David VisherCalifornia Program Manager

David@foodalliance.org

Sustainability?

EnvironmentCommunity

Economy

A sustainable food system . . .

Hot Topic: toxic pesticides• USEPA: $11 billion annually on 5 billion pounds of

active ingredients -- 77% for use in agriculture

• USEPA: Agriculture responsible for 70% of surface water pollution

• Consumers Union: 40 common pesticides a direct threat to human health

• USDA: Pesticide residues detected in 61% of fruits and vegetables.

Hot Topic: global warming

• Agriculture is a source of methane (animals), nitrous oxide (tillage/fertilizer) and carbon dioxide (fossil fuels, land degradation)

• The average meal is estimated to travel anywhere from 1500-2500 miles from farm to plate.

• Transportation of food also requires energy expenditures for food processing, packaging, and refrigeration.

Hot Topic: social justice

• Over 2 million farmworkers in US -- 75% earn less than $10,000/year

• Farm work is one of the most dangerous occupations in US

• Very few farmworkers have health coverage

Hot Topics: wildlife habitat

• Agricultural expansion is the primary cause of habitat loss and fragmentation throughout the world.

• Agriculture is implicated in the decline of 40% of endangered species.

Hot Topics: family farms

• Consolidation in industry and thin margins create pressure to ‘get big or get out’

• “Agriculture-of-the-middle” refers to a disappearing sector of mid-scale farms/ranches (account for over 80% of U.S. farmland) who are unable to successfully market bulk commodities or sell food directly to consumers.

Sustainable Agriculture

Family Farms

Labor Conditions

Animal Welfare

Toxicity – Pesticides, etc

Antibiotics & Hormones

Soil and Water Conservation

Genetic Engineering

Locally Grown Foods

Wildlife Habitat

KP’s Vision for a Healthy Food System:

“Kaiser Permanente aspires to improve the health of our members, employees, our communities and the environment by increasing access to fresh, healthy food in and around KP facilities. We will do so in a manner that promotes agricultural practices that are ecologically sound, economically viable, culturally appropriate and socially responsible.”

Industry Takes Action

A Shift in Consumer Values

Value• Quality• Convenience• Price

New Values• Health• Community• Environmental

Stewardship• Authenticity

“People want to know what lies behind a brand and the extent to which its values are aligned with their own… Today, the issue is what a brand says about someone, as a badge indicative of the individual’s values and view of the world.”

Chris Pomfret, Unilever Marketing ExecutiveKP’s National Food Purchasing and Labeling Guidelines: RFI/RFP

Consumers Today

Eco-labels

SustainableSociallyResponsible

ReducedPesticides

AnimalFriendly

Ecosystem Friendly

Eco-Labels are Credible When They Are:• Meaningful and verifiable• Consistent and clear• Transparent• Independent and free from conflict of interest• Open to public comment

Consumer’s Unionwww.greenerchoices.org/eco-labels/

• 1st party claim – Promise or affidavit

• 2nd party claim – Endorsement with affidavit or inspection

• 3rd party claim – Inspection by a neutral party

Product claims & compliance mechanisms:

Food Alliance creates market incentives for socially and environmentally responsible agricultural practices and educates business leaders and other food system stakeholders on the benefits of sustainable agriculture.

Food Alliance

Food AllianceOperates a third-party certification program and a market development program to connect sustainable growers with food businesses.

• Sets standards for sustainable agriculture• Verifies compliance with standards• Helps connect sellers and buyers of certified

products

Food Alliance in a Snapshot

• More than 300 farms and ranches in

• 5.6 million acres of range and farm land

• Nearly 20 food processing and distribution facilities

• $100 million of FA certified products sold in 2007

Food Alliance CertifiedBusinesses that demonstrate their compliance with our standards are granted the right to use the eco-label on certified products.

• Raise animals without synthetic hormones and non-therapeutic antibiotics

• Provide healthy and humane treatment of animals

• Raise crops without genetically modified organisms (GMOs)

• Reduce pesticides usage and toxicity• Conserve soil and water resources• Preserve and protect wildlife habitat• Provide safe and fair working conditions• Commit to continuous improvement of

these sustainable practices

Food Alliance certifies farms and ranches that:

• Use Food Alliance Certified™ ingredients from sustainable farms and ranches• Provide a safe and fair work environment• Conserve water and energy resources • Reduce waste through reuse and recycling• Create natural products considering purity and nutritional value• Ensure quality control and food safety• Commit to continuous improvement of these sustainable practices

Food Alliance certifies processors and distributors that:

Certification Process1. Voluntary application

2. On-site inspection by independent auditor

3. Continuous improvement goals recorded

4. Inspector writes detailed report on audit results

5. Food Alliance shares determination with client

6. If necessary, corrective actions required and verified

7. Certification granted or denied

Who’s getting certified?

• Individual farms & ranches• Producer groups, Co-ops• Processors/Manufacturers

www.foodalliance.org

Farms and ranches pay annual fees based on the previous year’s gross sales of the products certified:

Up to $175,000 .5% of sales (or base price of $400, whichever is greater)Up to $300,000 Add .25% on sales over $175,000Over $300,000 Add .10% on sales over $300,000

Food processors and manufacturers pay inspection costs plus annual fees on net sales of certified products:

Up to $500,000 .4% of salesUp to $2 million Add .2% on sales over $500,000Up to $50 million Add .04% on sales over $2 millionOver $50 million Add .02% on sales over $50 million

What does certification cost?

People buy products – not labels

Lesson Learned:

Certification verifies and substantiates claims

Lesson Learned:

• Traceability (What is the source?)

• Transparency (What are the standards?)

• Accountability (Have the standards been met?)

Certification is not for everyone

Lesson Learned:

Certification is not just about price premiums

Lesson Learned:

Certification is a tool that supports your brand

and your marketing strategies

Lesson Learned:

• Label their products• Get marketing assistance• Invest in promotional and educational materials• Create strong, ‘high-touch’ relationships with

customers• Talk about their certification and what it means

Producers benefit most when they:

• Meet customer product specifications• Manage environmental risks • Manage regulatory risks • Manage marketing risk – “stay on the shelf”• Improve community relations • Protect and enhance brands• Differentiate products • Increase customer loyalty• Gain access to new markets• Gain access to contracts• Increase sales• Feel good by “doing the right thing”

Other Benefits:

Why choose certification?

• Differentiate products and enter new markets

• Brand the company as an industry leader

• Address customer needs and values

• Demonstrate company values