Transitioning away from cost center: the challenge of capturing the upside of sustainability 

The food industry is under immense regulatory and market pressure to demonstrate immediate action on carbon reduction. Expectations have evolved for sustainability data to match the level of rigor, assurance and comparability of financial data, and this current environment has led to many food companies taking a compliance-based approach to sustainability.

The challenge for food companies in relying on a compliance-only approach, however, is that sustainability then appears as a cost center for the organization. Huge resource amounts are spent measuring impact, tracking down data internally and from suppliers, reporting to customers and regulatory bodies, with little to show in return.

For Kerry, the limitations of this approach were clear, and the team recognized that with more efficient tools to measure, collaborate on reduction, and communicate accurate data, that they could transform sustainability into a competitive advantage.

Bringing sustainability into innovation

“Nutrition can't be nutrition if we don't consider the sustainability impact or the impact of that food on people, but also on the planet and society. So really sustainable nutrition is Kerry's vision and our purpose,” Aoife shares.

The Kerry team needed science-based sustainability data that they could use to support their vision, in the same way that they leverage science and digital tools to support nutrition, taste and texture in their products. 

To automatically generate sustainability insights, Kerry used two methods for product footprinting via HowGood’s Latis platform:

1. Entering basic ingredient data into HowGood’s platform, including material names, inclusion percentages, and sourcing details if available.
2. HowGood's Latis platform enabled flexibility for Kerry to include verified primary data relevant to their direct milk pool. This flexibility allowed an increased depth of accuracy to the carbon information for dairy ingredients produced using Kerry's milk pool in the south-west of Ireland.

“We needed to know and demonstrate the science of the environmental impact, and partnering with HowGood provides us with consistently updated data. We know that the HowGood research team is constantly scanning the latest data and publications so that the database is up-to-date,” says Aoife. She shares that it's worked well to bring HowGood’s expertise into their product innovation, demonstrated especially with the recent launch of their Smug oat and dairy hybrid product into the UK market. 

“We’ve determined that using sustainable product design from the start is the fastest, most comprehensive and most resource-efficient way to improve the sustainability impact of products, and the digital tools we use help us to quantify that impact around nutrition and sustainability,” says Aoife.

Aiofe adds, “We're always thinking about how to quantify sustainability impacts. We know that the food system contributes over one third of global greenhouse gas emissions, among other indicators like water. In order to really assess our products’ impact from a carbon perspective, we now have our partnership with HowGood.”

“HowGood enables us to think about product innovation with sustainability by design, thinking about the impact from the very beginning.” - Aoife Marie Murphy, Senior Manager of Sustainable Nutrition at Kerry

‍

B2B: Leveraging an end-to-end sustainability approach for ROI 

Kerry now has cross-functional sustainability processes embedded from early product development and innovation stages through to marketing and B2B sales strategies. Their holistic approach to sustainability allows them to transparently serve customers and consumers in the most scrutinized markets in the world. 

CASE STUDY: CHOCOLATE MILKSHAKE PRODUCT

In providing ingredient solutions to some of the world’s largest CPG brands, Kerry is constantly looking for opportunities to support their customers’ own sustainability goals. 

Looking at the end-to-end journey for product development and sales, a chocolate milkshake product can illuminate the myriad opportunities to leverage sustainability for differentiation.

Product Development and Sourcing‍

Kerry’s team started with entering the product formulation into HowGood’s Latis platform, instantly seeing the breakdown of each ingredient impact within the whole product. “There's a really nice visual with red/amber/green status here, where you can easily see which ingredients within your formulation are contributing most of the impact,” Aoife states.

‍

‍

“This stage allows us to make decisions around sourcing, because sourcing can really impact the sustainability here. Looking at the skim milk within the milkshake, you can see right away that sourcing that milk from different locations will really change the carbon impact. We’re able to look at the overall formulation at the same time as our various sourcing options, so that we can dynamically change the recipe to try to improve the impact. This instant feedback is so valuable for innovating and reformulating products.”

‍

When selling into Kerry’s customers, the ingredient-level insights are essential. Although Kerry’s ingredient solutions often make up a small percentage of their customers’ overall product weight, they are a large percentage of the total impact. Making improvements to their ingredients has an outsized impact on their customers being able to reduce their own carbon footprints – all of which is visible in Latis.

