Build profitability through environmental stewardship
You might think sustainability is a term clever food companies use to sell products to shoppers at a higher mark-up. But in reality, sustainability is increasingly a driving force behind profitable farm businesses. More than 40% of people say sustainability has an impact on their food-and-beverage-buying habits, up 6 percentage points from a year earlier, according to an online survey conducted by the International Food Information Council Foundation, a nonprofit focused on science-based food policy and consumer education. It’s true sustainability ranks well below other criteria—convenience, healthfulness, price and, most of all, taste—but there’s evidence the business case for sustainability will grow.
“We approach sustainability as a value and growth proposition for a farm business,” explains Emily Johannes, principal at K•Coe Isom. She works closely with producers, including young farmers, to measure and report their business performance and forge relationships with customers in the supply chain. “If you don’t think about sustainability through a business value lens, then this subject is a bit of a barrier. Think of your sustainability report as your financial statement to explain and manage your farm’s stewardship and social responsibility.”
Momentum For Change. Already, major retailers such as Wal-Mart are drawing a line in the sand on sustainability, setting the stage for opportunities for young farmers. In mid-April, the Bentonville, Ark.-based retailer announced Project Gigaton, an initiative that seeks to cut carbon emissions by 1 gigaton, equal to 1 billion tons, across its value chain by 2030.
The retailer says a big part of the initiative will be driven by collaboration with suppliers and the farmers who grow and raise their ingredients to add cover crops to farmland and optimize fertilizer applications on 76 million acres by 2025.
“It’s good for our business, and it’s good for the environment,” says Laura Phillips, senior vice president of sustainability for the company.
The retailer has led other stakeholders to dig into the economic opportunities for sustainability in agriculture, says Suzy Friedman, director of agricultural sustainability for the Environmental Defense Fund (EDF). Within ag, the nonprofit focuses on commodity crops.
“Food companies and the supply chain are speaking up, connecting to their sourcing areas and developing more of a connection to farmers so they feel more a part of that overall food system,” Friedman says.
Tactics for Assessing your Farm’s Sustainability
Lenders, landowners and food companies are increasingly interested in producers’ on-farm sustainability practices, says Emily Johannes, principal at K•Coe Isom. It’s a good idea for farmers to collect that data in one place.
Budget For Assessment. The initial phase of a sustainability review costs as little as a few thousand dollars. More data can be collected depending on what a farmer hopes to do with the information.
Look To Learn. Most farmers already do 40% to 70% of what retailers and food manufacturers expect, Johannes says. Use an assessment to identify the core strengths of your farm as well as opportunities.
Hire A Professional. Although greenhouse-gas emissions and soil health are common sustainability metrics, there are often others depending on your customer. Find an expert to navigate the process.
Write It Down. Turn your findings into a report and share it widely to showcase your operation’s practices. Use it when visiting with lenders, landowners and even on your website and social media.