Using ‘Sustainability’ to Market U.S. Foods In Europe

An Expert's View about Agriculture and Animal Husbandry in France

Posted on: 28 Nov 2012

This report provides information and analysis for U.S. food and agricultural exporters on the topic of „sustainability.‟

EU-27 Sustainability Report 2012 THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Voluntary Public - Date: 11/2/2012 GAIN Report Number: AU12008 EU-27 Post: Vienna Using ‘Sustainability’ to Market U.S. Foods In Europe Report Categories: Special Certification - Organic/Kosher/Halal Retail Foods Market Promotion/Competition Approved By: Paul Spencer Prepared By: Roswitha Krautgartner, Sabine Lieberz and EU-27 analysts Report Highlights: This report provides information and analysis for U.S. food and agricultural exporters on the topic of „sustainability.‟ 1 EU-27 Sustainability Report 2012 This report was a group effort of the following FAS posts and analysts: FAS/Berlin covering Germany Sabine Lieberz USEU/FAS Brussels covering EU policy Karin Bendz FAS/Budapest covering Hungary Ferenc Nemes FAS/London covering the U.K. and Jennifer Wilson Ireland FAS/Madrid covering Spain and Portugal Arantxa Medina, Diogo Machado FAS/Paris covering France Marie-Cecile Henard, Laurent Journo FAS/Rome covering Italy and Greece Ornella Bettini, Dana Bettini FAS/Stockholm covering Denmark, Bettina Dahlbacka, Asa Wideback Finland, Sweden FAS/The Hague covering the Belgium, Bob Flach, Marcel Pinckaers The Netherlands, Luxembourg FAS/Vienna covering Austria and Roswitha Krautgartner Slovenia 2 EU-27 Sustainability Report 2012 Using ‘Sustainability’ to Market U.S. Foods In Europe Contents Section 1 Executive Summary Section 2 Sustainability in Europe – Introduction for Food & Feed Marketers Section 3 EU Policies and Initiatives Section 4 Member State Government & Private Initiatives Section 5 Private and Company Initiatives at the EU Level Section 6 U.S. Sustainable Products with European Market Potential Table 1: Summary Table by Product Group and Member State Table 2: Summary Table by Product Group and Member State (cont.) Attachment A - Selected Member State Sustainability Fact Sheets Austria The Netherlands Denmark/Finland/Sweden France Germany Greece Hungary Italy Portugal Spain United Kingdom Attachment B - Importance of Sustainability Marketing & U.S. Ag Exports to EU Attachment C – Related Reports Attachment D - Abbreviations Used 3 EU-27 Sustainability Report 2012 Section 1 – Executive Summary The European ‘sustainability’ movement is amorphous and presents both opportunities and threats to exporters of U.S. food and agricultural products. Sustainability also has marketing and policy implications that are in some instances closely related. To provide a conceptual framework that is useful to U.S. exporters, this report focuses on European Union (EU) policy initiatives, provides ‘fact sheets’ on government and private initiatives in selected EU Member States, and highlights U.S. products that might benefit from emphasizing sustainability in marketing efforts. The 27 countries of the EU have, to varying degrees, cultivated the concept of sustainability for the past two decades and the influence of the movement is now being felt more fully in food and agriculture. Austria, Demark, France, Germany, the Netherlands, Sweden, and the United Kingdom are leading the sustainability discussion in Europe and their governments are promoting a wide range of voluntary sustainability labels and programs. Spain also has hot button sustainability concerns, such as fisheries, and is becoming an increasingly competitive supplier of sustainable fruits and vegetables. Central and eastern EU members, such as Hungary, are not experiencing a ground swell of consumer sentiment on sustainability but do stand to benefit from marketing sustainable products in wealthier EU markets. At a broader EU-policy level, there is sustainability legislation for biofuels. Although U.S. legislation addresses sustainability criteria, sales of U.S. soybeans have been impaired because of the way European certification processes are being applied. EU legislation is also expected soon for biomass used in the energy sector. While there is not currently EU-wide sustainability legislation for foods, the EU is considering guidance on „environmental foot printing‟ to allow consumers to more easily compare products. For most large European food retailers, sustainability has become a component of their overall marketing strategy. As a business practice, European food processors and retailers are moving toward private sustainability certification, which includes criteria that are applied throughout the food chain. In addition, European retailers have introduced successful in-store private labels that highlight sustainable production. U.S. exporters and producers are increasingly being told that sustainability certification is a commercial requirement for doing business in Europe. The complexity and cost of private certification schemes vary and, in some instances, certifying bodies have raised fees dramatically once they have achieved wider market recognition (e.g., seafood). In response, some U.S. commodity groups are developing their own sustainability criteria and programs to substitute for private certification. Building acceptance among European retailers and food manufactures remains a significant marketing constraint for U.S. industries developing their own sustainability standards. Aside from policy and marketing constraints, the European sustainability movement has the potential to increase demand for U.S. products. Because the United States has world-class environmental regulation and enforcement, there exists a real opportunity to highlight the sustainability of U.S. products sold to Europe. Within this context, one challenge is very limited knowledge about which aspects of U.S. sustainability are most marketable in Europe and how these „levers‟ vary among European countries. 4 EU-27 Sustainability Report 2012 Section 2 - Sustainability in Europe – Introduction for Food & Feed Marketers Since the 1980s, sustainability has become a buzzword with varying definitions and meanings. In 1987, the World Commission on Environment and Development‟s Brundtland Report coined the most widely recognized definition: “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” At the 2005 World Summit, the United Nations (UN) portrayed sustainability as being built on “three pillars” of environmental, social equity and economic demands. Sustainability is now a well established topic in Europe and within the European market. An increasing number of companies in nearly every category are developing and introducing their own sustainability strategies to meet consumer, business-to-business, and regulatory demand. In general, for a product to be credibly sold as sustainable, a balance between social, economic and environmental impacts needs to be documented and verified. For agriculture, the European Commission has introduced requirements for biofuels and biofuel feedstock that include sustainability certification. These were implemented in varying ways by individual EU Member States over varying periods of time. Despite the sustainability of U.S. soybean production, exports of soybeans for biofuel use have decreased since the introduction of biofuel sustainability certification. The take-away lessons for U.S. food exporters are, first, while there are not currently sustainability rules for foods at the EU- level, the potential for regulation extists (such as „footprinting‟, which is discussed below); and, second, the market requirements