po se
This section summarises some of the                              seafood sourcing                   dr i v en m a r k et i n g
key benefits to reatilers of adopting
these approaches.

                                                                D ev el o pi n g a f a i r                 D ev el o pi n g
                                                                      pr i c e f o r                 l i f est y l e br a n ds
                                                                 pr o du c er s u si n g            t o pr o m o t e m o r e
                                                                      c u st o m er                        su st a i n a bl e
                                                                 en ga gem en t t o                        pr o du c t i o n
                                                                  dev el o p a n ew
                                                                         br a n d

 Introduction          B u s i n e s sWchy
                                        a s elab els? P r o c e s s                          Requirements                 Implement   Communication
1.3 Retailer case studies

                  Forever Fish –                                                  Kvalitetan Proizvod
                  Sustainable fish product                                        – Supporting local
                  label on all fish products                                      producers with
                  alongside consumer                                              favourable trading
                  facing campaign on                                              terms and product
                  marine conservation                                             placement

                                                                                          Good Living – Helping
                                                                                          customers select
                    C’est qui le patron?!                                                 products that have
                    (Who’s the boss?!) –                                                  strong environmental,
                    Customer-led                                                          social and commercial
                    product pricing                                                       producer benefits

Introduction   B u s i n e s sWchy
                                a s elab els? P r o c e s s   Requirements   Implement           Communication
1.3 Retailer case studies

MARKS&SPENCER                                   BINGO                                    CARREFOUR                                 MIGROS

Forever Fish is one of M&S’s most               Domestic sourcing is embedded in         In 2016, farmers in France began          In 2013, Migros expanded its supply
successful labelling campaigns. The             Bingo’s way of doing business. 51% of    protesting low milk prices, which         chain sourcing requirements to
label was used to draw attention to             the products on the shelves are          were causing farmers to go out of         include stronger environmental,
fish sustainability and was                     produced domestically in order to        business. Carrefour teamed up with        human health and animal welfare
underpinned by a robust seafood                 support local producers and the wider    the French food waste activist group      criteria to its egg and poultry
sourcing policy and activities, such as         economy. To make these products          “Gueules Cassées” to develop a fair      products with its “Good Chicken”
use of Marine Stewardship Council               recognisable on their store shelves,     price, consumer-based milk scheme         label, and then creating broader
certification. The label was put on             Bingo has adopted the ’Kvalitetan        called C’est qui le patron? (Who is the   “Good Meat” and “Good Agriculture”
every own-brand fish product. The               Proizvod’ label and actively promotes    boss?). It is run by a collective, La     labels. It is now using this brand with
campaign, which was in collaboration            the use of this label with their         Marque du Consommateur, between           a range of other products, including
with two conservation charities, had            suppliers.                               activists, small dairy producers, and     non-food, to create a broader
excellent customer reach and strong                                                      the Carrefour supermarket chain.          initiative to help its customers choose
support in the business.                                                                                                           low-impact lifestyle products in a
                                                                                                                                   “Good Living” brand.

       Go to case study                                   Go to case study                      Go to case study                            Go to case study

             Introduction                 B u s i n e s sWchy
                                                           a s elab els? P r o c e s s    Requirements              Implement               Communication
1.3 Retailer case studies
Key lessons
         CUSTOMER FOCUS                                                               The Forever Fish programme and label was
                                                                                      viewed very positively internally and got great
 01      Be clear on customer angle from the start. Undertake customer research
         to understand perceptions & benefits of label. Get your marketing and PR     traction with our customers. To protect our
         colleagues on board early.                                                   business brand we had to be totally comfortable
                                                                                      that we had confidence in our policies and
                                                                                      standards are delivering sustainable fish
         PRODUCER ENGAGEMENT
                                                                                      products.
 02      Suppliers are critical delivery partners.
                                                                                                                            Hannah Macintyre
                                                                                                            Fisheries & Aquaculture Manager
                                                                                                                          at Marks & Spencer.

         ENSURE LABELS UNDERPINNED BY ROBUST POLICIES & PROCESSES
 03      Claims will be scrutinised so you need to ensure you are comfortable
         that they are credible and can be defended.

         GET INPUT FROM CREDIBLE EXPERTS AND INFLUENCERS
 04      Researchers and civil society organisations can add a lot of value
         to programmes. This includes ensuring the activities are credible
         and deliver meaningful outcomes.

