Thursday, February 4, 2010

When Walmart Speaks, Everyone Listens

Back in November, Florida Grower Magazine asked EcoAsset Solutions to write an article on how Florida's agricultural community can prepare for Walmart's sustainability initiatives.  EcoAsset Solutions, a subsidiary of the Lykes Brothers, has been following Walmart closely and know they are serious when it comes to greening their supply chain.  As a company that specializes in sustainability management, we are a resource for corporations and landowners that are being asked by Walmart and the other giant retailers of the world to begin tracking and setting goals to reduce their carbon footprint, water use, and waste.  Ultimately, the answer comes down to data management, analysis, education and planning, our four areas of expertise.  The lessons of article not only apply to the agricultural community, but any business that ultimately supplies Walmart.  See the full text of the article below:

THE RIPPLE EFFECT by David Palange
Whether or not you supply to Walmart, Florida growers need to begin preparing for the giant retailer’s latest move.

As one of the largest corporations in the world, Walmart buys more U.S. agricultural products than any other retailer. Its size puts it in a position to change the way not only its 100,000 suppliers do business, but the rest of the world as well. In July, Walmart announced that it has plans to create a worldwide sustainable product index. Developed by Walmart in conjunction with various stakeholder groups, the index will be rolled out in three steps:

1. Sustainability Assessment: Send out a 15-question survey that asks all of its suppliers to evaluate their sustainability and set targets to reduce their impacts on the environment.

2. Life Cycle Analysis Database: Develop a database to collect and store information on products’ life cycles.

3. Sustainability Tool for Consumers: Create a tool that will give consumers the ability to compare the sustainability of different products based on a scoring system.

By asking its suppliers to measure the life cycle of its products, Walmart hopes to spur innovation, promote a more sustainable supply chain, and bring a new level of transparency to consumers. Measuring the life cycle of a product, also known as life cycle analysis (LCA), consists of evaluating the environmental impacts at all the stages of its production, beginning with the raw materials and ending with its disposal. For example, the life cycle of orange juice would include the impacts of all the energy, water, and materials used to grow the oranges and trees, harvest the fruit, process the juice, and package, transport, refrigerate, and dispose of the product.

A good way for a Florida grower to start preparing for Walmart’s Sustainability Index and similar initiatives would be to take an inventory of all the materials, energy, water, and waste that you use in your business on a monthly basis. Collecting the data now will allow you to quickly supply your buyers with information when they ask for it. It will also give you the opportunity to look at your own practices and find ways to become more efficient and improve your bottom line. This process has helped Walmart save millions of dollars and make significant cuts in its own energy use and waste. If growers can find innovative ways to grow, harvest, package, and deliver the same quality product by using less packaging, gasoline, and fertilizer, then they can save money, reduce ecological impacts, and potentially increase revenue by demonstrating that their practices are more sustainable than competitors’.

One of the greatest misconceptions is that becoming sustainable will drive up costs. As a business that provides sustainability management and advisory, EcoAsset Solutions knows that there are a wide variety of strategies available to improve operations, but the most successful ones must help your bottom line. Growers that take the initiative to be proactive, re-evaluate their practices, and adapt will ultimately come out on top.

David Palange

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