being placed on suppliers are changing and need to be addressed proactively. The influence of sustainability movement is felt throughout the entire food chain, with even minor ingredient suppliers being asked to participate. Europe‟s food retail sector is relatively concentrated and the top 10 firms account for a high percentage of sales, especially in countries were sustainability is an important marketing consideration. Sustainability-centered marketing campaigns and products are being used to achieve a competitive advantage and most large agricultural, food and food processing companies in Europe now include sustainability in their mission statements and strategic planning. European retailers are requiring more and more food products and ingredients to be certified as having been produced or harvested in a sustainable manner, including those coming from the United States. „Sustainability‟ is used both defensively and offensively in food marketing. Driven by NGOs, and to counter negative campaigns, agricultural, forestry, fishery, and food companies have established voluntary sustainability programs for their products. These programs may cover wide ranging issues, including: environmental concerns like greenhouse gas savings; land use; water use; social issues such as fair and healthy treatment of farm workers; or economic issues like sourcing of regional products to strengthen Europe‟s rural areas. 5 EU-27 Sustainability Report 2012 Unlike in North and South America, there is little consideration given in Europe to the sustainability potential of new production technologies, such as genetically engineered (GE) crops. In contrast, European policy makers and NGOs loosely equate organic production with sustainability and organic products are marketed as sustainable per se. Spain is an exception, where both the government and industry advocate vocally for the important role that technological innovation can play in sustainable production. Because the term sustainability is used to sell everything from toothpaste to dog food, the term risks becoming devalued or, at the very least, becoming a source of consumer confusion. As an example of the cacophony of sustainability labels and claims, Austria, a country of eight million, officially recognizes 22 sustainably-based labels for dairy products alone. It is safe to say that Austrian consumers are familiar with only perhaps a few of these. Similarly, for producers and marketers, there are so many sustainability initiatives available and in use in Europe, signing up for all of them is impossible. In this complex business environment, U.S. firms exporting to the EU should be informed about current trends in sustainability marketing and business practices in their target markets. Section 3 - EU Policies and Initiatives EU Institutions The EU is an economic and political union of 27 member states operating through a complex system of supranational institutions and intergovernmental processes. Important EU institutions in the formulation of sustainability policy include the European Commission, the European Council, and the European Parliament. Within the European Commission, DG Agriculture, DG Environment, DG Climate-Action, and DG Energy all play leading roles in designing and implementing sustainability proposals. DGs Agriculture and Environment focus on resource issues such as carbon, water, and biodiversity. The mission of DG Agriculture is to promote the sustainable development of Europe's agriculture and to ensure the well- being of its rural areas. Sustainable production is defined as an agricultural sector which is able to maintain viable production throughout the territory of the EU and which at the same time contributes to key environmental goals, including the protection of natural and cultural resources and the achievement of successful climate change mitigation and adaptation. The European Commission is co-chairing the European Food Sustainable Consumption and Production Round Table, which began as an industry initiative. The objective of this round table is to help consumers and other stakeholders to make informed choices by providing them with accurate and understandable information on relevant product characteristics, including environmental performance. This will be done by the development of a common framework that facilitates environmental assessments. 6 EU-27 Sustainability Report 2012 Sustainability in the EU Sustainability, sustainable production, and environmental issues are a growing concern among EU policymakers, who view sustainable production as a competitive advantage, especially as consumer awareness of the environment continues to grow. NGOs are an important source of pressure on policy makers, often claiming to be the „voice of the people.‟ EU policy makers have expressed their desire that communication and marketing on sustainability be clear, understandable, consistent, and allow consumers to compare similar products based on sustainability criteria. In recent years, the EU has introduced sustainability criteria for biofuels, which has prompted the question of why criteria do not also exist for food and feed production. In general, the European Commission follows the UN by including environmental, social, and economic criteria to define sustainability. According to the Commission, the biggest challenge for the agricultural sector will be to balance the need for Europe to provide its share of global food supplies while at the same time making long-term improvements in biodiversity, landscape, soil, water, and air quality together with resilience to climate change. These goals are reflected in the EU‟s broad agricultural legislative proposal, Common Agriculture Policy post 2013. Biofuels In the EU, the Renewable Energy Directive (RED) sets a 10 percent minimum target for renewable energy consumed in the transport sector, and a 20 percent target for all energy consumed in the EU by 2020. The transport goal is to be achieved by all EU Member States, and it drives the demand for biodiesel and ethanol. U.S. soybeans are an important feed stock for EU-biodiesel production and U.S. exports of ethanol have increased substantially in the past few years. In order to count toward member state renewable fuel use targets, or receive any incentives, biofuels must meet certain sustainability criteria. The RED lays out specific sustainability requirements, including minimum greenhouse gas (GHG) emissions reductions, land-use criteria, and economic and social criteria such as adherence to International Labor Organization conventions. The RED entered into force on June 25, 2009, and was to be transposed into national legislation by December 5, 2010. Implementation and enforcement by EU countries is uneven but large buyers, such as Germany, do require sustainability certification. Other large buyers, such as Spain, have not enacted sustainability requirements, but plan to do so in 2013, over two years behind schedule. The RED creates a multi-layered framework in which member states have the freedom to implement their own system of proving compliance with the EU‟s sustainability criteria but that system may only be applicable within that particular member state. At another level, there are European Commission approved sustainability certification schemes that must be accepted by all 27 member states. The diversity in Member State approaches, the Commission‟s approval of voluntary EU-wide certification schemes, and a reluctance to negotiate bilateral agreements with trading partners creates a maddening scenario for exporters and purchasers of biofuels and biofuel feedstock. 