Communicating Sustainability and Social Purpose in the Food and Beverage Industry

By Cory Ziskind and Tim Streeb

During the past decade, corporate sustainability and social purpose have evolved from a “nice to have” to business imperatives for companies of all sizes and across all industries. In the food and beverage industry, brands without an authentic social purpose and substantive commitments to environmental sustainability are likely to do so at their peril as they will fail to appeal to the tastes and values of Gen X, Y and Z. Combined, these cohorts have the dominant purchasing power and their purchasing decisions have a long-tail effect that will influence future generations.

By virtue of the fact that people are paying increasingly close attention to what they put in their bodies, environmental and social issues are critically important in the food and beverage industry as consumers of all ages and demographics are increasingly voting with their feet and their wallets.

The companies and brands with a clear purpose backed by real substance are winning hearts and minds, long-term brand loyalty, and trust with all key stakeholders: employees, consumers, business partners, investors, governments, NGOs and the communities in which they operate.

The Enabling the Good Life Report from Sustainable Brands and Harris Poll found that Americans are redefining “The Good Life” and are looking to brands to take the lead in showing them how they can make a more fulfilling life. According to the landmark research, 71 percent of Americans say their view of The Good Life differs from their parents; 66 percent say “living a healthy, balanced life” is important to them; 76 percent say The Good Life requires making a difference for others; and 80 percent are loyal to brands that help them live The Good Life. This sentiment is here to stay for the long-term.

Further, the world’s largest retailers, such as Walmart, are mandating compliance with stringent sustainability and social responsibility metrics to secure and keep shelf space. Walmart’s Standards for Suppliers are its fundamental expectations of its suppliers related to social responsibility, and its Global Compliance Guidance Tool helps supplier brands comply with its expectations for responsible sourcing, food safety, health and wellness, product safety, environmental health & safety, global supply chain security and factory capability and capacity audits.

Walmart’s Sustainability Index gathers and analyzes information across a product’s life cycle — from sourcing, manufacturing and transporting, to selling, customer usage and end of use. Walmart uses the data from the surveys to identify key social and environmental hot spots and to set an agenda to drive continuous improvement with its suppliers. In 2017, Walmart reached its goal set in 2012 of buying 70 percent of its goods from suppliers that participate in the sustainability index. Simply put, social and environmental factors are driving retail purchasing decisions.

The war for talent is driving substantive change as well. Today’s multigenerational workforce increasingly wants to work for companies that align with their values in not just words, but actions. According to The Deloitte Global Millennial Survey 2019, millennials and Gen Zs want all of the talk business gives to purpose to become meaningful action, and for business leaders to serve as agents for positive change. Earlier Deloitte millennial surveys found that “companies and senior management teams that are most aligned with millennials in terms of purpose, culture and professional development are likely to attract and retain the best millennial talent and, in turn, potentially achieve better financial performance.”

Sustainability and Social Purpose: The New Standard for Investing

The pressure for brands to have a purpose isn’t just from consumers, retailers and employees/talent; it’s coming from the world’s largest institutional investors. The emerging topic of Environmental, Social and Governance (ESG) made recent headlines and reverberated throughout boardrooms with the release of BlackRock’s annual letter to clients and CEOs, in which the world’s largest asset manager announced that sustainability is its new standard for investing.

BlackRock sent a clear signal. Regardless of one’s view on climate change, environmental and social performance are inextricably linked with long-term business performance — not at odds with each other. The message from BlackRock: We’re not going to risk our fiduciary commitment to our clients with investments in companies that don’t properly manage both the business risks and opportunities associated with environmental and social issues.

Increasingly, clients recognize that a confluence of factors are driving a renewed sustainability and social purpose mandate that is critical to their long-term business success. And they know that appropriately communicating their strategic approach, execution and successful implementation of sustainability and social purpose is paramount for long-term credibility and building reputational capital.

Following are our key recommendations for effectively communicating sustainability and social purpose in the food and beverage industry:

Embed into brand DNA. Embed environmental sustainability and social purpose into the DNA of the company to strategically align with the business strategy and create authentic food and beverage brands that resonate with all stakeholders. Sustainability and social purpose must permeate all interactions between the brand and stakeholders — not just customers, but partners, NGOs, the local communities in which you operate and vendors and partners throughout your supply chain.

Engage and empower the team. Employees are your brand’s front-line ambassadors, and as such, employee engagement is critical for successfully implementing sustainability and social purpose into the company’s brand DNA and products. Invest time, energy and resources into regular engagement and communications with employees and empower them to make meaningful contributions.

Prioritize and focus. Understand which ESG factors are material to your specific business and product offerings. Focus on those issues, especially when communicating ESG strategies and outcomes to your investors and board. ESG risk factors can have significant and direct impacts on value creation, which means they should be top of mind with these groups. Integrate board and management teams into the process.

Set goals and communicate progress. Set realistic long-term quantifiable goals and communicate progress towards those goals with all stakeholders. Develop an annual corporate sustainability and social impact report to communicate success against ESG goals. Show how ESG performance aligns with financial performance and the company’s long-term vision and mission. Create effective shareholder engagement plans to communicate your ESG approach. Integrate communications across investor relations, public relations, and digital/social media to maximize communications opportunities and minimize communications risk.

Tell your story, but never greenwash. Sustainability communications is about story telling based on facts, not hype. ­Greenwashing may feel good in the short term, but it will lead to a loss of long-term credibility that likely cannot be recaptured, as well as punitive media coverage that will tarnish the company’s reputation. Strategically pursue select media opportunities to amplify your sustainability and social purpose message, but always be prepared to support claims with facts and figures, verified by credible third parties.

It’s an exciting time for the corporate responsibility and sustainability movement. Without a purpose that helps people lead a better life, it’s simply impossible for a food or beverage brand to establish or keep its relevance over the long term. At the same time, the sustainability mandate creates tremendous opportunities for food and beverage brands of all sizes to innovate with a purpose and effectively communicate their purpose to create lifetime and multigenerational brand affinity. To learn more about effectively communicating your company’s sustainability and social purpose strategy, contact us.

This blog post first appeared on the O’Dwyer’s blog.