         SET-UP A INTERNAL STAKEHOLDER WORKING GROUP
 05      For the initiative to be a success you’ll need early input and buy -in
         from a range of technical, commercial & communications teams

Introduction          B u s i n e s sWchy
                                       a s elab els? P r o c e s s     Requirements   Implement              Communication
1.4 Summary
Key take-away messages for introduction section

The first section of this document focuses on the
definition of sustainable value chains and introduces the
types of label that can be deployed. It highlights specific
learnings from four retail case studies.

  01                                    02                                03                                   04

Sustainability is an                  Opportunities for all to           A range of options are              We can learn a lot from the
increasingly strategic issue          work on value chain                available to retailers to           work of retailers who have
for grocery retailers                 sustainability – regardless        communicate to                      implemented labels
Addressing environmental and          of starting point                  customers                           From our discussions with a
social issues has become a            Regardless of your business’s      Customer communications             range of retailers key lessons
strategic issue for retail            current activities there are       can address a combination of        include: having a strong
businesses wishing to remain          opportunities to build             topics including social welfare     customer focus; collaborating
competitive, retain customers         business value through             and ethics, environmental           with suppliers; underpin
and demonstrate prudent risk          customer communications on         performance, health and             initiatives with robust policies;
management to investors and           value chain sustainability.        nutrition, organoleptic             and get input from trusted
policymakers.                                                            quality, quality linked to origin   partners.
                                                                         etc.

  Introduction            B u s i n e s sWchy
                                           a s elab els? P r o c e s s      Requirements               Implement              Communication
1.5 Resources & tools
Relevant reports, guidance and data to support your planning

Framework: UN Sustainable Development Goals                                      Guidance: Inclusive Business Models
The UN SDGs are a helpful framework that                                         UN FAO guidelines for improving linkages between
businesses can use to check their activities and                                 producer groups and buyers of agricultural produce.
external communications against.                                                 http://www.fao.org/3/a-i5068e.pdf
https://sustainabledevelopment.un.org/

Report: SDGs mean business                                                       Guidance: Guidance for Responsible Agricultural
A report by ISEAL and WWF outlining how standards                                Supply Chains
can help deliver the UN Sustainable Development                                  A guidance report developed by OECD and FAO
Goals.                                                                           providing support to companies in ensuring that
http://www.standardsimpacts.org/                                                 their operations do not lead to adverse impacts and
                                                                                 contribute to sustainable development.
                                                                                 http://www.fao.org/economic/est/issues/investment/
                                                                                 guidance/oecd-fao/
Case studies: Retail label insights
As part of the development of this toolkit, four                                 Partnership: Retail Horizons
detailed case studies were developed exploring
examples of retail label development and                                         A multi-year project led by the Retail Industry
implementation.                                                                  Leaders Association and Forum for the Future to help
                                                                                 retailers take action on sustainability by providing for
http://www.fao.org/technical-cooperation/investment-                             practical tools around current and future scenarios in
centre/en/                                                                       the retail environment.
                                                                                 https://www.forumforthefuture.org/project/retail-
                                                                                 horizons/overview

  Introduction                B u s i n e s sWchy
                                               a s elab els? P r o c e s s   Requirements             Implement                   Communication
Building the business case
                                                                                             02
Assessing the benefits of adopting new supplier practices

 Introduction    B u s i n e s sWchy
                                  a s elab els? P r o c e s s   Requirements   Implement   Communication
Section 2 contents
Building the business case
This section introduces some useful concepts and tools that can be used to
develop a business case for action. These can be drawn upon at all stages of
the process and are likely to be returned to as the programme evolves. To
jump to a sub-section click the titles below.

          What is a business case ?                                                    Summary
  2.1     What are the options open to retailers? How does a business          2.4     Key take-aways from section
          decide what will deliver the most value?

          Business value drivers                                                       Resources & tools
  2.2     Linking your business case to basic business drivers:
          productivity; growth and risk
                                                                               2.5     Additional sources of information to support the scoping
                                                                                       and planning process

          Types of business case data
  2.3     The sorts of information that can be used to support the
          development of a business case

 Introduction            B u s i n e s sWchy
                                          a s elab els? P r o c e s s   Requirements        Implement                Communication
Intangible business values: More than
                                                                                                            half the US$4 trillion value of retail
                                                                                                            enterprises is locked up in “intangible”

2.1 What is a business case?
                                                                                                            assets such as brand reputation
                                                                                                            (Global Intangible Finance Tracker)

Demonstrating standards, claims and brands deliver business benefits
A ‘business case’ is a frequently used term that has many meanings and definitions. In the context of developing retail
standards, claims and brands, it is important to be aware of some of the elements of a good business case – and also some of
the challenges you will face when quantifying it.

