Research by Omnicom PR Group offers insight into sustainable business operations and the role of communication Why is one food producer becoming more sustainable faster than the other and who,…
Although sustainability is increasingly higher on the agenda of all food producers in the Netherlands, roundtable discussions with executives show that in reality sustainability is still often seen as a project, rather than a structural change in the process. During these in-depth discussions, the various table members from leading food companies frankly confirmed that large producers are often focused on margins and profit, and therefore focus more on short-term goals.
For many companies, making their operations structurally sustainable still appears to be a major challenge. That is why many producers stick to tangible, safe, smaller projects in the field of sustainability, such as recyclable packaging. The researching food consultants of Omnicom PR Group (OPRG) understand the business risks that such long-term structural changes entail. At the same time, all participating managers agreed that structural sustainability is necessary to stay in business. For this reason, OPRG lists a number of challenges that food producers in our country face with regard to sustainability, and also provides a number of tips for using communication as the driving force to speed up sustainability in these organisations.
What a journey
Increasing the sustainability of the food production process is a comprehensive process because of the many chain dependencies, investments, uncertainties and the final price and competition relationships. Communication on sustainability did not appear to go without saying during the round tables. There are doubts: is our company contributing enough? If we open up, won’t that make us vulnerable? Aren’t other companies already doing much more? Isn’t it seen as “greenwashing”? Can we actually make such claims? Very valid doubts. Sustainability communication is certainly complex and requires a planned approach.
However, sustainability initiatives do not have to be finished in order to communicate about them; it’s a journey, a journey in which all your stakeholders are eager to follow you. Start internally, show that the company has a clear vision of sustainability, what the course is and what the intermediate steps are and what principled choices are or are not being made. Explain that you cannot do it all by yourself; appoint collaborations within the chain. An earlier OPRG study showed that the food companies that communicate very clearly on all these steps – such as Hak and FrieslandCampina – are seen as very sustainable.
To see sustainability as a lasting process change that cuts across all departments and food producing activities and silos, clear structures and priority from the top are needed. Concretisation is the key word here, by translating vision and policy from top to bottom into concrete action for all employees. According to successful sustainability managers, it does not help to always use the very general term ‘sustainability’. It is better to translate the sustainability vision into concrete and attractive action points. So not: “In 2025, we must produce 100 per cent sustainably and in a fully circular manner” but: “We will stop using plastic immediately and gradually reduce waste during production, because we want to be ahead of the competition”. Don’t make the internal sustainability ambition too complex. What are our conscious choices and our terms, instead of trying to capture all possible aspects of sustainability. Ensure that employees can easily and with commitment explain to others at a party what their company and themselves are doing.
Another key to success, according to roundtable participants, is to invest sustainability objectives in personal KPIs (performance indicators) and to link bonuses to these. This is the internal concreteness that shows that the company is serious about sustainability.
Barriers are in your head
The quantitative research revealed perceived barriers for sustainability that the OPRG-consultants found somewhat weak, even fallacies for not increasing sustainability. During the in-depth interviews it indeed appeared that the previously mentioned ‘no money, no facts available, no time’ needs to be nuanced. Affordability and budget priorities can take away a major first barrier through a more sustainable scope in financial management. So, instead of looking for a fund for a sustainability project, we need to look at how our more sustainable corporate vision is guiding our finances.
Measurability is a perceived barrier, but none of the participants considers it a permanent barrier. There are proven techniques and companies that can help with measurement throughout the supply chain. The tip that is often heard is: ‘Yes, it is quite complex, but just start and learn’. The ‘no time’ barrier disappears as soon as sustainability is included in your KPIs. The boss gives you time for it, even demands that you invest time in it. Dutch food companies operating on a global scale often have difficulty making choices in terms of focus, because sustainable urgencies are experienced differently all over the world. Tip from OPRG: choose and explain why this approach suits you. Markets understand that companies have to make choices. And 2. Uncertainty about the future hinders major transitions and investments. Monitoring, forecasting, facts and data, and also regulatory clarity help. Our advice: do some self-regulation as a food sector. That way, you bring clarity for the future and create public support for it, instead of waiting to see what politicians will pull out of the hat.
