Is Plant-Based Fish the New Vegan Burger?

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As much as 55 percent of our oceans are fished industrially, which is equivalent to four times the total land mass used for agriculture. Meanwhile, warmer waters due to climate change are causing sharp declines in fishery populations, National Geographic reports.

These facts, coupled with recent findings that climate change and overfishing could increase the mercury levels in fish, make for a guilt-ridden pescatarian experience. These bleak environmental factors pose stark economic implications because the global fishing industry accounted for $362 billion of economic output as of 2016, according to a State of World Fisheries report.

The poor state of industrial fishing, our oceans, and the associated health risks together are sobering. Plus, deciphering whether to eat wild-caught fish versus farmed fish adds another level of complexity as this dilemma brings up questions around ecosystem impact, carbon footprints and plastics.

The silver lining, however, is that more companies are seeking less extractive solutions that rely on a different supply chain to bring a whole new kind of fish—made from plant-based ingredients—to the earth’s growing population.

The latest in food tech: Plant-based fish

Companies working to create the ultimate plant-based fish include New Wave Foods, a plant-based shrimp company; Good Catch Foods, a company that produces a plant-based tuna; and, of course, Impossible Foods, the company known for its vegan bloody burger.

Impossible Foods in particular is on a rapid growth trajectory; note its recent announcement that the company will expand its production. This is a timely decision as during 2018, the nascent plant based food category is projected to grow at a rate of almost 25 percent over the next several years. And the company hopes to have enough plant-based options to make animal protein unnecessary by 2035.

Currently, Good Catch Foods’ products are available in some New York City Whole Foods locations. New Wave Foods’ shrimp are available at select restaurants in San Francisco and New York City. Impossible Foods has yet to release a plant-based fish option. 

If the plant-based fish segment is to grow as quickly and with the level of impact that the plant-based meat sector has, plant-based fish companies need to win the hearts of non-environmentalists and non-vegans, i.e., everyday consumers.

Mastering taste and texture key to acceptance of plant-based fish alternatives

Companies focused on developing plant-based fish alternatives realize they have to research and innovate quickly if they are to offer products that can sway consumers with flavor and texture. 

“The only way we can succeed,” Impossible Foods CEO Pat Brown told The New York Times, “is to make fish from plants that is more delicious than the fish that’s strip-mined from the ocean.”

Impossible Foods is ramping up research and even recently announced that it created a plant-based broth with a similar taste to one made from anchovies, Food & Wine reported. Plus, the FDA’s approval of the Impossible Burger’s “plant blood” is an exciting step for the company if it can get closer to achieving a plant-based fish formula that has the mouthfeel of a fish. The trick is heme, the molecule that creates a taste and texture that makes our brain experience the animalistic aspect of the meatless burger, and hopefully soon, fishless fish.

Texture and flavor have been important to Good Catch as well. It spent two years launching its canned tuna product line, according to VegWorld Magazine. The company’s plant-based tuna is comprised of algae, beans and legumes to achieve a fish texture similar to canned tuna.

“In terms of texture, that was probably the biggest feat. Diversifying the proteins enabled us to create the texture with six different beans,” Chad Sarno, the co-founder of Good Catch, told Marketwatch.

Communicating the benefits present challenges in growing the plant-based fish market

Consumers see fish as a healthy source of Omega 3s, vitamin D and minerals. Hence their motivation to switch from fish to a plant-based alternative for health reasons isn’t as obvious as switching from cattle-based beef to plant-based burgers.

“A lot of people will simply say if you eat meat, you’re increasing your risk of cancer,” Tom Rees, who studies the packaged food industry for the market research firm Euromonitor International, told The New York Times. “There isn’t an equivalent of that for fish.”

Even though fish is known as a healthy animal protein and there is a debate about the functional benefits of plant-based Omega 3s versus Omega 3s from fish, plant-based fish companies do have valid functional benefits to tout. They include foods rich in protein, as well as the absence of mercury and other toxins which in the end, are an improvement for everyday health.

