cameron bruett - our shared journey of continuous improvement
TRANSCRIPT
14th Annual Stakeholders Summit May 6, 2015
Kansas City, Missouri
SUSTAINABILITY Our Shared Journey of
Continuous Improvement
FOUNDED
1 9 5 0 s B R A Z I L
IPO
2 0 0 7 B R A Z I L
200,000 T E A M M E M B E R S
W O R L D W I D E
307 PRODUCTION
CONTINENTS
UNITS ON 5
2014 Revenues: $50 Billion+
J B S S . A . At a G l a n c e
1 st
L A R G E S T
GLOBAL PROD UC ER
B E E F & L A M B
L A R G E S T
GLOBAL CATTLE FEEDER
1 st
L A R G E S T
GLOBAL LEATHER PROCESSOR
1 st
L A R G E S T
GLOBAL CHICKEN PRODUCER
1 st
L A R G E S T
P O R K P R O D U C E R
3 rd
G l o b a l M a r ke t L e a d e r
Rank Global Food Companies 2013 2012 2011
1 Nestle SA 70,044 66,923 66,700
2 JBS SA 43,216 38,902 37,024
3 PepsiCo 34,534 33,400 31,921
4 Tyson Foods Inc 34,374 33,055 32,266
5 Unilever NV 30,278 31,079 31,733
6 Mondelez International 29,469 29,172 29,753
7 Danone SA 28,290 26,834 26,898
8 General Mills Inc 17,909 17,774 16,657
9 ConAgra Foods Inc 17,702 15,426 13,367
10 Kraft Foods Group Inc 15,537 15,553 15,649
Top Global Food Companies By Sales ($ Million)
Source: Bloomberg
R e c o g n i z e d G L O B A L L e a d e r
“SUSTAINABILITY”
The Consumer’s View
The Consumer’s View
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I F We Don’ t Def ine I t…
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I F We Don’ t Def ine I t…
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I F We Don’ t Def ine I t…
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Perspect ive Mat ters
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Disconnect f rom Modern
Agr icu l tu re
There are over 313,000,000 people living in the
United States. Of that population, less than 1%
claim farming as an occupation (and about
2% actually live on farms).
“We’re inside of
corporate
boardrooms across the
country HELPING
major food retailers
implement policies to
eliminate gestation
crates from their supply
chains.”
Paul Shapiro
Vice President
Farm Animal Protection
HSUS
Act iv i s t P ressure
“We’re inside of
corporate
boardrooms across the
country HELPING
major food retailers
implement policies to
eliminate gestation
crates from their supply
chains.”
Paul Shapiro
Vice President
Farm Animal Protection
HSUS
Act iv i s t P ressure
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I n c r e a s e d C o n s u m e r A c c e s s
t o “ I n f o r m a t i o n ? ”
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I want local and natural because it’s better for the environment and my health (But there is no health benefit difference and those systems cannot be scaled
to meet the environmental and food security challenges of future generations)
I don’t want food from conventional, BIG AG because it’s bad for the environment and my health (But modern agriculture represents the most efficient, safest, affordable, seasonally-independent and globally dispersed food supply in the history of mankind)
Consumer Confus ion
“Both humanity’s capacity to innovate and the incentives to innovate are greater today than at any other time in history.”
- Ben Bernanke,
Former Chairman of the U.S. Federal Reserve
Innovat ion i s the Key –
But Can We Use I t?
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“GOOD FOOD” Vs .
What Exact ly?
A Poor Place From Which To Begin A Conversation
19 Small; But MIGHTY influence
48% under 35 years old
62% Female
46% Parents Income WELL above average
C o n c e r n s o f t h e F u l l
S t o m a c h
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Perspect ive Mat ters
C o m m e r c i a l R e s p o n s e =
“ S u s t a i n a b l e S o u r c i n g ”
• McDonald’s sourcing “verified sustainable beef” beginning in 2016
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• WALMART announced “standard of excellence program” that will touch at least 50% of the cattle industry by the close of 2016.
• Beef pilot program that includes environmental criteria and 15% of their beef supply will be sourced under this criteria by 2023.