Omnicom PR Group’s consultants say of the barriers, that experienced sustainability leaders teach others that they can all be overcome. Where there is a will, there is a way.
Financiers and/or shareholders play a bigger role in the practice of sustainability than previous quantitative research showed. Their direction is less visible, but during the in-depth interviews it became clear that Dutch food producers are often directed towards margins and profits and short-term goals. Shareholders should receive different business information from the CFO and CEO: not just the familiar figures, but also context and figures about “sustainable must do’s to stay in business” and about the business impact of corporate social responsibility. CFO and CEO must also work on a new sense of standards regarding ROI; the payback period of sustainability investments must increase, these are multi-year investments to stay in business. Communication advisors should work together with the cfo and ceo to guide this financial information change; these are changes that require other arguments and other benchmarks in order to bring financiers and/or shareholders along in a rapidly changing sector and thus changing business thinking. Because sustainability is not a cost item, but a necessity; from short-term margins to long-term ROIs. Sustainability also makes food more expensive. This ‘elephant in the room’ needs to be spoken out and explained. Food has often become too cheap due to the focus on mere efficiency and sustainability also requires a reappraisal.
This is where the political and food sectors can jointly set the agenda and explain their role: do we want to assign a different value to our food, namely more sustainable with more consideration for all kinds of social aspects? Then that food product will literally have more value, in terms of feeling and price. Here, the great social sensitivity was expressed during the round tables, that the price increase ends up at the wrong places in the chain.
Sustainability is pretty top of mind among CEOs these days, but they often don’t communicate it enough. They do not ‘live it’. However, changes in major policy themes such as sustainability start with the CEO himself. He or she initiates and monitors progress. With a feasible and contagious vision, in clear language and steps. It is also advisable for the CEO to frame the sustainability theme as a business-critical topic; no longer separate projects, but a structural part of all business processes with performance indicators (KPIs) and bonuses. In this way, the CEO gives it urgency and people will run faster for it.
It is also important for CEOs to include middle management in the organisation’s sustainability journey. On a formal and informal basis, the leader checks the policy. Communication advisors can ensure that the CEO does not display any ‘one-man-show’ behaviour. For both internal and external credibility and support, it is essential that the CEO, together with middle management, radiates the sustainability ambitions. The communications professional can coach the CEO on exemplary behaviour, both in terms of content (factual) and tone (positive and realistic), as well as personally (what personal connection does he/she make with being more sustainable). This last point gives the process of becoming more sustainable an extra positive turn. The leader is looked at internally and externally and one wants to feel that he/she is serious and honest about the set goals and ambitions. It is important to include this specific, personal connection with the ongoing change process in all communications. In the leadership communication, the CEO must sketch a relevant image of the future of his own organisation in a more sustainable society, and the concrete way in which this will be achieved step by step. Everyone has a role to play in this: every employee, the financiers/shareholders and the consumer with the purchasing choices he/she makes. And really, sustainability only happens when our food companies stop working on separate projects and take the way forward in structures and processes; sustainable in the sense of lasting.
How communication can accelerate sustainability among food producers:
- Dare to communicate! As a company, don’t be held back because someone else may be doing it even better. Every step is one in the right direction, where visibility and cooperation are appreciated.
- Let the CEO inspire and actually prioritise. Set a good example, make it concrete with your management team through kpi’s and redesign processes with sustainability as a guiding principle.
- Financiers/shareholders should receive different information. Other ROIs, other benchmarks and CSR criteria must be structurally included in reports and management information if food companies are to survive.
- As a sector, name the ‘elephant in the room’. Yes, our food may become more expensive, because we were producing too cheaply, often neglecting the planet. Sustainability requires a revaluation of our food; this must be communicated.
- Help translate the general term ‘sustainability’ into very concrete choices. By recognisably expressing and propagating frameworks, long-term vision and current business choices, you create support among both internal and external stakeholders.