‍

Sales Enablement and Marketing Claims

For the Kerry team, utilizing the platform for product development allows them to also instantly discover marketing and sales opportunities to use later in their go to market journey. 

At any point in the product development process, Kerry’s team can generate a Sustainability Scorecard, including the product carbon footprint, industry benchmarking on any of HowGood’s eight impact metrics, as well as eligible marketing claims.

This data and insight enables accurate, transparent communication on sustainability impacts to their customers, and their customers’ consumers. It also makes clear how seamless their sustainability reporting will be when requests are made by customers. 

‍

“This holistic approach to sustainable nutrition innovation allows us to create products that are healthier for consumers, while at the same time optimizing the formulation and sourcing to develop a sustainable product and obtain the data we need for reporting and claim substantiation,” says Aoife.

‍

B2C: From product development to marketing claims

In addition to its B2B value, Kerry’s partnership with HowGood enables them to seamlessly carry their sustainability strategies through from product design to marketing claims on their own brands, as well.

‍

‍

CASE STUDY: SMUG PRODUCT LINE

Product Development and Sourcing

“Our Smug dairy and oat products deliver the best of both worlds in terms of health and environmental perspectives,” she shares. “We know dairy is a nutritious product, but it also can be high in saturated fat and it doesn't have fiber in it. So if we blend it with oat, which lacks protein, it complements the dairy, and the oat adds fiber creating a nutritionally complete product from an environmental perspective.”

“When we look at the science and data behind Smug, the dairy has quite a high carbon footprint. But with HowGood, we can now compare the sourcing of that dairy to bring the footprint down, and also drive a more positive impact by blending it with oat, which helps further reduce the carbon footprint,” says Aoife. “This is the kind of science-backed strategy that HowGood’s sustainability software supports.”

With Howgood, Kerry was able to assess all of their suppliers and raw materials for the Smug product line. They used this data to then influence material selection, determine the best sourcing locations for each material, and decide on levels of inclusion for each. This process provided a streamlined way for them to create the Smug product while keeping costs down on the manufacturing side.

‍

Supplier Engagement

Having tools for engaging and collaborating with their suppliers was also of utmost importance to ensure accurate details on sourcing, locations and the breakdown on component specification. This streamlined, direct supplier communication allowed Kerry to generate robust and highly-granular data for sustainability analysis.

“Once we had all of that, along with final formulations and procurement secured, we were then able to evaluate our products to see which claims could be made, what we could say about our products on-pack, and what would be motivating to consumers.” Patrick O’Driscoll, Kerry’s Head of Dairy Research and Development, shares.‍

‍
Go to Market Strategy and Marketing Claims

When the Kerry team had completed their product formulation and testing, they turned to HowGood again for 3rd party claim validation, completed within the platform through direct review and communication with HowGood’s research and legal teams.

“When we’d completed the evaluation and validation of our claims, we began thinking of how to communicate this on pack in a really transparent way, but also in compliance with green claims, codes and directives, etc. The legal compliance perspective on it was really important to us.”

“We now have carbon comparative logos on all our packs, either on side-of-pack or back-of-pack, along with supporting text so consumers understand what we've done, how we've done it and what we're comparing it to. It also directs people to our website with a full description of our methodology, so that what we’re sharing is really transparent,” Patrick says.

‍

‍

‍

Positioning sustainability as a competitive advantage

“By positioning ourselves as the partner of choice around innovation, co-creation, and sustainable design, we can really help to accelerate sustainability impact for our customers,” says Aoife. “A customer might have a product that's very near the start of the spectrum of nutrition and sustainability. They're beginning their journey, and we can help guide and inform them along that journey. That's our approach.”

Kerry has successfully moved from a compliance-based perspective to using sustainability as a centerpiece in their commercial strategy. Patrick says, “It's something that consumers and customers are asking for more and more, but even aside from that, we believe as a company that it’s really important for everyone to leverage sustainability throughout the whole value chain.”

“We all have a responsibility working towards Net Zero,” he states. “We all have our own company targets, measurements and quantification to help make better decisions. But it’s a system, and collaboration is required, and we need information from people who need information from us. We're all working towards the same goals, so it's important that everyone across the full food value chain is trying to leverage sustainability together.”