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This post is the second in our series about how grocers are dealing with the legacy of COVID-19 in a post-pandemic market. In this post, we look at the issue of sustainability, and how consumers and business remain committed to their goals.
In our first post, we talked about the USDA's Build Back Better initiative to fix the supply chain broken by COVID-19. One of the objectives of that program is a plan to address climate change. While global warming may at first appear incidental to the coronavirus pandemic, the Biden administration recognized that it is linked to the pandemic and overall is potentially more damaging to the supply chain in the long term.
Consumers tend to agree. According to Deloitte, "making environmentally friendly choices is likely to prevail even when shopping behaviors return to normal, as the lockdown and the pandemic have given many consumers a chance to pause and rethink their own consumption patterns.”
Consumers and grocers both have realized that sustainability goals are important not only to help end the pandemic but to begin healing the planet and forestalling a troublesome future.
The public demand for sustainable products and operations has not diminished during the pandemic. As reported in Trivium Packaging’s 2021 Global Buying Green Report, 67% of consumers are concerned with the environment and want products in recyclable packaging. And according to a report from the National Retail Federation, 60% of consumers say they’re willing to change their shopping habits to reduce environmental impact.
So, what do consumers want? Polls have revealed the following indicators, among others:
Environmentally safe and biodegradable packaging materials
Products sized and batched for smaller households
Guidance on packaging for freezing, storing, and thawing fresh foods and leftovers
Fair-wage farming, processing, and production policies
You might think that the public would suspend their demand for sustainable products and services during an emergency. But apparently, having spent so much time at home in the past 16 months, consumers cannot help but notice how much garbage their households produce. This self-conscious awareness of waste has only heightened their desire to recycle.
At the same time, many consumers have witnessed or experienced food insecurity, which the pandemic has made more common, urgent, and visible.
Disposing of food while community food banks struggle to deal with unprecedented demand is hard to square for most consumers.
Then there’s the growing awareness of natural disasters. Destructive winter storms, out-of-control wildfires, record-breaking heatwaves—it’s difficult to ignore climate change’s threats to public safety and the economy. Consumers and grocers both have realized that sustainability goals are important not only to help end the pandemic but to begin healing the planet and forestalling a troublesome future.
Sustainability values influence everything from the products customers buy to the stores they patronize. For grocers, demonstrating a commitment to meeting specific sustainability targets is valuable from both a cost-savings and branding perspective.
For some grocers, the pandemic put their sustainability efforts on hold. Nevertheless, it hasn’t prevented the food retail industry from acknowledging how the current supply chain operations contribute to climate change. In the last few months, the nation’s leading grocers have announced their recommitment to meet significant sustainability goals. Here are just a handful to give you an idea of the direction they’re taking.
Walmart is partnering with several other international companies to launch a new climate change initiative aimed at getting more retail players to commit to decarbonization targets. Called the Race to Zero Breakthroughs, this retail campaign encourages retailers to design detailed plans for current carbon emissions and to meet the goal of limiting worldwide warming to no more than 1.5 degrees Celsius above preindustrial levels.
Additional retailers can formally join the campaign by establishing science-based climate action targets and committing to cutting greenhouse gas by 50%. To assist them in their efforts to develop net-zero road maps, the Race to Zero campaign will provide best practices for guidance and work with trade groups to drive awareness and promote resources.
Albertsons plans to submit new goals to reduce carbon emissions to the Science Based Targets initiative (SBTi), a joint venture between the United Nations Global Compact, the World Resources Institute, and the World Wide Fund for Nature that helps companies meet their greenhouse gas emissions target.
These targets align the grocery chain with the Paris Climate Agreement, which the U.S. reentered in February after a brief exit during the Trump administration. Albertsons launched this initiative in response to stakeholder feedback prioritizing energy and emissions efforts in the recent assessment of the company’s Environmental, Social, Governance (ESG) strategy.
Kroger is bolstering two of its existing sustainability initiatives. Zero Hunger Zero Waste, which aims to end hunger and food waste by 2025, has already achieved 81% waste diversion from landfills, added food waste recycling programs to 165 stores, and converted 31 manufacturing plants into zero waste facilities.
Kroger is also expanding its Simple Truth Recycling Program, which allows shoppers to mail-in flexible plastic packaging. The expansion now incorporates almost 2,500 products, including all of the grocer's private label brands.
Giant Eagle plans to achieve net-zero carbon emissions by 2040. The chain will spend $100 million over the next decade to fuel progress in environmentally friendlier products, reduced single-use plastics, alternative energy for 100% of its transportation fleet, green energy solutions, renewable power investments, energy-efficient store fixtures (such as smart lighting solutions and greener HVAC systems), and negative emissions technologies (including carbon capture, soil sequestration and reforestation).
Aldi announced new sustainability goals that address operational waste, food waste, packaging materials, and greenhouse gas emissions. By 2025, the discount grocer plans to curtail 90% of its operational waste, decrease greenhouse gas emissions by 26%, and reduce its packaging materials by 15%, and convert all of its store-brand packaging to reusable, recyclable or compostable materials. By 2030, Aldi also aims to reduce the amount of food waste it currently produces by 50%.
Through their Target Forward initiative, Target plans to make 100% of products under its private labels "designed for a circular future" by 2040. The chain also announced plans to produce net-zero emissions throughout its operations and supply chain, as well as zero waste to landfill.
Research shows that consumers are settling into a new grocery routine that retains many of the habits established during the pandemic. Even though it might mean less convenience, shoppers are concerned about the link between food safety and the environment and expect their favorite grocers to implement sustainable practices.
These leading grocery chains recognize how they can be trusted partners in their customer’s post-pandemic lives by demonstrating that they share their values, understand their new and ongoing needs, and meet those needs with innovative approaches to a sustainable supply chain.
Stay tuned for our third and final post in the series. Next up is a detailed examination of how the SmartSense solution is helping leading grocers make the digital transformation to improve food safety, sustainability, employee operations, and a supply chain connected by IoT technology.
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