Content provided by Pet Industry Sustainability Coalition (PISC)
Sustainability and the pet industry: it’s a juxtaposition you might not have heard just a few years ago. Now, a high percentage of pet companies tout themselves as sustainable. So is sustainability in the pet industry just another buzzword or passing fad?
Meeting the needs of the present without compromising the future has transitioned from a nice-to-do to a must-do for many business sectors in recent years, and we are now seeing this shift occur in the pet industry. With more households joining the ranks of loving pet owners, the pet industry is beginning to receive the same level of scrutiny that discerning consumers put on industries such as food and common household commodities.
Leading the change is the millennial generation, which has now not only become the largest population in the U.S., but also the largest group of pet owners. According to the Petfood Industry.com article “Baby Boomers Step Aside: Millennials Now Own More Pets,” 57 percent of millennial households own pets. The article also said that this group also favors the term ‘green’ as desirable when compared to other age brackets.
The general consumer population is also on board with adopting a green way of life, with 67 percent rating the term ‘eco-friendly’ as desirable and 62 percent agreeing that climate change is primarily driven by human activities, according to TheBuzzOnBuzzwords_SpecialReportEcoPulse2015.
So let’s question why, in a study by the Massachusetts Institute of Technology, did 70 percent of companies still say they do not see the business case for adopting sustainable practices despite mounting evidence of the financial benefits? And what is the business case for sustainability specifically within the pet industry?
This question, when directed mainly at areas of cost savings or revenue generation, remains difficult to answer due to how broadly sustainability can be interpreted. However, sustainability is about much more than business opportunity, as it can also address supply chain risk and resource availability. (Note: This can be commonly misconstrued as efforts to reduce resource use year-over-year. It is important to note that sustainability measures resource use compared to resource availability, while yearly improvements only measure resource efficiency, also known as eco-efficiency.)
For the pet industry, sustainable practices can have a particularly beneficial impact on the increasing challenges of ingredient sourcing with concerns spanning environmental impact, social responsibility and economic viability. Keeping this in mind, let’s look at the top two supply chain and resource risk factors when it comes to ingredient sourcing for pet foods.
Protein Is Expensive
Based on research done by ACES, the first challenge is that “protein is expensive, both financially and environmentally, so the choice of protein source and amount in the diet are particularly important.” Often, pet foods are manufactured to appeal to owners and include very high levels of protein, sometimes 20 percent more than pets need.
Since pets require nutrients rather than ingredients, there is both an economic and an environmental savings in adjusting the volumes included or protein selected. Consider, for example, including plant proteins where possible as these have a lower fiscal and environmental cost. However, this may require public education to ensure consumers are aware that pets do not need the highest levels of protein and specifically meat protein available.
Transparency Is Needed
A second growing challenge is the need to develop transparent supply chains that highlight the true source and cost of pet food ingredients. Without this, businesses are unable to detect and mitigate against failures that may result in recalls or missteps that negatively impact customers. This in turn degrades brand value, revenue and margins.
Nestlé is leading the charge and has developed a Responsible Sourcing Traceability Operations process in order to develop traceable ingredient profiles back to the farm level. This comprehensive level of supply chain understanding is a great way to avoid unexpected supply disruptions or harmful missteps that degrade your brand value.
It is imperative to evaluate all ingredients based on a combined measurement of actual and opportunity cost. This ensures that companies are factoring in resource scarcity, supply disruptions, impending cost increases and consumer trust when measuring the true value or cost of an ingredient.
The pet industry is changing. More and more consumers are demanding transparency and ingredient traceability for the products that they purchase. This, in addition to resource scarcity and the social concern for limiting climate change, ensures that it is a question of when, not if, sustainability guidelines will be applied to the pet industry.
Development of voluntary sustainability guidelines is already underway. The World Wildlife Fund is leading a working group charged with outlining a uniform definition of sustainability within the pet industry. The Global Roundtable for Sustainable Beef is a great example of the efforts being made within the protein industry. Now the question is, what is your sustainability roadmap?