When a consumer pours a bowl of Raisin Bran, he probably considers Kellogg’s the source of his breakfast — not the farmer who grew the wheat or harvested the grapes.
Most consumers don’t make this distinction when it comes to the source of their food, yet these big-name consumer brands are fully dependent on farmers to grow the food and raw materials that they need for their products.
In a world that’s laser-focused on sustainable food sources for its growing population, this unique relationship can create a number of challenges and opportunities for both parties. And when it comes to sustainability, a joint effort is necessary for success.
Brands Need to Get Involved
Today, companies are realizing that it’s their responsibility to increase sustainability in crop production. They’re paying attention, and they’re getting involved.
But for farmers to buy in, companies have to be willing to get their boots dirty and show a little effort. Farmers need to know that a company’s outreach isn’t an email or magazine ad; it’s a genuine attempt at a mutually beneficial partnership. By truly walking with farmers — both figuratively and literally — companies can show that they’re serious about their sustainability practices.
For instance, as part of its sustainable living plan, Unilever focuses on sourcing high-quality ingredients responsibly and sustainably. And by 2020, Unilever hopes to sustainably source 100 percent of its raw agricultural materials.
Unilever is getting in touch with farmers directly, rather than dealing with processing companies or co-ops. From there, each farmer decides which direction he wants to go: follow the farm bill and take the insurance to mitigate risk, or go corporate.
Companies Making Strides Toward Sustainability
Unilever isn’t the only company focused on sustainable sourcing. Other big-name food distributors — such as Walmart, Coca-Cola, and General Mills — have taken steps to work with suppliers on environmental improvements. Here are just a few ways they’ve made strides in this area:
- General Mills contributed $300,000 to help vegetable farmers incorporate practices to reduce erosion in the Root River region of southeastern Minnesota. Additionally, the company provided interest-free loans to farmers investing in drip irrigation equipment in Irapuato, Mexico.
- Nestlé recognizes the importance of a secure, long-term supply of ingredients for food and beverage production. On its website, Nestlé says, "We want to help retain the brightest and best talent within farming communities and use our ‘agripreneurship’ model as a training pipeline for farmers wishing to develop their skills."
- Kraft uses a steady stream of farm products. It recognizes that endorsing sustainable farming practices can directly result in superior materials, which will help protect the environment and improve the quality of life in local communities.
Focus on the Farmer
As these practices become widespread, farmers are less dependent on government subsidies, which is fantastic. This issue dates back to World War II, when the need for food increased. Farmers were asked to produce more food with fewer workers, as well as comply with new regulations. Those requests were costly, which farmers were quick to point out. In response, the government offered to subsidize and provide insurance — the momentum for the first farm bill.
To a farmer, it boils down to a simple ultimatum: be in the business of growing things, or be in the business of not growing things and getting paid for it. Here’s the breakdown:
- The government spent $292.5 billion in subsidies between 1995 and 2012.
- According to the USDA, 62 percent of farms in the U.S. didn’t collect subsidy payments.
- Crop insurance is becoming more important to farmers than direct payments.
Farmers and their land benefit from the ability to step outside of a government-subsidized relationship and get involved in a private business relationship with manufacturers. They have the freedom to do what’s right by the land and by them.
How Corporate Payouts Work
When large companies partner with farmers, they have more influence on how farmers take their products to market, and they’re involved much earlier in the process. For instance, a corporation could instruct a farmer to plant 10,000 acres of corn without any pesticides, GMO seeds, etc., and the farmer would be under contract to deliver. This is a big shift away from the traditional farming mindset that uses yield as the primary success metric.
By prioritizing sustainability from seed to factory, companies are able to work sustainability into their marketing messages and merchandising strategies. They can leverage the consumer demand for GMO-free, gluten-free, organic, and USDA-approved products.
Take Navitas Naturals’ Power Snacks, for example. The package labeling shows the product is raw, vegan, organic, gluten-free certified, and GMO-free. The company wants to make it clear that these snacks were produced from the purest, most natural ingredients, as opposed to standard over-manufactured products, which tend to be full of preservatives and made with ingredients harvested in a non-sustainable way.
As companies realize that they are able to make a significant impact on large-scale crop production, farmers are faced with a decision. Whether they’ve got 60-acre farms or 6,000-acre farms, a corporate partnership could be a serious advantage for both parties — but it has to be done the right way. Companies must explain their core messaging in a transparent, sincere way that resonates with farmers and makes it about more than just marketing.
Either way, farmers have the right to explore their options.
For nearly 30 years, Doug Austin has been studying the "art of observation" and filtering out the human truths. Whether digging for key consumer insights or preparing the next national retail promotion, it’s all about the ability to "hear and see" what others may not and asking the hard questions. Austin is the SVP of growth and innovation and leads product and brand innovation sessions for Marlin Network.