  Elements of a good business case                                          Key issues to be aware of
                                                                            When developing a business case for activities that
  A good business case is one that is carefully designed to fit a
                                                                            increase retail value chain sustainability through
  specific set of circumstances and objectives:
                                                                            labels and claims it is important to be aware of the
                                                                            following:
  1.   It is closely aligned to the strategic goals of your company.
       If there are relevant corporate commitments or targets, can            • Some of the most important benefits are likely to be
       you support them through your project?                                   intangible and/or hard to predict. For example, working with
  2.   Clear and compelling explanation of how the net benefits                 suppliers to improve standards can increase resource
       will support one of three broad business value drivers:                  efficiency, but the cost savings to your business will be hard to
       improving productivity; business growth and mitigating                   quantify. Activities that offer good brand protection benefits
       risks (see chart on next page).                                          similarly are hard to put hard numbers on. This makes your
  3.   A clear understanding of the business case audience and                  choice of evidence much more important (see Section 3.3).
       their interests. It can be helpful to identify an internal             • Linked to the above point, the benefits of investing in more
       ‘champion’ who can help guide your choices.                              sustainable retail value chains will therefore likely be more
  4.   Ultimately it must contain compelling evidence and                       strategic and longer-term. For this reason, getting senior
       analysis to convince decision-makers that adopting the                   sponsorship for a project will make the task much easier.
       proposed changes will deliver net benefits.

  Introduction            B u s i n e s sWchy
                                           a s elab els? P r o c e s s   Requirements          Implement               Communication
Examples
                                                                                                                                                M a r ke t

          2.2 Business value drivers
                                                                                                                                                G R OW T H
                                                                                                                                                Unilever’s Sustainable Living
                                                                                                                                                brands grew more than 50%
          The use of partnerships, labels and standards can benefit businesses at all stages of                                                 faster than the rest of the
          the corporate sustainability journey (see diagram below). When developing your                                                        business (Unilever, 2017)
          business case you should consider which of these areas are of most relevance to your
          situation and audience.                                                                                                               There's been a 321% increase in
                                                                                                                                                the number of food products
                                           The stages of corporate sustainability journey                                                       labelled with ethical and
                                                                                                                                                environmental claims between
                              Non-                                           Beyond                 Integrated               Purpose/
                                                     Compliance                                                                                 2011 and 2015
                              compliance                                     compliance             strategy                 Mission
                                                                                                                                                (Agriculture and Agri-Food
                                                                                                                                                Canada, 2016)

                                                                                                                                                Va l u e c h a i n
                                                                                                                                                P RO D U C T I V I T Y
Business value drivers

                                                                                                                                                53% of studies examining the
                                                                                                                                                use of standards in supply
                                     RISK                               PRODUCTIVITY                                     GROWTH                 chains reported increases in
                                                                                                                                                profitability over the long term
                         •   Increased traceability and         •   Closer supply chain                    •   Labels and brands can offer a
                             supplier oversight through             collaboration can help                     key point of differentiation     (ISEAL, 2017)
                             certification helps mitigate           deliver operational                        and help with deeper
                             risks                                  efficiencies through                       customer engagement and          RISK
                         •   Standards reduce risk of
                                                                    better co-ordination,                      trust-building – helping         management
                                                                    resource efficiency and                    defend market positions or
                             reputational damage
                             through poor ethical or
                                                                    food waste management                      build market share               Almost three quarters of millennials
                             environmental practices            •   Enhanced ethical and                   •   Supplier patrnerships can        and "generation Z" are willing to
                         •   Continuouse improvement                environmental                              unlock new product               spend more money on personal care
                             and use of voluntary                   performance helps with                     innovation opportunities –       products that are from companies
                                                                    recruitment and staff                      many of which are focused on
                             standards prepare value                                                                                            that are environmentally friendly
                             chains for new regulations             retention                                  environmental and ethical
                                                                                                               issues                           and socially minded
                                                                                                                                                (ATKearny, 2017)

                             Introduction                   B u s i n e s sWchy
                                                                             a s elab els? P r o c e s s                    Requirements       Implement              Communication
2.3 Types of business case evidence
              From qualitative arguments to detailed cost-benefit analyses
              A ‘business case’ is a frequently used term that has many meanings and definitions. In the context of developing retail
              standards, claims and brands, it is important to be aware of some of the elements of a good business case – and also some of
              the challenges you will face when quantifying it.