7 EU-27 Sustainability Report 2012 Foot printing In 2003 and in 2010, the European Commission was tasked with considering a common methodology to assess the environmental impact of products. In the September 2011 document titled, „Roadmap to a Resource Efficient Europe’, the Commission indicated it will establish an approach that would allow EU Member States and the private sector to assess, display, and benchmark the environmental performance of products, services, and companies, and to provide better information on the environmental footprints of products to prevent misleading claims and to refine eco-labeling schemes. The EU is considering guidance on the marketing use of environmental foot printing to ensure that consumers are not mislead and can compare similar products on the basis of their impact on the environment. The EU sees other benefits to this approach, including encouraging environmentally responsible actions by industry, creating value for EU products, and supporting the single EU market. Some Member States are moving forward on developing domestic approaches and the Commission hopes to avoid creating a situation where there are a host of different requirements. Internationally accepted approaches are not generally considered to be strong enough, consistent enough, nor prescriptive enough to substitute for sustainability standards being implemented in Europe. Emphasis is being placed on comparability, not flexibility. After analyzing the existing methodologies, the Commission drafted a methodology guide and conducted a pilot test with some EU and foreign companies. The pilot program identified important gaps in experience and data that need to be addressed. In 2013, the Commission expects to launch a larger pilot with the new methodology, which is expected to last two or three years. There is no deadline for participating in the pilot program and non-EU organizations are welcome. In 2015-2016, the Commission expects to revisit implementation of the methodology based on the results of the second pilot program. Section 4 - Member State Government & Private Initiatives USDA/FAS offices in Europe have reviewed sustainability initiatives in selected EU Member States. Summary results of this review may be found in Attachment A. U.S. exporters are encouraged to review these when formulating specific marketing plans. 8 EU-27 Sustainability Report 2012 Section 5 - Private and Company Initiatives at the EU Level Top Food retailers in Europe Turnover in Europe 2010 in Billion € Turnover Short List of R (Food Corporate ank Retailer Accepted Link to Sustainability Policy portion Headquarters Certifications only) 1 Carrefour 57.1 France MSC, FSC, RSPO carrefour-eqc/ 2 Schwarz 49.8 Germany Fairtrade, MSC, Gruppe FSC, PEFC, Rainforest alliance, Utz certified 3 41.4 Fairtrade, MSC, RSPO, FSC, PEFC, Tesco UK Organic 4 Rewe 38.1 Germany Organic, Blau Angel, MSC, Fairtrade, ProPlanet 5 Edeka 37.5 Germany FSC, MSC, RSPO, RTRS, Proterra 6 Aldi 35.8 Germany MSC, ASC, GlobalG.A.P., Organic, FSC, PEFC, RSPO 7 Auchan 31.6 France 8 Metro 28.1 Germany MSC, GlobalG.A.P., Global Organic Textile Standard (GOTS), Fairtrade, Rainforest Alliance 9 ITM 24.2 France 10 Leclerc 22.8 France Source: Sales data from Planet Retail - June 2011; Certifications compiled by FAS European Offices 9 EU-27 Sustainability Report 2012 Major Sustainability Certification Programs for Europe’s Top 10 Retailers Program Label Products Link Aquaculture Stewardship Fish from ASC Council aquaculture broad variety Fairtrade of products Forest Forest Stewardship products, FSC Council paper GlobalG.A.P. Fresh produce america/front_content.php Marine Stewardship MSC Council Fish Organic Textile Apparel, Standard textiles Programme for the Endorsement Forest of Forest products, PEFC Certification paper Pro Terra non-gmo soy programmes/proterra-certification REWE store brand for sustainable variety of ProPlanet products products bananas, coffee, tea, Rainforest chocolate, Alliance pineapples Roundtable on Sustainable Palm RSPO Oil Palm oil Round Table on Responsible Soy RTRS Association soy Cocoa, cotton, palm Ut z certified oil, tea, 10 EU-27 Sustainability Report 2012 Section 6 – U.S. Sustainable Products with European Market Potential Table 1: Summary Table by Product Group and Member State Austria x x x x x Belgium x x x x x x x Denmark x x x x x Estonia France x x x Finland x x Germany x x x x x x x x x Greece x Italy x Luxembourg x x x Netherlands x x x x x x Spain Sweden x x x x x x United Kingdom x x x x x x Table 2: Summary Table by Product Group and Member State (cont.) Austria x x x x x x x x Belgium x x x x x x Denmark x x x x x x France x x x Finland Germany x x x x x x x Greece x x Italy x Netherlands x x x x x x x Spain Sweden x x x x United Kingdom x x x x x x 11 Biofuel f eed- High qualit y st ocks beef Chocolate M eat Cocoa Nuts P Coff ee & t ea et f ood Palm Cott on oil Rice Dair y product s Snack f ood Dr ied Fruit s Soybeans Eggs Wheat Exotic fr esh Win f r uit s e Fish & Wood seaf ood Fruit s & vegetables Fruit Juices EU-27 Sustainability Report 2012 Attachement A – Selected Member State Sustainability Fact Sheets Austria Sustainability Fact Sheet for U.S. Food and Agricultural Exporters General Austrian consumers are very attuned to the environmental, social and economic issues related to sustainability, a view that is reinforced through campaigns by influential NGOs. All major Austrian food retail chains have their own sustainability programs and logos and many have developed private label brands. The most important sustainability themes adopted in Austria are: organic, regionally produced, GHG savings, fair trade, and GMO-free. Government Initiatives The Austrian government strongly promotes sustainable agricultural, food and forestry products and sees itself as a European leader in sustainable development. Government publications reguarly include sustainability (called Nachhaltigkeit in German) as a buzzword. Austria was one of the earliest EU member states to implement sustainability criteria for biofuel feedstocks. Strategy In 2002, the Austrian federal government introduced its first strategy for a sustainable development called NSTRAT, which today defines fields of action and key objectives within each field. The four fields of action for those issues of relevance to agriculture, forestry and food, are: Quality of life in Austria A sustainable life-style Austria as a dynamic business location Correct prices for resources and energy Strengthening sustainable products and services Living spaces in Austria Protection of environmental media and climate Preserving the diversity of species and landscapes Responsible use of land and regional development Shaping responsible mobility Optimizing the transport systems Austria‟s responsibility A global sustainable economy The government has been working on a new strategy for sustainable development which is expected to be published and implemented by the end of 2012. In July 2010, the Austrian federal government, together with provincial governments, began implementing the national sustainability strategy under a program called OeSTRAT. In addition, the Austrian agro-environmental program OePUL includes 29 measures promoting environmental friendly practices, extensive use of natural resources, and organic and alpine agriculture. In 2011, the OePUL program provided Euro 549.2 million to farmers complying with the requirements of the program. Seventy percent of total Austrian farmers and 89 percent of the Austrian agricultural land participate in the program. 