UK supermarket Sainsbury’s new plan is welcome, yet on close inspection its consumption-led business model is little altered

The year-end is conference season. If you sell to Sainsbury’s, that is. The past few months have seen hundreds of the supermarket’s suppliers shuffling into meeting rooms for familiar presentations about quality and price points, category management and promotions.

There is a new line in the script this time – “20 by 20”. No, it’s not a new ad campaign (well, not primarily). Nor is it some jazzy consumer discount scheme (not in the traditional, end-of-aisle sense, at least). It’s Sainsbury’s all-singing, all-dancing sustainability plan: 20 “ambitious goals” by 2020.

The UK’s third largest supermarket is pledging to promote nutritious eating, increase sourcing from certified producers, double British food purchases, and much else besides.

The news didn’t come as a complete surprise to suppliers, says Jack Cunningham, climate change and environment manager at Sainsbury’s. For starters, the supermarket spent a lengthy period eliciting opinions from NGOs (both friendly and not-so-friendly), employees, consumers and, indeed, suppliers.

More fundamentally, sustainability is not a completely novel concept for the retailer. Sainsbury’s has been pushing the agenda on a number of fronts for the past six years or so. It is the largest Fairtrade retailer in the UK, for instance. Its promotion of sustainable fish, animal welfare and forest conservation also cause it to stand out in the UK food market.

“We’ve made significant progress on sustainability in recent years, but we’ve not brought all our activities to one table before now,” says Cunningham in reference to 20 by 20.

Holistic sustainability plans are somewhat in vogue. Wal-Mart, Unilever and Marks & Spencer are among those to have recently come out with ambitious, long-term strategies. So, welcome though Sainsbury’s announcement is, is it just another plan?

Not just another plan

Yes and no. Yes, in that 20 by 20 – like other plans – lays out targets in a range of sustainability issues. It also follows established good practice in promising transparency on progress, as well as pledging full accountability (that is to say, to consumers and from suppliers).   

There are several important reasons why this is more than just another plan, however. First, rationale. This is no copycat effort, Cunningham insists. The plan reflects an internal desire within Sainsbury’s to move from a “tactical” approach to one that explicitly links sustainability strategy to the company’s commercial goals.

The second difference is scope. While the 20 by 20 list reflects some generic sustainability concerns (such as waste and carbon emissions), a good number are material to Sainsbury’s itself. Reducing the average alcohol content of its own brand wines and beers is just one example among several.

The true evidence that Sainsbury’s isn’t just following the crowd is scale. According to Cunningham, the supermarket intends to invest up to £1bn between now and 2020 to achieve the plan’s targets. That’s serious cash.

The potential impact could be substantial too. Think of a UK dinner table. More than 18 million people shop at Sainsbury’s each week, and come 2020, all of them should be eating less salt, less fat and less sugar. The result? A healthier nation, unequivocally. 

The initial feedback from commentators has generally been favourable. Dax Lovegrove, head of business and industry at conservation non-profit group WWF, credits the plan for “breaking from incrementalism” – gradual, step-by-slow-step improvements.

He identifies welcome additions over rival plans. Take water. Sainsbury’s is going beyond the language of water efficiency to that of collaborative “stewardship”. That, Lovegrove says, is “quite progressive”.

Likewise, on carbon emissions. Cutting its own absolute emissions by 30% is challenging, but reflective of general best practice. Cutting its own-brand suppliers’ emissions by 50% on the other hand, marks a genuine gear-shift in the debate.

Dan Crossley, principal sustainability adviser at environmental non-profit group Forum for the Future, is broadly impressed, too. The targets on packaging and sustainable sourcing are both “memorable” and “stretching”, he says.

Decoupling

Praise is not universal, however. On Forum’s part, Crossley would like to see “bigger headline targets” to help create and shape consumer demand in a more sustainable direction.    

“Some [supermarkets] are now talking about leading consumers … but retailers still don’t want to be seen to be dictating what consumers are buying,” he observes. 

The commitments around consumers are a concern for Lovegrove, too. A more explicit commitment to “decouple” business growth from overall environmental impact would have been welcome, he says. Unilever’s chief executive, Paul Polson, promised as much; why not Sainsbury’s too?