                               Evidence type        Description                       Example                                          Comments
                               Qualitative          Logical but unquantified          “Implemeting new standards will help us          This is the simplest type of evidence, but also the
                               arguments            arguments draws on                address risks of ethical and environmental bad   least likely to sway decision-makers
                                                    existing data                     practice damaging our reputation”

                               Competitor           Showing how your                  “80% of our competitors have already             This can be a simple but effective way of
Increasing complexity

                               benchmarking         company compares to               developed product lines with sustainability      demonstrating that a business is at risk of being
                                                    others                            claims”                                          left behind
                               Case studies         Examples of business              “We have seen 5% year-on-year growth in          To be most effective this need to be companies
                                                    benefits seen by other            products with sustainability claim. They are     operating in similar markets
                                                    retailers                         now worth € 100M”. See Section 1 for some
                                                                                      case studies
                               Key                  A quantified measure of           “Companies that have adopted the standard        To be most powerful these need to resonate
                               performance          business benefit                  have seen a 5% drop in quality rejections”       with your target audience
                               indicators
                               Investment costs     Quantification of                 “The programme will cost €200,000 in staff       Being clear on costs helps decision-makers even
                                                    implementation and                time to implement and then €50,000 per           if the benefits are more intangible/strategic
                                                    running costs                     annum for fees and administration costs”

                               Cost / benefit       Quantification of the             “Implementing the standard would have a          For a full examination of cost benefit analysis see
                               analysis             costs and benefits over           payback period of 2.5 years and a Net Present    guidance documents referenced in the
                                                    time period                       Value of €4m”                                    Resources page of this section

                        Introduction            B u s i n e s sWchy
                                                                 a s elab els? P r o c e s s                Requirements               Implement                  Communication
2.4 Summary
Key take-away messages for this section

The section of this document provides an overview of the
business case for implementing a label programme. It talks
in general terms about how to frame the business benefits
with key internal stakeholders.                                                PRODUCTIVITY                         RISK                    GROWTH

  01                                          02                                  03                                       04
Business cases must be                      A business case needs a             Six different types of evidence       Senior buy-in and support is
aligned to strategy & deliver               strong narrative and careful        can support business cases            critical to ensure success
value                                       tailoring                           Regardless of the audience, six       In many instances it will be very
A good business case is one                 A business case is unique to the    different approaches are              challenging to calculate a
that is carefully designed to fit a         organisation and the target         commonly used – often in              robust cost/benefit analysis
specific set of circumstances               audience. A supply chain            combination. These range in           that passes detailed scrutiny.
and objectives. Key ‘value                  director in a discount retailer     complexity from the simple            The benefits of more
drivers’ to focus on are:                   will have very different            (such as qualitative arguments,       sustainably supply chains can
business growth (e.g. new                   interests to a marketing            competitor benchmarking and           often be intangible and long-
customers); productivity (e.g.              director at a high-end grocer.      case studies) through to the          term. Because of this it is
better engaged employees);                                                      more complex (for example             important to get senior buy-in
and risk mitigation (e.g.                                                       detailed cost / benefit analysis)     from strategic decision-makers.
protection of brand & raw
material supply).

   Introduction                B u s i n e s sWchy
                                                a s elab els? P r o c e s s      Requirements                Implement              Communication
2.5 Resources & tools
Relevant reports, guidance and data to support your business case development

Guidance: The business case for sustainable                                  Review: The business benefits of using sustainability
commodities                                                                  standards

Guidance developed for global environmental charity                          Review funded by ISEAL into the benefits of
WWF on how to develop and communicate the                                    standards seen by different types of business –
business case for sustainable commodities.                                   including retailers.
http://www.panda.org
                                                                             http://www.standardsimpacts.org/

Book: HBR Guide to Building Your Business
Case

Harvard Business Review short booklet outlining the
guidance and tools you need to make a strong
business case. Includes details on cost benefit
analysis methodologies.
http://hbr.org

