Engaging in the carbon debate

05 October, 2007
No major bakery brand has, as yet, grasped the nettle of carbon labelling. Yet the first one to put their head above the parapet may benefit substantially from doing so - or at least, that's the theory. Andrew Williams reports
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If you stroll around a farm for long enough, you'll inevitably find some unpleasantness attached to your shoe. This was the case when Cadbury measured its corporate carbon footprint and found 67% of its emissions came from milk - even though the milk was produced locally. As Alex Cole, Cadbury's corporate responsibility director, tellingly says: "We are trying to reduce that figure. The question mark is not over the cows farting but the cows burping."
Some manufacturers clearly have a tougher task than others to reduce their carbon footprints and the answer, my friend, may not simply be blowing in the wind. But bakers are already actively reducing their carbon impact, says Dr Wayne Martindale of Sheffield Hallam University, who has been working with bakers to address the issue (see pg 23)."Bakers potentially see a regulatory framework on the horizon and they certainly see the need to engage with their customers on waste, packaging, CO2 and local food," he says. "It's not a huge leap for them to think of their products in terms of their environmental impact. It doesn't necessarily involve too complex an analysis. It's about understanding what ingredients go into what products and how the supply chain works; the people who understand that best are the bakers."Even so, no major bakery brand has yet grasped the nettle of carbon labelling on its products. Tom Heppleston, a marketing expert for Principles Agency, which has marketed the green credentials of brands such as Innocent Smoothies and organic chocolate Green & Black's, says that although carbon footprints may not hold much sway with the major bakery brands' core consumers, whichever brand jumps first has the most to gain in the long term.He says: "The public only recognises the first past the post. One of the major bakery brands - be it Hovis, Warburtons or Kingsmill - needs to take a deep breath and put their head above the rest and chart a clear path forward on the issue." Brands need to be targeting the 16-25 age group now - or even kids as young as six - who will mature as consumers along with the issues over the next decade, he stresses.This view was echoed by The Carbon Trust's general manager of carbon footprinting, Euan Murray, who told British Baker he was keen to see a major bakery brand picking up the carbon mantle, if only to popularise the cause. "Bread has one of the highest household penetrations of any food product. We need to break the mindset in consumers that ethical labelling is associated with more expensive products," he says.confusion set to clearWhat has been holding back many bakery manufacturers has been the fug of confusion surrounding carbon footprinting. The air is set to clear with the development of a new industry standard for measuring carbon footprints, which should end the dust-ups over competing carbon measurement methodologies. The Defra-backed BSI standard will be based on The Carbon Trust's methodology used for its ongoing carbon labelling pilot scheme. Given the political urgency surrounding the issue, the process is being fast-tracked and the standard will become a 'publicly available specification' in summer 2008.The BSI standard will not have an accompanying labelling scheme, although The Carbon Trust's existing pilot scheme has a labelling element that has been adopted by the likes of Walkers crisps; this entails calculating the carbon footprint of a bag of crisps - in this case 75g - and printing that on the packaging alongside a commitment to reduce that figure.So what exactly is the benefit to the bakery manufacturer in making this pledge? Jonathan Banks, business insight director for AC Nielsen, told a labelling conference held by The Grocer last week that it's "too early to tell" if carbon labelling initiatives on Walkers Crisps and Innocent Smoothies have had any tangible impact on sales. And carbon labels will certainly not command premium prices on their own. "The benefit to the manufacturer is in reducing costs, not in increasing your price," he says. "Within two years, carbon labelling will not be a differentiator - it'll just be table stakes to stay in the game."under pressureBut pressure is growing for the retailers to reduce footprints now, even before the BSI standard is introduced next year. One supplier told British Baker that supermarkets have already begun asking, "What are you doing to reduce your carbon footprint?" He said some suppliers are feeling unprepared to answer this question and fear major retailers might take their business to firms that tick the carbon reduction box.While the UK's multiples are leading the world by responding to the carbon issue with gusto - Marks & Spencer went large with its lauded Plan A corporate green agenda - can suppliers keep up with the new demands expected of them? Mike Barry, M&S' architect of Plan A, told British Baker that there was no undue pressure on suppliers to reduce carbon footprints."I don't think you could put a timescale on the point where retailers would harshly judge the supply chain on its ability to deal with climate change," he says. "There are already high expectations on the likes of animal welfare, meat and labour standards, pesticides and food safety - carbon footprint is just another of those issues that's emerging. So we'd urge suppliers to get on the front foot and prepare for it rather than wait for the issue to manage you."Carbon labels may one day emerge as a tangible benefit to consumers, he believes. "Now, consumers are saying they want sustainability," he says. "They're not