The retailer is not deaf to either argument. Regarding consumer behaviour, it’s going some way to deliver sustainability “by stealth”, as Cunningham puts it. All the salmon on the company’s shelves is certified under Marine Steward Council standards, for instance.

Making sustainability the default option for all products is a step further than Sainsbury’s is currently prepared to go, however. “As a retailer, we can do a certain amount for customers … but, before that, it requires a sea change in how consumers understand the issue [of sustainability]”, Cunningham says.

He’s unconvinced about decoupling. Business growth and environmental sustainability should be “absolutely aligned and integrated”, not removed from one another as decoupling implies, he maintains.

His concern goes beyond semantics. Decoupling works for some areas, such as carbon emissions and energy use. Its feasibility is less clear for others. Take food miles: reducing foreign food exports on UK shelves is all very well, but what about the impacts on African farmers?  

Cross-sector cooperation?

Behind these issues is a more fundamental question. It centres on the dynamics of the supermarket industry itself. Two major factors are impeding progress.

The first is cooperation. All major corporations (Sainsbury’s included) concede that the world’s biggest challenges need joined-up approaches. Sainsbury’s works with a host of partners: everyone from Comic Relief and the Forest Stewardship Council to the Dairy Development Group and Job Centre Plus.

Yet, vital names are missing from the list: its supermarket competitors. Other than some minimal cooperation on product distribution and fleet resources, industry partnership is woefully absent. Lack of willing is partly to blame, but the stringent competition law that governs UK supermarkets does not help.   

Secondly and more importantly, Sainsbury’s isn’t about to stop selling more stuff. Impressive though its new targets are, they are unequivocally premised on consumption-led growth.

Developing an alternative business model is no easy task for a food retailer. Unlike many non-food sectors, supermarkets struggle to shift from flogging products (eco-heavy) to selling services (eco-light).

Forum’s Crossley argues that today’s growth models won’t last forever. He says: “We need to move away from growth being a fundamental obsession and we need to reduce our absolute impacts.”

Does Sainsbury’s 20 by 20 Plan do that? Only partly. If successful, its bold targets promise to reduce the company’s footprint in a range of key areas. That is all to the good.

Yet, the plan does little to challenge the company’s underlying business model. Sainsbury’s vision is ultimately based on persuading us to consume more and more. The picture for 2020 looks brighter, but with a landscape that remains much the same.

Sainsbury’s fast facts

·         Headquarters: London, UK

·         Ranking: Third largest UK supermarket, behind Tesco and Asda

·         Latest full-year sales: £22.9bn

·         Operating profit: £738m

·         Employees: about 150,000

·         Stores: 934

·         Customers: 18.5 million per week

·         Products sold: about 30,000

Sainsbury’s 20 by 20 Sustainability Plan

Sainsbury’s commits to the following 20 goals by 2020:

Best for food and health

1) Reduce salt, saturated fat, fat and sugar in own-brand products.

2) Increase sales of lighter alcohol wine and reduce the average alcohol content of own-brand wine and beer.

Sourcing with integrity

3) Source all key raw materials and commodities from certifiable sources.

4) Ensure own-brand products won’t contribute to global deforestation.  

5) All fish sold from certified sources.

6) Sales of fairly traded products to hit £1bn.  

7) Double British food sold.  

8) All meat, poultry, eggs, game and dairy products to meet higher welfare standards.  

9) Suppliers to meet or exceed Sainsbury’s social and environmental standards.

Respect for environment:

10) Ensure supply chain approach is sustainable in areas of water vulnerability.

11) Put all waste to positive use.

12) Reduce own packaging by a half (compared with 2005).

13) Reduce carbon emissions by 30% absolute and 65% relative (compared with 2005).

14) Help brand suppliers reduce carbon emissions across all own brand products by 50% relative.

Positive difference to the community

15) Encourage more than 20 million children to enjoy physical activity.

16) Donate more than £400m to charitable causes.

A great place to work

17) Create 50,000 new UK job opportunities and provide external training for at least half of all employees.

18) Have 20,000 employees with 20 years of service.

19) Increase employee shareholders by 25%.

20) Provide 30,000 jobs for disadvantaged individuals.

 

 



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