Retail Radar

1/7/2022

Raising the bar on sustainability in 2022: Consumer expectations drive retailers to choose more conscious policies and act on them

Columnist David Orgel shares how food and drug retailers should make new commitments to environmental sustainability with efforts that impact not only the environment, but also consumer trust and loyalty.

By David Orgel

“They paved paradise and put up a parking lot.”

The opening verse from the 1970 Joni Mitchell song “Big Yellow Taxi” spotlighted environmental concerns in the same year Earth Day was launched.

Now, more than 50 years later, environmental sustainability is a topic of growing focus — including for retail businesses.

Meijer's parking lot at renovated Michigan store made from recycled plastic bags and film

Recently, in what is arguably a twist on the Joni Mitchell song, the supercenter operator Meijer leveraged a new paving technique for a parking lot at a renovated Michigan store. It installed a new durable surface that likely represents a kind of paradise for the sustainability-minded. In a collaboration with Dow, it added some 12,500 lbs. of post-consumer recycled plastic — all generated from recycled plastic bags and plastic film contributions by customers.

This initiative is just one example of creativity in sustainability efforts by food and drug retailers. The bar is raised for 2022 as consumers advance expectations, retailers make new commitments and activities become more collaborative with new partners.

Consumer Expectations Advance
New research from Acosta, which focuses on CPG brands and retailers, found that consumers are emphasizing sustainability in making purchase decisions. Acosta found 60% of consumers are paying more attention to product packaging and its impact on the environment. Consumer respondents said retailers have a responsibility to the environment and communities in which they serve. Older shoppers (boomers+) are more likely to focus on recycling, while younger shoppers (Gen Z and millennials) are more likely to adapt their buying habits. Moreover, consumers express willingness to pay more for sustainable products.

"The stakes are higher as consumer expectations advance."

Success Gets Measured
Sustainability efforts are increasingly measurable, which enables consumers, investors and others to judge retailer investments. The most proactive companies are often listed highly on key sustainability rankings. As a case in point, retail giant Ahold Delhaize recently maintained its position as a world leader in the food and staples retailing sector in the 2021 Dow Jones Sustainability World Index. The company received a score of 83 out of 100, well above the industry average of 26 points.

Competitors Collaborate
Competition is usually fierce in food and drug retail, but sustainability is a topic in which competition can sometimes take a back seat to collaboration. A major collaborative initiative is spearheaded by The Consortium to Reinvent the Retail Bag, managed by Closed Loop Partners. In 2021, it unveiled a series of retailer pilots that included participation from CVS Health, Target and Walmart. The goal is to drive sustainable alternatives to single-use plastic bags. These efforts will be important to track in the new year. Collaboration will be increasingly needed as retailers strive to advance their efforts.

Retailer Brands Play Key Roles
Sustainability is a growing priority for many types of brands — from CPG to private brand. When H-E-B unveiled a new private brand for household products in November, it emphasized the importance of sustainability in the brand’s proposition. Field & Future by H-E-B features eco-friendly items ranging from sponges and toothpaste to baby wipes and dish detergents. The line is produced with hypoallergenic formulas, biodegradable ingredients and recyclable packaging. H-E-B also relayed plans to work with the organization Keep Texas Recycling to help fund municipal recycling grants to Texas cities and counties.

Sustainability Drives Consumer Loyalty
Sustainability efforts will likely cross new boundaries in 2022 — as in recent years. The bar is being raised as consumers scrutinize efforts more closely. Retailers need to pick and choose which initiatives are most meaningful to their customer bases — and then take action and communicate efforts. The stakes couldn’t be higher as efforts impact not just the environment, but also consumer trust and loyalty.