12 EU-27 Sustainability Report 2012 There are a number of sustainability projects which are supported by the Austrian federal and the provincial governments. One example is the joint initiative of the Austrian ministries of agriculture and environment, of economy and of foreign affairs to sponsor a web-based information platform to promote sustainable consumption of food and other consumers‟ products. This information platform publishes information on sustainability with the goal of increasing consumer awareness. The web page includes a database of sustainable products and sustainable labels. The government decides whether a product can be regarded sustainable and enter the database. To date, the platform called includes 41 retailers and retail chains, 20 producers and 19 associations. More than 1,150 food products can be found in the database. Most important products by number are milk and dairy products, followed by coffee and tea, grains and grains products (including bakery products), meat and meat products, seasonings, and fruits and vegetables. The specific sustainable criteria under which the labels are certified as well as control mechanisms can be found on the webpage. Private Initiatives REWE Austria has nearly a third of Austrian food retail sales. In addition to its organic label “Ja Natuerlich” which was the first to appear on the Austrian retail sector, “Pro Planet” is the sustainable label used by the parent company REWE group. In cooperation with NGOs REWE identifies different sustainability criteria for different food products. The label indicates whether a product is produced using GHG saving methods, using limited resources and/or socially responsible labor conditions. Currently, the product categories eggs, fish, vegetables, and fruits fall under the under the Pro Planet label. Other labels REWE uses are Vega-Vita and Gentechnik-frei (GMO free). REWE has also its own pesticide reduction program, guidelines for sustainable economic activities and guidelines for sustainable palm oil. REWE actively promotes its own environmental and social initiatives ( Spar has nearly 28 percent of Austrian food retail sales. Under the slogan “Spar setzt Zeichen fuer unsere Zukunft(“Spar blazes a trail to our future“) Austria‟s second largest is using sustainably themes competitively. In addition to its own organic label, “Natur pur”, Spar accepts and uses the labels from sustainability certifiers such as MSC and WWF. Spar supports sustainability-related charity projects and focuses on sustainability in their customer magazine ( Hofer is by far the largest Austrian discounter with about 20 percent of Austrian food retail sales. Hofer promotes labels such as FairTrade, Natur aktiv (organic) Zurueck zum Ursprung (“Back to the source,” an organic label with sustainability values for CO2, water use, biodiversity), WWF, MSC ( Promising U.S. Products Market opportunities for U.S. sustainable products include mainly products which are not sufficiently locally produced or have a high quality. Those sustainable products include fish and seafood products, nuts, wine, pet foods, dried fruits, fruit juices, snack foods, and high quality beef. The Netherlands 13 EU-27 Sustainability Report 2012 Sustainability Fact Sheet for U.S. Food and Agricultural Exporters General Sustainable food is an important growth markets for Dutch food retailers and food processors. Sales of sustainable foods (broadly defined and including „organic‟) rose by nearly a third in 2011 while total spending on food in the same year only grew by 3.1 percent. The market share of sustainable foods increased from 3.5 percent in 2010 to 4.5 percent in 2011, or about Euro 1.7 billion. The Netherlands is also a major trans-shipment and/or processing point for food commodities and biofuels, in particular those moving on to Germany. Dutch food processors and commodity handlers have adopted sustainability sourcing requirements to ensure they are able to remain competitive in other EU countries. For example, in 2011, FEFAC, the Dutch association of oilseed crushers, processors and feed compounders, announced their intention to only source sustainably produced soybeans starting in 2015. Government Initiatives The Dutch Ministry of Economic Affairs, Agriculture and Innovation (MinAg) published a 2011 report titled, Monitor Duurzaam Voedsel, which gives an overview of consumer spending on sustainable food in the Netherlands. MinAg defines sustainable food as having production and processing above and beyond what is legally required for environmental, animal welfare and social criteria. In the report, two criteria are used to measure sustainability claims: 1) at the consumer level, sustainability efforts are visible by a label or logo; and, 2) control of the logo or mark must be independent. In addition, the Ministry feels it is more correct to speak of sustainable foods as a relative matter and to indicate how a product is proportionally more sustainable than another product. The emphasis is on the process towards sustainable. Private Initiatives Below labels or marks are examples of sustainable food products that are currently recognized by Dutch Ministry of Economic Affairs, Agriculture and Innovation. Beter Leven: Organic: FAIRTRADE/Max Label Rouge: MSC: Havelaar: Milieukeur: Rainforest Alliance: Scharrelvlees: UTZ Certified: Vrije Uitloop: The following are more recent labels and initiatves.- Beter Leven: The Beter Leven (or Better Life) is a system by the Dutch Society for the Protection of Animals (or Dierenbescherming) which is widely accepted in the market. The amount of stars indicates 14 EU-27 Sustainability Report 2012 the level of animal welfare friendly ( Organic: On July 1, 2010, the use of the EU organic logo became mandatory for prepackaged organic food produced in the EU. It may be accompanied by national (EKO) or private logos, (http://www.eko- (Note: there is a new US-EU organic equivalency arrangement – U.S. products meeting the USDA/NOP standard now generally are considered „organic‟ in the EU. See: FAIRTRADE/Max Havelaar: This mark continues to demonstrate growth. It focuses on raw materials and fresh produce such as bananas and pineapples, ( Label Rouge/Scharrel/Vrije uitloop: There is an increasing number of animal-welfare friendly products and sales in 2011 reportedly doubled. Label Rouge, Scharrel and Vrije uitloop products are slowly being phased out as many of these products are now being rated with Beter Leven stars. Marine Stewardship Council: One goal of the Dutch retailers association, CBL, has been to have all fisheries products MSC certified by 2011. This was not achieved because supply is still inadequate. MSC certified products have perhaps the best market penetration of any sustainable food label and is widely recognized by consumers. This year, Aquaculture Stewardship Council (ACS) launched its own label for certified aquaculture products ( Milieukeur: The Milieukeur mark, a logo for environment friendly products, is being used less and less on packaging. Although not visible, it is a certifying system used in a business-to-business context ( Rainforest Alliance: The use of the Rainforest Alliance logo has stabilized in the Netherlands, ( UTZ Certified: Initially designed for coffee, UTZ now has programs for cocoa, tea, palm oil and cotton ( What are Dutch retailers doing? In May of this year, a new App was launched to help consumers make sense of competing sustainability logos and claims. Food products are measured on several sustainability aspects (animal welfare, effect on environment) and health ( The website (eat more sustainable) is a platform for consumers to learn about