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C o m m e r c i a l R e s p o n s e =
“ S u s t a i n a b l e S o u r c i n g ”
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U . S . G o v e r n m e n t R e s p o n s e
Production intensity and emission intensity are inversely
related though some promote less intense systems as more
“sustainable.”
There is no agreed upon definition for sustainability nor
a common methodology by which to measure
sustainable outcomes.
Excludes lean meat; Allows for
moderate alcohol consumption
2050 GLOBAL TRENDS
• Global Income
• Global Population
• Global Consumption
3 Billion in Middle Class Growth
• Currently consume 1.5x Planet’s Available Resources
• By 2050, Will Need 70% More Food
• Consuming 3x the Planet’s Available Resources
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Cl imat ic Changes &
Impacts on Agr icu l tu re
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Water , Water and LESS
Water
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HOW DO WE MEET THE
CHALLENGE?
U.S . Beef Sus ta inabi l i ty :
The Real S to ry
U.S . Beef Sus ta inabi l i ty :
The Real S to ry
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From 1959 to 2009, U.S. Pork Producers Significantly Reduced Their Environmental Impact
U.S . Pork Sus ta inabi l i ty : 5 0 Y e a r s o f I m p r o v e m e n t
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I t ’ s A l l A b o u t t h e E n v i r o n m e n t ,
R i g h t ?
Many people assume
that the term sustainability only relates
to “preserving the
environment.” This is not true.
Sustainability is a much
broader discipline that involves improving short-
and long-term
profitability by managing
economic, societal, and environmental factors to
meet the challenges of
tomorrow.
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Responsibly meeting the needs of the present while improving the ability of future generations to responsibly meet their own needs…
SUSTAINABIL I TY
S imply De f ined
L i m i t T h e S c o p e ; L i m i t
O p p o r t u n i t y
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SOCIAL PILLAR: Addressing animal welfare, worker safety, human rights, community involvement, property rights, beef safety, beef quality, consumer trust and food waste.
ECONOMIC PILLAR: Addressing profitability, shareholder return, capital investment, food affordability, license to operate, efficiency and innovation.
ENVIRONMENTAL PILLAR: Addressing water, air quality, deforestation, conservation, land management, waste, energy, greenhouse gas emissions and biodiversity.
Limited Focus If your sole focus is on one pillar or only on environmental metrics on the farm, you negate the shared responsibility of and the shared opportunities for the entire global beef value chain.
This holistic approach to sustainability forces stakeholders to
view the beef value chain comprehensively rather than
focusing on their “issue du jour.”
34 34 Source: Schlange & Co. Copyright BASF
Re
leva
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f is
su
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tak
eh
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ers
’ pe
rsp
ec
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1 2 3 2,5 1,5
2
1
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2,5
1,5 medium
high
A
C
B
D
E
A
C
B
D
A
C B D
E F
A
C
B D
G
E
Relevance of issues from the company’s perspective
Economic issues
A Business ethics & business integrity B Community investment C Company transparency D Compliance with law E Local sourcing
Product responsibility issues A Consumer health & safety B Consumer information & education C Technology in agriculture
D Value chain transparency (traceability)
Social issues
A Animal health & welfare B Human rights C Impact on community D Labor rights E Workers’ health & safety
Environmental issues
A Biodiversity B Emissions to air C Emissions to water D Energy use E Land management F Waste G Water use
M A T E R I A L I T Y : R a n k i n g t h e
H O T S P O T S
Global Reporting Initiative (GRI) Categories
These are the traditional categories most people associate with
sustainability
Global Reporting Initiative (GRI) Categories
The social pillar is critically important.
Within this pillar arguably lies the
greatest opportunity to demonstrate and align
our values with those of the consumer.
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• All systems can be sustainable • Continuous Improvement • Consumer choice • Convey sustainable message to consumer • Consumer wants license to feel
good about products already enjoy
• Successfully intensified production over time BUT
• Aging producer base • Supply constraints • Producing out-of-spec • Regulatory pressure • $$ barriers to entry • Technology an option?
Sustainable Challenge – More with Less?
Sustainable Protein? • 7.18 B Global Consumers. 9+ B by 2050; • 2B in the middle class; 4.9B by 2030; • Consumption of animal protein to
increase; • 99% want choice; • Food evangelists: 22% • 1% vocal radical –reduce choice.