Guidance & tool: The Value Driver Model

A model & toolkit from the UN Global Compact
offers companies a simple and direct approach to
assess and communicate the financial impact of their
sustainability strategies.
https://www.unglobalcompact.org/

   Introduction               B u s i n e s sWchy
                                               a s elab els? P r o c e s s   Requirements              Implement                 Communication
The label & brand development process
                                                                                            03
From scoping to communicating

 Introduction   B u s i n e s sWc hy
                                  a s elab els?P r o c e s s   Requirements   Implement   Communication
Section 3 contents
The label & brand development process
This section introduces the key strategic options open to
retail businesses and summarises the key steps to developing
a label or brand. These are expanded on in later sections. To
jump to a sub-section click the titles below.

          Overview of label/ brand development process                                    Adopting or adapting existing mechanisms
  3.1     What are the key steps in developing and implementing                  3.4      Should you adopt, adapt or develop your own standards
                                                                                          and mechanisms?
          a label or brand?

          Scoping & prioritisation                                                        Summary
  3.2     Decide which value chains and issues to focus on. What will be
          communicated to customers?
                                                                                 3.5      Key take-aways from section

          Strategic options                                                               Resources & tools
  3.3     What are the options open to retailers? How does a
          business decide what will deliver the most value
                                                                                 3.6      Additional sources of information to support the scoping
                                                                                          and planning process

 Introduction            B u s i n e s sWc hy
                                           a s elab els?P r o c e s s      Requirements         Implement                Communication
3.1 Overview of development process
Key stages in developing a label or brand that supports sustainability
There are five steps that businesses need
to go through to successfully develop                                                                   02
                                                                                                 INTRODUCTION
and roll-out a label or brand that helps                               Feedback lessons
deliver improved value chain
sustainability (see figure, right).
                                                                             COMMUNICATE                              BUILD
                                                                             TO CUSTOMERS                           INTERNAL
These steps are expanded upon in
                                                                                  AND                             BUSINESS CASE
subsequent sections of this toolkit. On
the pages that follow we explore best
                                                                             STAKEHOLDERS                          FOR ACTION03
practices in scoping opportunities and
buidling the right team. Although these                                                                                           (Previous section)
are shown sequentially, the process can
be iterative.

It is important to note that this toolkit
focuses on the elements of the process                                       IMPLEMENT IN                            SCOPE
                                                                             COLLABORATIO                          STRATEGIC
that are unique to supporting improved
                                                                                N WITH                             OPTIONS &
value chain sustainability. It does not
                                                                               SUPPLIERS                          CREATE TEAM
provide generic advice on brand                                                                                   04
development and marketing. For this
reason, it is critical to get marketing
                                                                                            05    DECIDE ON                       (This section)
teams engaged early in the process so                                                            SUPPORT CHAIN
                                                                                                 STANDARDS OR
they can ensure that new products and
                                                                                                    CRITERIA
claims align with wider business
marketing strategy.

 Introduction           B u s i n e s sWc hy
                                          a s elab els?P r o c e s s          Requirements       Implement       Communication
3.2 Developing an approach
                                                                                                                             4
                                                                                                                                            Prioritise actions
    Identifying what is right for your business                                                                                             Create a list of supply
                                                                                                                                            chains, product groups
                                                                                                                                            or categories, or

                                  2
                                                   Why are you taking action?
                                                                                                                                            geographic regions to
                                                   Have a clear understanding of
                                                                                                                                            focus on. This is
                                                   what the business interest is in
                                                                                                                                            covered in the
                                                   addressing the issue. For
                                                                                                                                            following sections.
                                                   example, investor requests or
                                                   supply chain resilience.

                                                                                                               Settingyourgoals
                                                                                                                      PROBLEM STATEMENT
                                                                                                                      Clearly articulate what the purpose is for
                                                                                                                      the initiative and why your business is
                                                                              Determine your influence
                                                                                                                      well placed to deliver it
                                                                              Consider what your business

                                                                    3
                                                                              can realistically achieve.              SCOPE
                                                                                                                      Define what will be addressed (e.g.
                                                                              How close are your direct
                                                                                                                      product placement), and what will not be

1
    Review your company values                                                suppliers to the issue(s) you           (e.g. supplier contracts), in what you
                                                                              are trying to affect? What              develop
    Before starting a new initiative or
                                                                              levers can you pull to
    project you will need to identify                                                                                 RESOURCING
                                                                              incentivise change?
    what is appropriate for your                                                                                      Who is critical for the team and what
    business based on existing                                                                                        level of human and physical resource is
    commitments and approaches.                                                                                       needed to deliver?

