Sep 25, 2013 • By

Sourcing: Evolution and sustainability

Improving sustainability is a continuing process – one that General Mills does not undertake alone.

Since 2010, General Mills and one of its partners – World Wildlife Fund – have worked together to improve the sustainability of our 10 priority ingredients.

Our work in this area is part of our long term sustainable sourcing strategy, which positions us to maximize economic, environmental and social value while creating long term value for shareholders, consumers, customers and other key stakeholders.

At a recent WWF sustainability conference, Steve Peterson – the director of Sourcing and Sustainability at General Mills – discussed how we’re embedding sustainability into our value chain, while addressing issues like resource scarcity through sustainable sourcing.

Here’s the video of Steve’s interview with WWF’s Betsy Hickman (her Q&A with Steve also is posted below):

How would you articulate the business case for sustainability?

Peterson: I think that sustainability for us, and for all companies, has created value in several ways. First, it reminds all of us to think about where our food comes from. In addition, in sourcing, when you get closer to the source, you get smarter. And that unlocks value.

Then the third is creating growth. Our sustainability mission is to protect and conserve the resources on which the company depends.

Is resource scarcity an issue that General Mills is addressing now?

Peterson: Food companies became accustomed to very plentiful supplies—it was never really questioned—and stable pricing. What’s happened in the last five years is that there’s been a sea change. And the way that markets signal raw material shortages is through price volatility.

That has been, quite frankly, the best way for us to get General Mills’ stakeholders serious about this. They’ve seen it – it’s not just a hypothesis. It’s actually become very real in the last number of years.

Our most iconic brand is Cheerios. And, what do we need to make Cheerios? We need oats. Beyond its health profile, oats is a crop with many sustainable attributes, such as using less herbicide, pesticide, insecticide and fertilizer than other major crops, and having a natural ability to improve soil health.

General Mills feels so strongly about making sure that oats remain a sustainable and quality crop that in 2009, the company funded a USDA initiative to promote public research on oats in order to produce a natural genetic “road map” for the crop. (See more here). So, we’re doing all that we can to be a catalyst for a global breeding program on oats to make that a sustainable crop.

How long has General Mills been active in sustainability issues?

Peterson: In 2005, we began as most companies do – working within our own four walls. So, we established targets to reduce the environmental footprint within our own factories, working on water, energy, waste, and greenhouse gas, and have made great progress there.

Being a farm kid from Minnesota, the game is ‘fish where the fish are.’ Really, the sustainability game is upstream from us. Two-thirds of our total product carbon footprint resides upstream with our suppliers within our packaging ingredients suppliers and, primarily, within agriculture.

Ninety-nine percent of our water footprint resides there. That’s why our focus in the next couple of years is around supplier sustainability and sourcing sustainability.

What opportunities are there?

Peterson: One, I think that the human population is becoming increasingly aware that sustainability is not a fad, but it is a true trend. But, we need to articulate the science in a way that is simple and understandable to the lay person. I think that there is an urgency to do this.

I really think that, a key to this is with the farmers. I actually own a farm in Minnesota and I believe, on my own farm, or with any farmer I speak to, that to be more sustainable means that they’re more profitable. And that is what we’re proving with our pilots today within the field to market framework on wheat and oats in Canada and soon, sugar beets within the United States.

So I am encouraged that that value proposition is there for growers. And so there is a self-serving interest around sustainability that will ultimately make it sustainable.

What advice would give to companies just starting out on their sustainability journey?

Peterson: First, I think you have to start within your own four walls, as we did. I think it’s very tangible to understand the footprint within your own factories, because there is a pretty strong payback. We’ve saved tens of millions of dollars by reducing our environmental footprint since 2005 – that’s pretty compelling. Second, as you evolve, it’s helpful to understand what the entire footprint is of your product line.

That will tell you about the “hot spots,” where opportunities are. I think for most food companies, they’ll find that is upstream with their suppliers. Third step is then to convince your internal stakeholders that working with your suppliers is going to be linked to your own future. Fourth, you need the right expertise. You need somebody who understands agriculture and understands sustainability.

Lastly, it’s constancy of purpose. For example, we have three primary strategies around sourcing and sustainability that we’ve established in the last two years. I think we are going to be on those same three work streams for the next ten years.

So, just don’t talk, but do it. Use your influence to make meaningful change and then invite others along on the journey with you. So, it’s not about being prideful.

It’s about learning by doing, not learning by talking.

Editor’s note: Today General Mills announced a commitment to sustainably source 100 percent of its 10 priority ingredients by 2020. Learn more in this press release.