Decarbonizing grocery - Deepstash
Decarbonizing grocery

Decarbonizing grocery

mckinsey.com

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Cutting back on carbon emissions is a universal mission

Cutting back on carbon emissions is a universal mission

Unless people reduce CO2, methane, and other greenhouse-gas (GHG) emissions, sea levels will rise, and disastrous weather events may happen.

The food system accounts for more than 30 percent of global GHG emissions, and the grocery sector has a unique opportunity to become the driving force for the decar­bon­ization of the entire food system while saving costs.

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Sustainable grocery

The pressure from multiple stakeholders to make grocery sustainable is growing.

  • 37 percent of European consumers deeply care about sustainability. Many consumers already pay more for sustainable options that are also beneficial to themselves. 
  • Sustainable employers stand a better chance to attract, retain and inspire purpose-driven people. 

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Regulations

  • Europe has set targets for reducing GHG emissions to achieve net zero by 2050. 
  • Internationally, Glasgow's UN Climate Change Conference had the first concrete methane reduction pledges.
  • In New Zealand, the government plans to charge farmers for the methane emissions from the animals they keep.
  • In the Netherlands, plans to slash emissions associated with livestock farming gave rise to nationwide protests by farmers.

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Most emissions are outside the direct control of grocers

Grocers can create transparency around current GHG emissions along the entire value chain.

  • Scope 1. Direct emissions from grocers' operations.
  • Scope 2. Emissions from the generation of electricity and heat that grocers purchase
  • Scope 3. Emission from agriculture, food processing, waste, and transport upstream, as well as transportation, consumption, and waste downstream.

Scope 1 and 2 emissions account for about 7% of the total, while 93% of emissions are outside the grocer's direct control.

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Decarbonizing grocery operations (Scope 1 and 2)

Decarbonizing grocery operations (Scope 1 and 2)

Energy consumption in stores can be reduced by 30–50 percent by modernising lighting, refrigeration, heating, ventila­tion, air condi­tioning, and cooling alone.

Saving energy in stores can fall into four categories:

  1. net-zero stores
  2. net-zero warehouses
  3. net-zero fleets
  4. sustainable manufacturing (for vertically integrated grocers)

Each category has levers that are less and more disruptive. A potentially powerful lever is redesigning the grocer's network of distribution centres to shorten routes. 

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Decarbonizing food production and consumption (scope 3)

The bulk of grocery emissions occur during production and consumption.

The biggest challenges is the key role dairy and meat play in the Western diet. The global cattle population is among the top three for GHG-emissions.

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Five strategies to reduce scope 3 GHG emissions

Five strategies to reduce scope 3 GHG emissions

  1. Provide more sustainable options, including both branded and private-label (PL) products. Substituting beef with plant-based alternatives can lead to a 90 percent reduction in emissions. Additional assortment-related levers include refillable packaging, products sold without any packaging, and reduced package size.
  2. Create transparency for consumers. all PL products in a grocer’s assortment should have labels specifying their impact on consumer health and the environment.
  3. Collaborate with farmers.
  4. Collaborate with small and medium-size suppliers
  5. Set ambitious targets for major CPG companies.

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Making it happen

Making it happen

Transforming the global food system will take many years. Grocers are well advised to embark on their decarbonization journeys today and position themselves at the forefront of the trans­formation by pursuing initiatives across three areas:

  • Get the basics in place. Increase transparency around key sustaina­bility metrics and implement a scope 1 and 2 abatement strategy.
  • Develop a compelling sustainability value proposition to consumers.
  • Explore opportunities for disruptive business building.

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CURATED BY

ralcal

Commercial art gallery manager

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