      Introduction             B u s i n e s sWc hy
                                                 a s elab els?P r o c e s s           Requirements            Implement            Communication
3.2 Prioritising value chains
    Create short list of products and raw materials to investigate
One of the first tasks following an alignment of your vision and principles with the desired
for an initiative is identifying where you should focus. The case for attention is influenced
by three things: the nature of the value chain; your company’s situation; and the state of
the operating market. The more of the criteria below that are relevant to a value chain, the                    Prioritising value chains
greater the case for working with value chains to increase sustainability through the use of
standards & labels.                                                                                                         BACKGROUND RESEARCH

     NATURE OF                      YOUR COMPANY                                 OPERATING MARKET
                                                                                                                  01        Use sales data, research and criteria, left,
                                                                                                                            to identify categories wit good potential
                                                                                                                            for launching initiative.
    VALUE CHAIN                       SITUATION                                     CONDITIONS                              CONSULT CATEGORIES AND SUPPLIERS
                                                                                                                            Gauge capacity & appetite for action.
•   You have a high degree of
    influence over value chain
                                   •   You have limited flexibility
                                       for sourcing raw materials
                                                                             •   Products and related             02        Identify potential supplier partners and
                                                                                 sustainability issues are of               key challenges/opportunities
    e.g. own-label products,                                                     significant customer and
                                   •   There is considerable
    fresh produce                                                                stakeholder concern                        DEVELOP PROPOSED SHORT LIST
                                       opportunity to gain
•   You have existing strong
    local relationship with
                                   •
                                       market share
                                       You have the potential to
                                                                             •   Many supply risks exist in
                                                                                 value chains due to
                                                                                                                  03        Create set of options with pros/cons.
                                                                                                                            Include case study examples and
    suppliers and growers                                                        sourcing location or nature                potential partners to engage
                                       take a leadership role and
•   Raw material quality make          influence value chains                    of raw materials e.g.
                                                                                                                            WORKSHOP TO DISCUSS OPTIONS
    significant contribution to        (without any market                       climate risk, ethical risk,
    overall product quality            power it is harder to
                                       influence practices
                                                                                 etc.                             04        Develop and deliver workshop with
                                                                                                                            technical and commercial colleagues to
•   The product or raw                                                       •   Existing risk management                   identify favoured options
    material is commercially           through value chains)                     tools within the business
                                                                                 or market are immature                     GET SIGN-OFF FOR NEXT STAGE
    important to your business     •   You have already made
•   Production of products or          public commitments on
                                       sourcing or sustainability
                                                                                                                  05        Summarise group recommendations and
                                                                                                                            get sign-off from relevant staff. Include
    raw materials is                                                                                                        proposed next steps
    concentrated in a few              in related value chains
    countries or companies

      Introduction                B u s i n e s sWc hy
                                                    a s elab els?P r o c e s s                   Requirements   Implement              Communication
3.2 Identify priority issues
Using materiality assessment to prioritise what issues to focus on
Having identified the value chains of most interest, you need to understand which issues should be addressed
through the standard and consumer communications. There is no ‘right’ answer for this. You will need to balance
what is known about the importance of issues within the value chain and the expectations of important external
stakeholders, e.g. customers, investors, policymakers and civil society organisations.
A commonly used framework for prioritising which issues to look at is a Materiality Assessment.

  Materiality assessment – from the Global Reporting Initiative
                                                                                                  The Global Reporting Initiative (GRI) is an
                                                                                                  international, independent, non-profit
  A materiality assessment – or determining what is most relevant and important to                standard-setting organization based in
  your business - has become a key part of integrated corporate reporting.                        the Netherlands. It supports businesses,
                                                                                                  governments and other organizations to
  The Global Reporting Initiative provides guidance on how to apply this principle.               understand and communicate their
  Generally, businesses will go through the following five steps to develop a materiality         impacts on critical sustainability issues
  matrix (see Danone example):                                                                    such as climate change, human rights,
                                                                                                  governance and social well-being.
  1.   Issue identification
  2.   Issue prioritisation
  3.   Stakeholder engagement
  4.   Internal validation
  5.   Strategic alignment
                                                                                             See for example the Danone Materiality matrix
  This approach is popular with companies as it ensures the issues that are prioritised      at http://iar2017.danone.com/performance-in-
  balance the competing needs of different stakeholders, are of financial relevance, and     2017/materiality-matrix/
  pursue activities that deliver meaningful environmental and social outcomes.