sustainable labels, logos and certification. In addition, it provides a brief overview of some of the sustainability initiatives by Dutch food retailers. Market leader Albert Heijn plans to have all their private label products produced and labeled sustainable by the end of 2015. The current focus is on the following six product groups: coffee, tea, cocoa, soy, palm oil and seafood. A successful Albert Heijn private label is “Puur&Eerlijk”. For seafood, Albert Heijn would like to have all private label fishery products MSC, or equivalent, certified, and all private label aquaculture products ASC certified, by 2015. For that past two years now, Albert Heijn has 15 EU-27 Sustainability Report 2012 sold eggs certified as coming from so-called Rondeel production, which reportedly provides better living considitions for hens. Rondeel eggs have been given the maximum 3 stars by Beter Leven mark and are now also now being sold in the German market ( PLUS supermarkets recently ran a TV advertising campaign to highlight their sustainability initiatives. The video focuses on FAIRTRADE bananas and pineapple and on sustainable fish ( Jumbo recently stated that by 2015 it wants to be the most sustainable supplier of meat products in the Netherlands. This year all pork sold in its stores will reportedly have the Milieukeur mark. Next year, Jumbo plans to introduce antibiotic-free meat products. In addition, Jumbo wants to pay more attention to animal welfare friendly production. On the seafood side, MSC certified products are playing a bigger role. Jumbo‟s C1000 recently introduced private label UTZ certified coffee. This coffee has been produced by farmers that comply with the social, economic, and environmental criteria. German based discounter Lidl wants to boost its range of sustainable food products. All cooled and frozen fishery products will be MSC certified while all fresh milk will carry the Weidemelk logo. Finally, all of Lidl‟s private label chocolate products will only use UTZ certified cocoa. DEEN supermarkets only sell fresh pork through their Sustainable Pork Value chain (KDV) with a Milieukeur mark. DEEN‟s special focus has been on animal welfare and environmental concerns. Together with World Wildlife Fund, Stichting Noordzee and MSC, DEEN adapted its fish procurement to use the viswijzer ( Endangered species have been replaced by MSC certified fishery products. Promising U.S. Products At the retail level, four product groups seem to have the highest level of market penetration for sustainable products: 1) coffee, tea, cocoa, palm oil and cotton, 2) meat products, 3) seafood and 4) (exotic) fresh fruit. Market opportunities for U.S. sustainable products are therefore found in these product groups, and where there is not a sufficient supply locally, and products that carry a logo/label that is recognized. At the moment there could be a market for U.S. seafood, organic products and (exotic) fresh fruit. 16 EU-27 Sustainability Report 2012 Spending on sustainable food products, per label/mark, million Euros Label/Mark: 2010: 2011: Change in percentage: Beter Leven 153.6 295.3 92.3 Organic 668.5 802.9 20.1 FAIRTRADE/Max Havelaar 155.9 188.3 20.8 Label Rouge 0.8 1.2 50.0 MSC 111.3 130.5 17.3 Milieukeur 31.4 30.1 -4.1 Rainforest Alliance 98.0 97.8 -0.2 Scharrelvlees 0.2 1.7 750.0 UTZ Certified 214.5 328.0 52.9 Vrije Uitloop 8.0 4.3 -46.3 Total 1,442.2 1,880.1 30.4 Products with more than 1 102.3 131.5 28.5 label or mark Total 1,339.9 1,748.6 30.5 Source: Ministry of Economic Affairs, Agriculture and Innovation Denmark/Finland/Sweden Sustainability Fact Sheet for U.S. Food and Agricultural Exporters General Sustainable development is a key objective for the Nordic countries of Denmark, Finland and Sweden. Nordic retailers are shifting their product ranges towards an increasing share of sustainable food products. Consumers have become increasingly interested in sustainability of the food they buy and eat. Generally, domestic agriculture has started to adjust to the consumers‟ demand for sustainable production and more pressure is being put on international suppliers to certify their products. Government Initiatives In the Nordic countries, there are several governmental programs that promote sustainable food production and consumption. The governments have encouraged development towards more organic foods. Denmark was one of the first countries in the world to introduce legislation covering organic production in 1987. In 2012, the Danish government launched an Action Plan for organic production to double by 2020. The new Action Plan includes various initiatives aimed at farmers, the processing and retail sectors, and consumers. The Nordic countries encourage public actors to adopt sustainable procurement in the government and the municipal sectors. In addition to national initiatives, the Nordic countries are working closely together to promote sustainable development in the region. The collaboration is organized through the Nordic Council of Ministers, the official co-operation body of the Nordic governments. The Council is the first international organization to initiate the formulation of a set of common criteria for green public procurement. Recently, The Nordic Council of Ministers sponsored a new website for retailers promoting green thinking in this sector. The official Nordic environmental label, the Nordic Swan Ecolabel, was created in 1989. The strengths of the Nordic Swan label include its coverage across the Nordic region, high 17 EU-27 Sustainability Report 2012 product uptake, government certification and extensive brand awareness among consumers. Sustainability criteria, in addition to those of the environment, are gradually being added to the Nordic Ecolabel. Private Initiatives There is clearly a growing interest in the Nordic retail sector to stock shelves with sustainable products and it is an interest driven by customers‟ preference. Nordic retailers are actively working on supplier requirements for sustainable products and packaging and they all have sustainable supply chain programs. For Nordic retailers with a high sustainability profile, it is most important to work pro-actively in order to preserve and improve corporate image and brand and to avoid accusations of „green washing.‟ As an example of an industry initiative, the Swedish Climate Certification for Food is a joint initiative between Swedish Seal/Svenskt Sigill and KRAV, Sweden‟s two organizations working with certification of food, as well as the Federation of Swedish Farmers and four major Swedish food companies, Lantmännen, Scan, Milko and Skånemejerier. The purpose is to create a certification system, which will reduce the negative climate effects in food production and give consumers a chance to make conscious climate choices. Criteria, data and scientific reports are available at english Also, the National Food Administration together with the Swedish Environmental Protection Agency has put forward “Environmentally Smart Food Choices” with advice to consumers on how to make environmentally sustainable smart choices. The choices are formulated with regard to six groups of food: meat, fish and shellfish, fruits, berries, vegetables and leguminous plants, potatoes, cereals and rice, dietary fat and water. Recommendations are given in relation to six environmental objectives. The major Nordic retailers all have organic labeled products in their private label series. ICA has their own brand “I love Eco” in Sweden and Norway. Coop in Sweden, Norway and Denmark have a common organic label, Änglamark. In Denmark competing retailer groups, Coop, Dansk