• Want to make supply chain claims; • Make sustainable supply chain demands
on immediate supplier; • React to 1% pressure.
• Packer/Processor sits between retailer & producer;
• Animal Welfare responsibility; • Food safety responsibility; • Labor, Worker Safety responsibility; • Technology user; • Low margin operator.
• Make demands on retailers and farm operations – land management
• Cannot influence 7.18 B consumers but influence more than 1%
• Cannot influence the millions of family farmers and growers;
• Can leverage vulnerabilities of large entities in middle;
• Make unrealistic demands that prevent us from meeting the global
challenge
Global Consumers
Retailers
Packers/Processors/Integrators
NGOs/Activists
Producers/Growers/Feeders • Focus of many supply chain demands; • Environmental responsibility; • Technology user; • Used by corporations as best message
vehicle for consumers.
C u r r e n t P l a y i n g F i e l d – R i s k o r
O p p o r t u n i t y
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GRSB Has Chosen A
Di f fe ren t Approach
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M a n y K n i g h t s ; N o H e a d
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Original NGO paradigm: Convince large European and U.S. multinationals to make market-based decisions to adopt eco-labels, standards or certifications as a means to address environmental concerns like climate change and sustainability; and socioeconomic issues such as trading conditions for farmers and slave labor.
R o u n d t a b l e s a s a M e a n s f o r M a r ke t Tra n s f o r m a t i o n
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A H i s t o r y o f R o u n d t a b l e s
1988 (Europe) – Coffee, Cocoa, Sugar, Tea, Bananas, etc.
2006 (Netherlands) – Global Standard, certification audit, 5 Principles, 90+ indicators
2004 (Europe) – Global Standard, Certification audit, 8 Principles, 130+ indicators
2008 (Europe) – Global Standard, Certification audit, 6 Principles, 55+ indicators
2005 (Europe) – Standard System, Self-assessment, audits, 6 Principles, 45 criteria
2013 (Switzerland) – Global Definition, No Global Standard or Certification, 5 Principles, 45 criteria, 0 Global Indicators???
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Ro u n d t a b l e s = M a r ke t i n g
Original Roundtable paradigm: Corporations, in their zeal to proclaim their product offerings as “sustainable,” would leverage Roundtable certifications, seals, standards, etc. to market their products as environmentally friendly and socially responsible.
Have we lost focus on our ultimate goal in the process?
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W h at A r e We C r e at i n g ?
Competitive Niche?
Or Precompetitive Norm?
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S u s t a i n a b l e B a s e l i n e P r e c o m p e t i t i v e V s . D i f f e r e n t i a t i o n
Commercial Differentiation Opportunities for Innovation &
Product Differentiation beyond GRSB baseline
Precompetitive Sustainable Beef Demonstrated Commitment & Performance
based on GRSB Principles & Criteria
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A n E n t i r e S U S TA I N A B L E M E AT C A S E R a t h e r t h a n S u s t a i n a b l e & N o t S u s t a i n a b l e
T r a d e - O f f s
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A r e We M o v i n g t h e C u r ve ?
Innovators will readily adopt sustainability
measures based on market opportunity
But how do we get average to low-performing producers to improve
performance? With 100 KPIs required for certification in a “no premium”
context?
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A r e We M e e t i n g t h e Key C h a l l e n g e s ?
“Warren Buffett found it 'extraordinary' that academics studied such things. They studied what was measurable, rather than what was meaningful. 'As a friend said to him, ‘To a man with a hammer, everything looks like a nail.’ ”
Roger Lowenstein, Buffett: The Making of an American Capitalist
“If a measurement matters at all, it is because it must have some conceivable effect on decisions and behavior. If we can’t identify a decision that could be affected by a proposed measurement and how it could change those decisions, then the measurement simply has no value.”
Douglas W. Hubbard
“We tend to OVERVALUE the things we can measure and UNDERVALUE the things we cannot.”
John Hayes
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1 o u t o f 3 C a l o r i e s WA S T E D
1,160 Pounds of Annual Average Food Loss for a U.S. Family of Four
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N o O n e Wa n t s t o “ C e r t i f y Po ve r t y ”
By some estimates, less than HALF of certified sustainable agricultural products are SOLD as certified
sustainable products.