 Introduction           B u s i n e s sWc hy
                                          a s elab els?P r o c e s s    Requirements        Implement                Communication
3.2 Decide what to communicate
       From quality and origin to environmental performance
       Standards and labels have become one of the primary methods for communicating specific quality and production characteristics to
       consumers. In addition to regulated labels, retailers use make claims about one or more of five key characteristics of produc ts. These
       sorts of claims can be used as part of retail programme to increase the sustainability of the organisation’s value chains.

Nutritional/                   Food quality -                             Environmental                  Social welfare and             Origin & traditional
health benefits                organoleptic                               standards                      equity                         methods
Health concerns continue to    These standards and labels                 These systems encompass        These concern ethical          This type of labels
be a mega trend that is        specify minimum standards                  labels that tell customers     behaviors among value          encompass claims about the
driving product launches. A    of certain food                            about the specific             chain stakeholders             provenance of the product
recent review of health        characteristics e.g. taste,                environmental performance      including: taking into         ingredients and/or
claims found 26% of foods      flavour, appearance.                       of a product or they are       account the rights of          manufacture, and labels
carried at least one                                                      underpinned by a set of        employees and more             about specific quality linked
nutrition, health-related      Example: The French Label                  production criteria that       generally international        to the production origin
ingredient or health claim.    Rouge guarantees eating                    producers adhere to (social    human rights and respects,     (geographical indication), in
The vast majority are text-    quality through best                       and environmental,             providing them with a safe     this case combining with a
based claims, no logos.        production practices. The                  including animal welfare).     and healthy workspace,         specific standard on
                               Serbian Quality Label                      These are developed by         ensuring trading               production practices and
Example: Nordic Keyhole        differentiates high-quality                governments, independent       partnerships based on          organoleptic quality of final
                               food products made from                    bodies or retailers            dialogue, transparency and     product.
                               local raw material with                    themselves.                    respect.
                               specific qualities, such as                                                                              Example: Piedmont Grown;
                               meat.                                      Example.: LEAF Marque,         Example: Fairtrade, SPP        Idaho potatoes
                                                                          Ukraine Green Crane            small-Producers’ symbol        Café de Colombia;
                                                                          ecolabel for foods

          Introduction         B u s i n e s sWc hy
                                                 a s elab els?P r o c e s s               Requirements         Implement              Communication
3.2 Create internal working group
Getting input and buy-in from key business functions

Getting the right project team in                                                                        Alignment with company
place is crucial for these                         Figure: Business functions with                       brand and promotional
                                                   interests in value chain projects                     activities
projects. Once you have
identified your priority supply
chains, and depending on the                                                                                               Technical teams
scope and ambition, you will                                                                                               ensure the correct
need input and buy-in from                                                                                                 implementation of
                                                     Deployment of in-
many different business and                          store publicity                                                       new standards
supplier functions over the                          and
course of the process. The                           communications
figure, right, shows some of the
key stakeholders and their likely
interests. Based on an initial
review it is sensible to set-up a                                                                                              Review of
core working group that is                        Forecasting,                                                                 product and
responsible for delivering the                    planning, ordering                                                           promotional
work. This group can draw on                      and distribution                                                             claims
additional input, as needed.                      to depots

In addition to these internal
functions you will have external
                                                                                                                   Identification and
stakeholder group e.g. suppliers,                                      Sponsorship                                 tendering of
producers, technical experts,                                          and overall                                 suppliers to deliver
consultants, etc.                                                      support for                                 products
                                                                       project

 Introduction           B u s i n e s sWc hy
                                          a s elab els?P r o c e s s                 Requirements   Implement           Communication
3.3 SRVCs– The basic approaches
           There are four basic options open to retail businesses who wish to improve the sustainability of their value chains – each have different
           pros/cons and degrees of complexity and consumer communications opportunities. At any one time, all four approaches may be us ed
           by a business. The four options are outlined below, with examples provided for Marks & Spencer. The pros and cons are outline d in
           more detail on the next page. The focus of this toolkit is the use of labels, claims and brands.