Supermarked and SuperGros, together cover 97 percent of the Danish MSC certified sustainable seafood market. The number of MSC labeled products on the Danish market has surpassed 500, and increased by 75 per cent in 2011. In Finland, Kesko, Inex Partners and Tuko all have Swan labeled products in their private label series. Also, there are some Fair Trade and MSC labeled products. Coop is Denmark‟s major retailer with a market share of 38 percent. Coop has made public a wide range of sustainability-related goals, including: To become Denmark‟s largest selection of organic products. Double sales of sustainable products. Stop the sale of concentrated herbicides. To have Denmark‟s largest selection of MSC labeled fish products. Develop and market new FSC labeled products. Reduce packaging. Establish at least two eco-labeled stores Dansk Supermarked has a 31percent share of Danish retail food sales. Sales of organic products are increasing and Dansk Supermarked has a wide range of organic products with the Danish state- controlled red organic label. The retailer has a range of products with the Nordic Swan or the European 18 EU-27 Sustainability Report 2012 Ecoolable and about 1,200 private label products. S Group is Finland‟s largest retailer with a market share of 44 percent. S Group systematically develops its product ranges to include products that carry eco labels and are ethically produced. Demand for organic products has clearly been increasing in the last year. S Group‟s grocery stores are the largest sellers of organic products in Finland and in 2011, sales increased by 50 percent and more than 700 new organic products were added to the assortment. The S Group grocery stores carry 83 Fairtrade products, 116 products with the Nordic Swan label, 147 EU eco-label products, 25 fish products with MSC certification and 62 products with FSC label. The S Group is expanding it range of sustainable products in response to increased demand. Kesko has 35 percent of Finland‟s food retail sales the country‟s largest selection of Fairtrade products. In 2011, Kesko Food had 222 Fairtrade products of which 38 were Pirkka (private label) products. The most popular Pirkka Fairtrade products are flowers, bananas, coffee, juices, cocoa and chocolate. Procurement of fish products is done according to WWF Finland‟s fish guide and MSC certified suppliers. Kesko has sustainability statements for fish and shellfish, timber and palm oil and the country of origin is indicated on private label products. Finnish Pirkka products always carry the Swan label. In 2011, Kesko had 1,073 organic products in its selection. In 2011, 2,072 Pirkka products of which 70 were organic and 40 Fairtrade products. ICA is Sweden‟s top food retail outlet with nearly half of the market. ICA organic sales have more than doubled since 2007 and, in 2011, sales of ICA‟s organic store line “I love Eco” products rose by 23 percent. A total of around 20 new products were added, including around ten meat products. Products in the ICA “I love Eco” brand are certified according to the EU‟s organic criteria and sometimes also according to Swedish organic KRAV regulations. Animal-based ingredients in ICA “I love Eco” products must be approved according to KRAV, which place more stringent requirements on animal welfare than the EU.ICA‟s aim is to offer a high proportion of eco-labeled, organic and Fairtrade products and to constantly reinforce environmental awareness in the assortment processes. The range is continually expanding with environmentally sound products as well as more regional and locally produced alternatives. Coop Sweden has 21 percent of Sweden‟s retail food sales and the largest selection of sustainable foods. Coop‟s organic private label “Änglamark” is the leading trademark for organic products in Sweden. One of Coop‟s goals is that sales of sustainable products will be at least 10 percent in 2012 and sales of Fairtrade-labeled products are expected to double between 2010-2012. The relaunch of Coop Änglamark milk and other dairy products will add to their line of sustainable products. Coop is intensifying its efforts to phase out uncertified palm oil from its store brands. Promising U.S. Products The best opportunities lie in products not produced domestically, e.g., rice, some fruit and vegetables, dried fruits, nuts and wines. Other sustainably certified products showing strong growth are baby food, coffee, fresh spices, bread and food ingredients. For feed, in Sweden most buyers will only purchase RTRS soybeans. Danish feed producers have not yet taken this step but are reporting increased pressure from retailers to limit purchases to RTRS soy or to provide other sustainability certification. 19 EU-27 Sustainability Report 2012 France Sustainability Fact Sheet for U.S. Food and Agricultural Exporters General Over half of France‟s land area is devoted to agriculture and input use is high (e.g., France is the leading EU consumer of pesticides). There is also pressure to reduce green house gasses and to further protect biodiversity. In that context, agricultural producers, policy makers, and the general public consider sustainability to be a critical aspect of agriculture. The government sponsors a variety of programs that influence domestic agricultural practices and encourage food processors and retailers to adopt sustainability criteria in the production and marketing of foods Measures include tax rebates, government purchasing, a pilot environmental labeling program, and supporting the harmonization of sustainability standards. According to a study conducted by the French Environment and Energy Management Agency (ADEME) in 2010, more than half the population intuitively links sustainable development with “ecology, fighting against pollution, preserving resources, and protecting the environment.” The study revealed that while 79 percent of the French are ready to be responsible consumers and 20 percent declare themselves as eco-consumers, only four percent will translate into purchasing actions (buying fair trade and organic products, paying specific attention to the geographic origin of the products, or boycotting some products). Price premiums for certified goods are clearly a limiting factor to increasing sales in the „sustainable‟ category. French and EU organic logos are also highly visible to the public may be considered as synonymous by consumers with „sustainability‟. Government Initiatives National Policy: The Government of France has taken significant environmental measures in the past few years through two environment laws voted in 2009 and 2010. The Grenelle for the Environment proposed a wide range of objectives in all sectors of the economy. The inter-ministerial committee for sustainable development adopted a National Strategy for Sustainable Development for 2010-2013, released by the Prime Minister‟s Office. This document lists a number of strategies, including “developing a more sustainable food production,” with the following objectives: Perform organic agriculture on 60 percent of the total farmland in 2020 Food at public institutions must contain 20 percent of organic products by 2012 Have 50 percent of farms involved in environmental certification by 2012 Reduce pesticide use by 50 percent by 2018 Increase public purchases of wood products from sustainably managed forests The actions envisioned by the Government of France to reach a more sustainable development included (in parenthesis are examples of interest for agriculture): Encouraging consumption of sustainable products (e.g., developing labels, certification schemes, promoting