The topic of sustainability has become a buzzword in almost every company in recent years, adorning annual reports, appearing in newsletters, and incidentally modifying one logo or another – usually to something green. However, with the increasingly fashionable term sustainability comes a vital lesson: not everything is actually green, what annual reports, newsletters, or logos would have us believe.
“Sustainable development means putting environmental considerations on an equal footing with social and economic ones” – this is the definition of the German Council for Sustainable Development. Sustainability is thus much more than cleverly formulated one-dimensional marketing campaigns conveyed to us: it is about equating economic, ecological, and social requirements. And it first starts with being absolutely honest to the customer.
Therefore, honest implementation of the topic of sustainability in a company is not only an energy-sapping challenge, but above all, an enormous opportunity to further expand the company’s success and to gain a competitive edge. But beware, those who focus more on appearing green than on being green quickly run the risk of being punished by the competition and, even worse, by their own customers – the keyword here is greenwashing.
Pressure for change is growing
However, it is not only expectations and demands from the middle of society that drive sustainability, but above all pressure in the form of regulations and laws. A look at the financial sector, for example, shows that banks must disclose sustainability risks in products such as funds. It is to be expected, no, it is to be hoped that this will also extend to other sectors, i.e. also the foodservice industry. It is therefore likely that in the near future companies will have to disclose the sources from which they obtain food and the conditions under which it was produced. This includes not only information related to direct production (such as animal breeding conditions), but also the impact on the environment and the employees involved.
From the greenie-niche to the center of society
Sustainability, especially in terms of ecological action, was a niche topic for idealists and eco-romanticists, but that has changed fundamentally. It’s not just the younger generations such as Millenials, Gen Y or Gen Z that have the topic on their agenda. Across all age groups and social classes, the topic is particularly important; thankfully, it arrived in the mainstream. The market demands coherent, sustainable concepts.
It is interesting to see how personally sustainability is being implemented through organic food, electric mobility, energy-saving houses, or moderate renunciation. There is no question that living and consuming sustainably is also always a question of one’s wallet. Suppose the salary is barely enough for the basic necessities. In that case, the demand for strict sustainability of the individual is pure cynicism. Thomas Krick from Deloitte, a sustainability specialist, also sees the accessibility of all income levels and suitable offers as particularly important.
This is precisely where the food service industry has the potential, because where individuals are struggling to implement a more sustainable lifestyle, the foodservice industry can offer clever concepts that enable customers to jump on the bandwagon and support the company, promoting sustainable strategies and driving the basis for further intensification.
Sustainability pays back
Sustainability properly implemented is a “win-win proposition“; this was already known in the 1990s. Nevertheless, there are often internal hurdles and obstacles in implementation that have to be cleared or overcome. In addition, implementation is not trivial in complex existing systems that have often grown over a long period of time. Let’s take the fast-food industry with its disposable packaging as an example. Although these companies have the enormous market power to push through changes and make them widespread, it is clear how difficult the changeover actually is, despite having suitable systems in place. In the case of McDonald’s, Burger King, and Co, this system change can certainly be seen as a disruptive change – or like moving mountains.
Nevertheless, investing resources to implement suitable strategies is an investment in the future that pays off in several respects. We have to change, on the one hand; climate change, our plastic problem, and advancing digitalization, to name only a few factors, are forcing us to do so. On the other hand, a coherent, honest sustainability strategy strengthens one’s brand and can turn out to be a sales and profit driver. Co-creation is a powerful tool to gain attractiveness and perspective for customers, but also for future employees.
According to the specialists at Deloitte, the issue of sustainability must be anchored at the highest management level in order to take advantage of this ‘payback effect.’ KPIs must be systematically recorded and measured, and the topic must be anchored in the innovation and strategy process.
Top 3 sustainable topics to get going!
In few areas of daily life, are you as close to the customer as in the foodservice industry. Here, people literally vote with their feet whether a dish or service can be delivered to the customer. While some topics and potential starting points are obvious, others are rarely seen in the realm of sustainability but are hugely important in creating a coherent overall strategy. Here are three top issues:
- Food with an identity
Generally, it is true that the use of food with a face, preferably organic and regional, is an important point in implementing a sustainable strategy. Consumer awareness in this regard has changed drastically in recent years. It is time to take advantage of this trend for the foodservice industry.
However, the pitfall here is in the details because in addition to higher costs, questions of availability of goods, consistent quality, and of course, transparency in the supply chain emerge quite quickly. There is also the question of whether guests will support a new, more sustainable strategy. Therefore, a switch to more sustainable food takes place gradually and under close observation of how the new strategy integrates into the company – corresponding KPIs are urgently required.
Experience shows that customers are usually happy to follow this path if the processes are transparent and honest. No customer is so unworldly that he would expect a company to become 100% sustainable from now on. It is much more important to communicate transparently and honestly about what is possible and currently not feasible or what is in the planning stage. Therefore, set effective accents that fit into your overall strategy.
Let’s stay with the example of origin: if you already increasingly use food with a sustainable origin, a purely regional-organic purchase will often be difficult to implement, not only because of the costs but also because of the availability. An effective accent here can be the selective use of hyper-regional foods, e.g., milk and vegetables from the farmer in the immediate vicinity, or even a meat feature, if this can be represented in the cost structure. Higher sales prices can easily be explained with good storytelling (“Hyperregional on the plate!”), a higher goods rate can be booked as a promotional measure.