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S i m p l i c i t y & Fo c u s
Focus on Performance not Prescriptive Practices
Promote Innovation over Compliance
Communicate, Communicate & Communicate
Prioritize the Challenges & Create & Measure Impact
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Globa l Roundtab le fo r
Sus ta inab le Bee f
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The Global Roundtable for Sustainable
Beef (GRSB) is a global, multi-stakeholder
initiative with a mission to
advance continuous
improvement in the
sustainability of the global
beef value chain through
leadership, science and
multi-stakeholder
engagement and collaboration.
Who We Are
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“A top-down, corporate fascist regime controlling every entity in the beef supply chain, including and specifically targeting cow-calf producers….”
Who We Are NOT
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VIS ION
We envision a world in which all aspects of the beef value chain are
environmentally sound, socially responsible and economically viable.
CIV
IL S
OC
IETY
C
OM
MER
CE
& P
RO
CES
SIN
G
RET
AIL
PR
OD
UC
ER
OB
SER
VIN
G
RO
UN
DTA
BLE
S
Dr. Judith Capper Dr. Holly Gibbs Dr. Kate Varela
Jack Hanson, Willow Creek Ranch Tom Hogan, Snappy Jack Cattle Dr. Sandra Jepcott
Dr. Laurie Marker, Elandsvreugde Mt. Brisbane Pastoral Company
PR
OD
UC
ER
M U LT I - S TA K E H O L D E R M E M B E R S H I P
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W h at A r e We Tr y i n g t o A c c o m p l i s h ?
A balanced, science-based approach to beef sustainability that
empowers rather than punishes and stimulates innovation and adoption
of best practices.
Global Roundtable established
2011 2012
Legal Registration
GRSB
Mgmt Structure & TWG
operational
2010 2013 2014
Principles & Criteria
Finalized
Articles & Bylaws Revised
for new governance
structure
2015
GRSB TIMELINE
PLANET, PEOPLE, ANIMALS & PROGRESS
Release of FIRST GLOBAL
DEFINITION for Sustainable Beef
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2 0 1 4 G l o b a l C o n f e r e n c e o n S u s t a i n a b l e B e e f
The 2014 Global Conference on Sustainable Beef was held November 2-
5, 2014 in São Paulo, Brazil.
Nearly 300 participants
from 21 different Nations attended.
96%+ approval rate from
membership.
Adoption of Global Definition
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Globa l De f in i t ion in
Summary
We define sustainable beef as a socially responsible, environmentally sound and economically viable product
that prioritizes Planet, People, Animals and Progress.
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F ive P r inc ip les fo r
Sus ta inab le Bee f
GRSB has worked hard to
combat the notion that
technology CANNOT be a
part of the solution to the
sustainability challenge.
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L o c a l S o l u t i o n s ;
G l o b a l I m p a c t
Global
Definition
Regional
Application
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R e c o g n i z i n g & C e l e b r a t i n g P r o g r e s s
PLANET, PEOPLE, ANIMALS & PROGRESS
Promoting Consistency & Transparency in GRSB’s
Recognition of Successful Regional Applications of the Global
Definition
Regional Roundtables remain empowered to achieve sustainable
outcomes leveraging GRSB Principles & Criteria based on their
system’s specific challenges
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USRSB Membership (65)
Blythe Family Farms, LLC
Great Plains Cattle Feeders
Tejas Feeders Ltd.
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Responsibly meeting the needs of the present while improving the ability of future generations to responsibly meet their own needs…
S t a y i n g F o c u s e d o n t h e S u s t a i n a b l e C h a l l e n g e
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These wonderful people could be our customers, but they are not our sole customers
S u s t a i n a b l e P r o d u c t & S u s t a i n a b l e S y s t e m s f o r A l l
These wonderful people also need to eat. Both groups deserve sustainable choices more than sustainable marketing.
Will the decisions we make as sustainable beef roundtables make sustainable beef accessible to all or promote the
creation of another unscalable niche?
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www.grsbeef.org
www.jbssa.com