fair trade products), Supporting the green economy and green technology (e.g., supporting renewable bioenergy development, green chemistry, and biobased products), 20 EU-27 Sustainability Report 2012 Generalizing eco-conception initiatives (e.g., those with carbon and environmental costs, supporting energy efficiency along the life cycle), Implementing tax and regulatory incentives (e.g., a reduced VAT on eco-products, expanding the scope of the environmental tax already implemented on biofuel blenders), Establishing information traceability across the entire life cycle (on GHG emissions, for example), Making public purchases exemplary (e.g., with vehicle fleet), Continuing the European regulatory and standard harmonization, Accessing safe and balanced food (supporting ecologically and socially responsible production and distribution methods contributing to protect public health, soil fertility, and water quality, such as short food supply chains and fair trade products), Reducing waste production and increasing recycling rate, Supporting companies collecting and valuing waste, Valuing the use of renewable or recycled raw materials (e.g., promoting wood for sustainably managed forests), Valuing industrial ecology and functional economy (e.g., developing short supply chains) In 2010, the French Environment and Energy Management Agency (ADEME) released a document on sustainable development. It specifically lists the organic and fair trade food labels as ways to identify sustainable products for consumers. In 2011, the Strategic Analysis Center of the Prime Minister‟s office released a report titled “Towards Sustainable Consumption.” Supporting more sustainable and more competitive agriculture is one of the various types of public support indicated in the report. Specific emphasis is given to organic agriculture (identified as preserving ecosystems, leveraging against input price volatility, reducing dangers to human health, and favoring farm profitability and rural development). Public support to organic agriculture is expected to help its development, currently constrained by consumer price premiums 23 percent, on average, for hotels, restaurant, and institution (HRI) sales. Specific Actions by the Ministry of Agriculture The Ministry of Agriculture is conducting a number of actions to make agriculture more sustainable, in order to meet the objectives set by the government. The Ecophyto 2018 program aims to reduce pesticide use by half from 2008 to 2018 and gradually prohibit the use of the most dangerous molecules from the market. The environmental certification of farms, managed by a national committee on environmental certification, is provided on a voluntary basis, and attributed to farms implementing good agricultural practices. This is validated in five different schemes, on a total of 2,000 farms, to date. The most stringent environmental certification is called “High Environmental Value” and provided by registered certification organisms. Agro-Environmental Measures (AEM) are funded by the European Union‟s rural development schemes in favor of biodiversity, water, and soil quality. In 2010, almost 6 million hectares (ha) (i.e., almost 20 percent of France‟s agricultural land) benefitted from these subsidies. The Energy Performance Program, co-funded by the European Union and France, is a tool to help reach the objective of 30 percent of farms with little energy dependence by 2013. Organic agriculture: In 2011, there were 23,000 organic farmers; farming 1 million ha (3 percent of France‟s farm land). Sales of organic products amounted to 3.4 billion Euros in 2010, 21 EU-27 Sustainability Report 2012 accounting for 2 percent of the total food market. The leading categories of products sold under this label are fruits and vegetables, grocery products, dairy products, bread, and wine. Environmental Labeling In January 2012, France‟s Ministry of Ecology and Sustainable Development released a report titled “Towards an environmental labeling for food products” (its translation in English, available here, was published in April 2012). According to the report, environmental labeling in France relies on the following: Legislative: Articles of the “Grenelle” laws of 2009 indicate that “consumers must have access to sincere, objective and comprehensive environmental information on the overall characteristics of the product/package pair” and of 2010: “from July 1 2011, a trial will be consulted for a minimum period of one year. The objective of the consumer, gradually and by any suitable method, of the carbon footprint of products and their packaging, and the consumption of natural resources or impact on natural environments that are attributable to these products throughout their life cycle.” Technical: The joint Environment and Energy Management Agency – Food Standards Agency (ADEME-AFNOR) work resulted in a methodology of good practices for environmental labeling of consumption products in 2009: BPX30-323:2009, which sets carbon dioxide emissions as the main but not unique criteria for environmental labeling, and life-cycle as the basis for calculation. Experimental national environmental labeling in 2011-2012: Its objective is to test how information is passed on throughout the entire production and distribution chain, all the way to the end consumer. It includes various parties (including NGOs) that help optimize but above all to explore different calculation methodologies, communication channels, indicators, etc. The report considers that, in order “to characterize the environmental footprints of food products, a single criterion, phase-specific (transport) indicator, such as „food miles,‟ has numerous shortcomings. In order to reflect overall sustainability, environmental labeling on agricultural and food products must favor the “life cycle” approach as well as multi-criteria environmental evaluations, while remaining aware of the limits of these methods.” It continues further that “on the French level, another project remains to be initiated, that is the coexistence of this environmental labeling scheme on food products with other distinctions such as „product grown on a farm with high environmental value,‟ logos and labels (organic agriculture, sustainable agriculture, labels certifying quality or geographic origin) and the European Ecolabel whose extension to food products is occasionally mentioned.” Overall, thirty-six food organizations (including 29 private companies) volunteered to participate in the program, on a total of 326 food products. Three indicators were labeled on the products, on average: GHG emissions, water consumption, and impact on biodiversity. Consumers were informed mainly via internet, labeling at the retail outlet, or through a smartphone application. In the end, 75 percent of the food companies want to continue environmental labeling, and 60 percent want it to expand. Private Initiatives Carrefour, which is the EU‟s leading supermarket chain, has partnered with WWF on sustainable development, has created a number of private sustainability labels including the following: 22 EU-27 Sustainability Report 2012 The Forum for Integrated Farming Respecting the Environment (FARRE) is a network of 1,000 farms certified to meet a number of good agricultural practices set by regulation (decrees published in the Official Journal) by independent certifying organizations. Certified farms obtain public support in exchange (1,000 Euros per farm). FARRE is member of the European Initiative for Sustainable Development in Agriculture (EISA). Products sourced from farms members of FARRE are labeled with “sourced from