Sustainable Products

Food and Agriculture

The environmental impacts of the food and agriculture industries – both positive and negative – are as numerous as they are varied. Production agriculture requires large amounts of water, energy and fertilizers during the growing stage. Bringing agricultural products to market also requires significant amounts of fuel, natural gas and electricity to run manufacturing, refrigeration and other systems. Additionally, oil polymers are used in abundance for packaging and generate huge volumes of disposable packaging and waste.

As the largest grocery retailer in the United States, and with operations in 14 markets, we see a responsibility and an opportunity to promote more sustainable practices in the food and agriculture industries. Through our Food and Agriculture Network, we are working to reduce food miles, increase the efficiency of our produce shipments and encourage best management practices in farming and food processing across the supply chain to ultimately bring more sustainable products to our shelves.

This effort requires improvement in overall eco-efficiency ranging from reducing agro-chemical usage to improving water and soil management. Additionally, beyond the farming sector we intend to stimulate widespread environmental improvement throughout the food supply chain. For example, in the United States, it is estimated that produce travels an average distance of 1,500 miles from farms to the homes of our customers. An unintended societal consequence of this geographic concentration is that many rural communities with rich agricultural traditions are in rapid economic decline. Acknowledging this, one of our primary focuses is reducing “food miles.” For our buying team, we have introduced a “Food Miles Calculator,” which allows our buyers to enter information on each supplier and product, determine product pick-up locations and select which of our 38 food distribution centers the product will reach. This ultimately allows the calculator to compute the total food miles.

To further reduce food miles, we’re buying more produce locally, especially items like potatoes, tomatoes and peaches. We are also working with state departments of agriculture and suppliers to develop growing areas for products such as corn (Mississippi) and cilantro (Southern Florida) in areas where those products were not previously farmed. Not only will these efforts save food miles, but they will provide our customers with fresher products.

This initiative will serve to enhance our long-term commitment to reinvigorate the economic vitality of rural communities. Additionally, it creates meaningful economic options for farmers in production areas which are under pressure of rapid urbanization.

Packing our trucks more efficiently is another way to significantly reduce food miles and waste. Recently we established the West Coast Consolidation Center in California. The center replaces less-than-full truckload produce shipments with full truckloads. We estimate this saves almost 5 million food miles each year, and dramatically reduces the number of trucks required to supply the same amount of product.

Outside the United States, we take pride in the fact that at our ASDA stores, approximately 90 percent of the fresh food that can be sourced in the United Kingdom is sourced there. Beyond reducing food miles in the United Kingdom, we are working to reduce our carbon footprint by selling products that have been produced using renewable energy, such as Respectful Eggs. Respectful Eggs are free range eggs produced with half the carbon footprint of standard free range eggs. This is done by exclusively using wind and solar power sources on the farm, as well as locally grown and produced feed for the hens. In our Brazil stores, we have over 400 SKUs (Stock Keeping Units) of organics in categories such as juice, meat, poultry, fruits and vegetables. Our goal is to have at least one organic product for each food category in Brazil by the end of 2007.

Providing our customers with affordable access to items they want – such as organically grown produce and fair trade coffee – is another focus of our efforts. While the sale of organic and fair trade products are an important initiative for us, our main focus is making a broad range of familiar products more sustainable and accessible to everyone. Therefore, our priority is to ensure that we provide fair trade and organic products that meet the same high quality standards that all of our other merchandise meets.

Today, we are also working to introduce a supplier scorecard, which we aim to launch in 2008. The scorecard will require our food suppliers to respond to a manufacturing, farm and/or supply chain questionnaire, depending upon the nature of their business. The answers on each scorecard will generate a relative score for key sustainability metrics, such as water use, energy use and waste. Our buyers will be able to use the scorecard when making purchasing decisions.

We believe that measuring and incentivizing suppliers will stimulate innovation and help them achieve dramatic improvements in their environmental performance. This, in turn, will contribute to a widespread shift in the way food is grown, processed and distributed.

As we continue to meet the growing demand for food that is farmed, processed and distributed in ways that protect our natural resources and communities, we remain committed to ensuring that those products meet our standards for consistent, high-quality food – from the farm to the dinner table.

Facts and Figures

In the United States, it is estimated that produce travels an average distance of 1,500 miles from farms to the homes of our customers.