quite sure how they want it, but they want us to be thinking it through on their behalf. We're saying to our suppliers, 'Come on guys, we need to work on this together'."Meanwhile, Tesco's business development director Barney Burgess told delegates at the conference that he could envisage carbon labelling becoming as commonplace as nutrition labelling - provided a workable standard and a consumer-friendly format emerged: "We need to make sure that we don't foist upon our supply base a process of measuring product which may or may not be proven to be accurate, that would take up resources and costs to implement."Tesco recently plunged £25 million into a new Sustainable Consumption Institute at Manchester University to investigate tackling climate change through green consumption and CEO Sir Terry Leahy pledged to introduced some form of CO2 labelling across all its products."If we can find a way to put labels on products that help customers make choices, in a way which they understand and is appropriate for their purchasing decisions, in terms of the genuine environmental impact of those products, then we'll be supportive of that. Customers will quickly let us know if that's information they need," says Burgess.Meanwhile, the early signs look good for The Carbon Trust's labelling pilot. A third of consumers polled by Harris Interactive in September were already aware of the label, which is only a few months old. "I think this will change pretty dramatically in the future," says Dr George Terhanian, president of Harris. But will shoppers really be swayed enough to change their consumption habits? Retailers and bakery manufacturers have a battle on their hands: only 1% of consumers trust business and corporations when it comes to information about global warming and climate change, according to AC Nielsen research (April 2007). And what if the vocal green lobby are drowning out the majority of consumers who don't give two hoots? While people claim to be influenced by what they read in the media, the glut of green coverage in recent times has not led to a significant rise in environmentally-aware consumers in the last 10 years. "For retailers [green] has provided a great PR weapon. But I get the feeling that we're preaching to the converted," says Mintel's director of research, Richard Parks, who warns of a potential consumer backlash. "Progress will be very slow."label fatigueConsumers are already showing 'label fatigue', with 60% saying there's 'too much to think about' when making a product purchase - up from 49% five years ago. Sally Uren from Forum of the Future, a charity that advises businesses on sustainability, is calling for "confident brands" to help guide the baffled population through the green maze. "We can't expect to give consumers more and more information and expect them to one day wake up and know all about carbon labelling and start making purchasing decisions," she says.While the 'arrow down' on the Carbon Trust label is already well understood, recognition of the number of grams on a pack is not, because not enough products carry it for consumers to compare. "It certainly hasn't stopped any purchasing decisions," she says. "But labels on their own are not going to take the agenda to the consumer. It's important that there is a process of awareness-raising."If you, as a business, need to provide a context for communicating this message, how about this one? Ask people: "If a car emitted 250g CO2 per kilometre - a distance that wouldn't even get you to an out-of-town food retailer - and 1kg of flapjack equalled roughly 120g CO2, which would you opt for?" Bets are off that the 'flapjack binge diet' would win out every time. nl The new carbon footprint standard is under consultation. Visit [http://www.bsi-global.com/pas2050]----=== Is 'carbon footprinting' a red herring? ===Some say the widely-publicised scheme to print labels on consumer product packaging indicating source-to-store carbon content is not only flawed, but also has the potential to become a source of conflict.Fraser Ironside, global business development director of supply chain specialist Barloworld Optimus, whose clients include RHM, Tesco and Sainsbury's, says The Carbon Trust's approach to carbon labelling "dumbs down" the complexities of the supply chain process, which in turn will only lead to inaccuracy and misleading data."Supply chains are not static," he says. "If they're to be flexible, responsive and effective, they will vary from day to day. As yet, no rules or boundaries exist on what companies should be measuring or where their calculation starting-point should be."If it's to have any meaning at all, sourcing and shipping both need to be measured to the minutest degree, and factors such as seasonality, demand, plant efficiencies, warehousing, supply routes and a whole mixed bag of ever-changing circumstances - even down to whether or not a product is eventually sold in, say, Scotland or Kent - will inevitably have an impact on its eventual footprint reading," he adds.According to Ironside, a 'far more workable solution' would be to re-think the process to list 'average' carbon emissions rather than 'actual' - or better still, he says, to print emission details based at company level rather than product level.Dr Wayne Martindale, from the Food Innovation Project at Sheffield Hallam University, works with bakers on the carbon issue and says he is moving away from the 'footprint' idea to focus instead on 'resource efficiency'."What we've tried to do is tease out the important facts that bakers can relate to their own business planning skills. There's a lot of detail out there and you have to decide how much of it you're going to use, which means throwing away some detail but keeping the whole thing workable in a factory situation."



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