an integrated farming qualifying farm.” The leading farm categories involved in FARRE grow crops and vines. Fair Trade/Max Havelaar: In 2011, there were more than 3,000 products sold in France under this label, representing sales of 315 million Euros, mainly including coffee, cotton, cocoa, bananas, and tea. LACTALIS: This is an example in terms of incentives for suppliers and subcontractors to comply with good conduct of health and safety. Since 1999, the group established a charter of good practices, entitled "Focus on the Future," especially dedicated to milk producers. In the same logic, the company requires its suppliers of food livestock to meet the conditions of an approval process to demonstrate compliance with traceability and product quality. This case study aims to show the role that big business can play in the process of sustainable development resulting, by obligation, all actors upstream in the food chain. Ecocert products under “equitable, supportive, responsible” include cocoa, coffee, dried fruits, legumes, olive and sesame oil, quinoa, rice, rum, can sugar, vanilla, coconut, and bananas. Organic products are promoted as sustainable. Promising U.S. Products There is further opportunity for U.S. sustainable seafood and forest products. Currently, some U.S. seafood products are promoted as being from “sustainable fisheries”, and U.S. hardwoods are promoted as “produced sustainably” in France. Documented efficiency improvements (lower pesticide use) in the soybean and wheat cotton sectors would have market potential. 23 EU-27 Sustainability Report 2012 Germany Sustainability Fact Sheet for U.S. Food and Agricultural Exporters General Sustainability is an important social, economic, and political topic in Germany and the government and NGOs are active in developing national strategies, policy goals, and in some instances, regulation. However, for food marketing, there are not yet uniform standards and food retailers are driving the market through purchasing practices that require sustainability certification. Retailers and food processors are also adept at using sustainability (called Nachhaltigkeit in German) in marketing through certification logos, store brands, and advertising German consumers have long equaled sustainability with carbon emission savings but, more recently, the scope of consumer and NGO sustainability concerns has broadened to include animal welfare, environmental friendly production methods and non-GE (biotech) crops. In terms of domestic production, sustainability features prominently in biomass for bioenergy production, chocolate, cocoa, coffee, dairy products (mostly on the grounds that they either use non-biotech or regionally produced feed), fish, fruits and vegetables, cut flowers, and woods. Government Initiatives The German Government‟s National Sustainability Strategy has been in place since 2002 and a comprehensive progress report was issues in 2008. This strategy is base on four principles: 1. Inter-generation fairness 2. Quality of life 3. Social cohesion 4. International responsibility Goals include: By 2010, renewable energy was to increase to a share of 4.2 and 12.5 percent of primary energy consumption and gross electricity consumption, respectively. As both goals were reached ahead of schedule, the goals were increase to 10 and 30 percent, respectively, by 2020. Energy and raw material productivity is to double compared to 1990 and 1994, respectively. The goal is that even with higher production less energy should be consumed. In the period from 2008 to 2012 GHG emissions have to be reduced by 21 percent compared to 1990. In 2010 this goal was increased to a reduction of 40 percent by 2020. By 2015, transport of good by train has to double its share compared to 1997. Within this national strategy the German Ministry of Food, Agriculture and Consumer Protection (BMELV) has developed a 10 point plan that encompasses: 1. Combating climate change and adapting to a changing climate 2. Bioenergy and renewable resources 3. Safeguarding natural resources 4. Increasing the competitiveness of agriculture, forestry, and fishery (better education, extension, financial support of animal rearing systems with more focus on animal welfare, develop and promote international standards for sustainable agriculture 24 EU-27 Sustainability Report 2012 5. rural development and demographic change (for example supporting village development that uses a little new area as possible) 6. Food safety 7. Healthy food choices (improvement of education on nutrition) 8. sustainable consumption (education consumers about sustainable consumption, research on assessing sustainability and feasibility of sustainability labels, 9. World food security (promotion of sustainable agricultural production methods in developing countries, education of consumers against food waste in Germany) 10. Sustainability in the ministry itself (procurement of certified or recycled paper, increasing use of wood for building purposes, substituting digital videoconference for travelling, and, if travel is necessary, substituting airplanes with trains. On the margins of this strategy, German politicians have indicated that Government sustainability standards for food and feed would be desirable. Government-support for Sustainable Commodities in Other Countries In June 2012, BMELV introduced the Forum for Sustainable Cocoa (“Forum für nachhaltigen Kakao”). In this initiative, stake holders (trade, processors, standardizing organizations and NGOs) work together to promote sustainable production of cocoa for example through education farmer about more sustainable production techniques. Renewable Energy Production Germany was a forerunner on the introduction of sustainability criteria for biomass for energy production. This was prompted by pressure from NGOs to ensure that the production of bioenergy does not lead to environment damage elsewhere, e.g. through cutting down rain forest in South America and East Asia. These criteria are also applied to all feedstock irrespective of origin. Private Initiatives German food retailers are driving the market through purchasing practices that require sustainability certification. Retailers and food processors are also adept at sustainability marketing through certification logos, store brands, and advertising. Edeka, Germany‟s largest food retail chain has partnered with WWF to reach the following goals: Wood/paper/tissues: store brands (including packaging) use 100 percent recycled or FSC certified material by 2015 Fish and seafood: 100 percent sustainable sources by 2015. Store brands to be MSC certified. Palm oil: store brands to source 100 percent RSPO certified palm oil Soybeans: strive for store brands to use domestically produced feed or RTRS+gmo free/Proterra certified non-biotech soybeans Carbon emissions: Lifecycle analysis for select products Water: analysis and reduction of water use for select products/ product groups 25 EU-27 Sustainability Report 2012 Rewe, is the number two retail chain in Germany. The chain stores Rewe, Nahkauf, and Penny all belong to this group. Rewe uses the following sustainability-related labels: Organic, Blauer Engel, MSC, Fair Trade, ProPlanet Pro Planet is noteworthy becauses is a sustainability system developed for Rewe based on identifying on “hot spots”, i.e., those points in the product life cycle that have the biggest impact. Since the these vary by product, ProPlanet has developed specific labels. More details about ProPlanet‟s certification process may be found at:
Posted: 28 November 2012

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