Let’s turn guests into fellow campaigners and let them have a direct influence on further strategy. Sustainable changes must be wanted and initiated by management. Still, it is the customers who directly create the financial basis – with every single plate, with every order for the out-of-home market. It makes sense to involve customers not only because of the customer life cycle but also to gain comrades-in-arms who are also happy to take the next steps.
- Reduce food and packaging waste
It is an unimaginable figure: more than 30% of global food production is indirectly destined for the dustbin and corresponds to 1.3 billion tons with an estimated total value of 400 billion USD per year.
Even though these figures cover the entire production and processing chain all the way to the consumer, it only gives an idea of how much food could be saved and the potential savings behind it. Initiatives such as the Food Recovery Network or United Against Waste support companies in installing efficient strategies against food waste.
For the Foodservice industry, there is potential not only in reducing preparation waste, leftovers on plates, or passing on unused food but also in the entire supply chain. New, digital solution approaches help reduce complexity, create transparency and bring about greater synchronization in the overall process. There are also interesting approaches, such as The Future of Fresh by Deloitte, designed to help food retailers, food service providers, and food suppliers realize untapped potential in the future.
It’s a similar story with packaging waste, an issue that customers have been sensitive to, and not just since microplastic pollution became known. Reusable systems seem to make the most sense for sustainability but are often accompanied by a high level of organizational effort. The example of McDonald’s’s promise, that from 2025, 100% of customer packaging will come from “renewable, recycled, or certified sources” shed light on a fundamental issue: even packaging that is manufactured in a more environmentally friendly way and consists of degradable products is at the end of the day still a disposable product – and therefore waste.
Therefore, the goal must be to have a sensible mix of circular systems and disposable packaging with as little ecological impact as possible. The vast number of startups currently working on this subject should not only give us strong voices but also inspire us to help shape it actively.
Personnel as a sustainability issue? Does it fit? It couldn’t be in better hands anywhere than in this area! Personnel topics belong in the sustainability strategy just as much as in the corporate culture because both areas are essential for the company. Company culture, personnel training, reducing fluctuation, and creating perspectives and development opportunities are broad areas. Equally important is how you take care of your staff and how you foster a healthy working environment.
Therefore, here in a nutshell: if “always people first” is a fundamental culture and sustainability concept in the business for you, then you have already realized that without staff, a sustainable corporate strategy is entirely impossible. Period.
Power to the masses
Sustainable food handling? Old hat. Saving packaging material and relying on new ideas? Been around for a while. Adding staff on the topic of sustainability? Please wake me up when we’re done… That’s right, the topic of sustainability seems modern and contemporary, but it’s not. It’s already so old that it really should appear here in black and white.
Sustainable behavior has defined us for centuries, often born out of sheer necessity. Let’s take food shortages and the resulting famines as an example: the problem was existential on an individual level, rather less so for the community. Today the signs have turned; sustainability is still existential, but today on a global level. Let’s tell it like it is: if we don’t act quickly – preferably yesterday – we’re screwed.
For the foodservice industry, this often presents underestimated opportunities:
- Expand brand awareness and brand purpose.
Sustainability in the company pays directly into the so-called brand purpose, i.e., the company’s purpose. What does the company stand for, what are its social and environmental goals? Your company needs to stand out for its sustainable activities and strategies and take a public stand: “if you (customer) support us, we can achieve all this…” Only in this way can the customer identify directly with the company or the brand. It is important to think and act green; otherwise, “green thinking” quickly turns into dangerous greenwashing.
- Customer engagement from Millennials to Gen Z
Community is everything! Even though sustainability cuts across society, there is a need to pay special attention to Millennials and Generation Z – the digital natives. It’s a truism that today’s young generation will become tomorrow’s regular customers. In the perception of these customer groups, individual companies play a subordinate role, but rather what can be achieved cooperatively. The company takes a stand, is a pioneer, and is not afraid to quickly adapt its strategy. It is also not afraid to be the first to take risks in order to play and shape ahead.
- Higher profits, more stable returns & happy investors.
At the end of the day, it’s all about budgets, profits, and returns, and that’s a good thing. After all, few things drive a business as much as the prospect of steady, organic growth and good profits. It is precisely new, sustainable business models and adapted strategies that can prove to be profit and return drivers. More so, strengthening the brand, innovating the product portfolio, or reducing attrition also drive success.
- From slowpoke to game changer
Wait and jump on the bandwagon when the time is (apparently) ripe, or actively participate in shaping it? Both approaches clearly have their advantages, concentrating more on low risk or the desire to be upfront and first. Customers today value companies that want to make a difference, that dare and don’t wait. There is much to suggest that this will increase in the future – and that is a good thing.
The time has come!
There are practically no arguments that justify turning a blind eye to the issue of sustainability – on the contrary. Sustainability in ecology, economy, and the social sphere will not be the topics of the future; they already are. As always, implementation is not easy, and it costs resources, time, and money. But we are talking about an investment in something that is not just nice-to-have but essential for survival. It is not only the time for doers and sustainable visionaries but also for those who make the big possible out of many small changes.
Waiting and watching the situation unfold is a natural and very human approach. Still, you have to be careful that said train is not already moving too fast to jump on, but at best, you can only run after it.
The Foodservice industry has always been a driver for the new and innovative, for exciting concepts and customer focus. It has the best prerequisites for really making a difference.