                                         Increasing customer engagement and complexity

Direct supplier codes & policies              Primary production standards               Consumer-facing label or claim               Brand and master brands

These tend to be a set of minimum             Retailers can specify in more detail       The adoption of production standards         Sustainability can be a key aspect of a
standards of business practice that           production practices – including those     can be communicated to consumers in          retailer brand and/or the brand of a
direct suppliers agree to adhere to as        in primary production (e.g. agriculture,   product descriptions (e.g. ‘organic’,        specific product category. In some
part of a supply contract. These range        aquaculture). These standards can          Geographical Indications) or by use of       cases labels or specific claims aren’t
from quality, to requirements on              cover environmental and/or ethical         a label e.g. FairTrade, Marine               used on pack – but rather
traceability and ethical practices.           practices – or focus on quality-related    Stewardship Council). It is important        sustainability, traceability, quality and
Suppliers are responsible for the             aspects such as traditional methods of     for labels and claims to be credible – a     supplier partnership activities are
actions of their suppliers. In some           production. These need not be              topic we explore in Section 6.               communicated as part of wider
instances they can be used to underpin        communicated actively to customers,                                                     marketing efforts.
customer messaging on sourcing.               but can be used as basis for label.
                                                                                         Example: As part of its Forever Fish
Example: Suppliers need to adhere to          Example: M&S uses the LEAF Marque          campaign, M&S developed a logo for           Example: Many of the sustainable
M&S Food Technical Terms of Trade             standard (but not label) in its fresh      its products. See more detail of this in     value chain activities support the
and Global Sourcing Principles if they        produce value chains to deliver against    our case study section.                      wider M&S ‘master brand’ e.g.
supply the company products.                  some of its ‘Plan A’ commitments.                                                       standing for values such as
                                                                                                                                      ‘responsibility’.

              Introduction           B u s i n e s sWc hy
                                                       a s elab els?P r o c e s s        Requirements                     Implement           Communication
3.3 Pros & cons of different approaches
This table sets out some of the advantages and disadvantages of the different approaches set out on the preceeding page. It c an be
used by the project team to consider which options will work best for your business. This toolkit focuses on labels, claims & brands.
Approaches to setting standards in value chains are covered in detail in Section 4.

Mechanism               Direct supplier policies                 Supply chain standards              Labels and claims                    Brand

Partnership             •   Low – policies are cross-            •   Low-to-high – depends on        •   Low-to-high – some labels        •   Low-to-high – supplier
opportunities               business and tend to focus on            standard. Some require close        and claims require no supplier       partnerships can support a
                            minimum requirements                     supplier and producer               or external partnerships e.g.        more authentic brand –
                                                                     collaboration                       organic                              although it’s not essential

Customer                •   Low-to-medium – while these          •   Low-to-medium – these can       •   High – implicit in the           •   High – the goal of brand
engagement                  policies are intended to                 be referred to in customer          development of a claim of            development is increased
opportunities –             protect business reputations,            communications e.g. through         label is the desire to               customer engagement
including on                they do not offer good                   websites and in-store.              engage/inform customers
product quality             opportunities for customer               Sometimes they are ‘hidden’
                            engagement. However, basic               supply chain management
                            supplier data could be used              activities that are used to
                            to underpin transparency                 deliver against corporate
                            communications e.g. maps                 commitments
                            (see Section 6)
Implementation          •   Low – Suppliers agree to             •   Low-to-high – private           •   Medium-to-high – at a            •   High – full integration of
effort (for retailer)       generic terms, who need to               standards require significant       minimum, the use of a claim          value chain sustainability
                            implement within own                     commitment to develop and           on a product will require the        within the brand of an
                            organizations and supply                 manage – whereas public             input of technical teams. If         organization needs cross-
                            chains. The main effort                  standards may be specified          the claim is underpinned with        business planning and will
                            involved is getting sign-off on          and implemented by                  a private standard then this         likely require significant
                            the contents of the codes and            suppliers e.g. organic              adds to the complexity               supplier engagement to
                            policies                                                                                                          ensure credibility

 Introduction                B u s i n e s sWc hy
                                               a s elab els?P r o c e s s                 Requirements                Implement                   Communication
You can also read