Interest in a plant-based lifestyle bodes well for plant-based fish

The nascent plant-based fish segment, which currently makes up less than one percent of the total plant-based meat market, is poised for growth. Sales of plant-based food are expected to surpass $13 trillion by 2025. Plus, millennials with children are more likely to adopt plant-based diets, which could lead to a new generation that is more mindful and willing to adopt a plant-based lifestyle, Forbes reports.

Investors’ interest in plant-based fish companies also signals a new tide in plant-based fish’s status. Good Catch secured $8.7 million in 2018, while Chipotle invested in Sophie’s Kitchen, a vegan fish company, at the beginning of 2019.

Since four out of 10 pounds of animal products consumed globally are fish, the business opportunity to reinvent the fish industry cannot be overlooked. The race is on as companies vie for the ultimate product to make Fishless Friday the new Meatless Monday.

Image credit: Good Catch Foods

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Why It’s Time for Brands to Breathe Life into Sustainability

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Sustainability isn’t novel anymore. 

For the last 20+ years, I’ve seen many brands do things that were “good for the environment” seemingly as a public relations exercise. In an era of greenwashing, a creek cleanup or basic recycling program could wash away the stain of using millions of tons of crude oil each year to make everyday products. Parents could feel good about putting sunscreen on their baby from a recyclable bottle, while unaware that the sunscreen itself was derived from crude oil — and so was the bottle.

Real change was slow going. Why? Companies didn’t know how to make their products more sustainable and the technology to do so often didn’t exist. Nobody talked about where their products came from, and when the beginning of life story was grungy and filled with fossil fuels, it’s no surprise companies didn’t want to shout it from the rooftops. More importantly, brands weren’t convinced consumers cared or would pay for sustainable products. That made it risky — and hard work. And that ended the conversation.

How times have changed. Now, sustainability is a real, non-hype priority for global consumers, and products like plant-based meat and compostable sneakers have become popular. Consumers want to know where their products come from, and having renewable, naturally-derived or recycled ingredients is increasingly a “must-have.” Ninety percent of Millennials say they’ll pay more for products made from sustainable ingredients — or are “made clean” — and more than half of consumers say they’d pay more for sustainable products designed to be reused or recycled.

The problem is clear: consumer demand for sustainability has outpaced what the industry is supplying. But it’s not because making more sustainable products is too hard, or too expensive, or requires technological wizardry. Biotechnology today can transform renewable sources like plants or agricultural waste into the chemicals and ingredients that make up our everyday products. By swapping out crude oil, natural gas and coal — the traditional inputs — for renewable sources, we can often reduce the greenhouse gas emissions related to making our everyday products by more than 50 percent.

Best of all, today’s technologies are delivering products that are identical (and often superior) in terms of quality and experience. For example, materials company Novamont in 2018 announced a partnership with the United Kingdom grocer Co-op to produce 60 million plastic grocery bags with Novamont’s compostable replacements for single-use plastics. Additionally, manufacturing company Aquafil is transforming discarded nylon into Econyl regenerated nylon that is exactly the same as new nylon and fully recyclable. Major fashion brands including Prada, and Burberry  are partnering with Aquafil to create luxury branded products like bags and coats.

With big brands making headlines for adopting natural ingredients and improving supply chains — and consumers loving it — why aren’t brands doubling and tripling down on sustainability? There’s still plenty of talk — and not enough action. [MS2]  

To be fair, overhauling an entire supply chain isn’t easy, particularly with billions of capital sunk into manufacturing assets than don’t deliver sustainability profiles in line with what is demanded today, and there’s no one size fits all solution. Corporate inertia and risk-aversion remain some of the most powerful forces in the world. Yet the research shows that it’s actually risker to NOT embrace sustainability. Sustainability wins in the marketplace. Deutsche-Bank analyzed more than 2,000 empirical studies since the 1970s and found that about 90 percent of ESG investments deliver superior returns.

And we’re seeing a new generation of successful companies with sustainability at the core of the business – and they are being rewarded by the consumer. Consider the shoe company Allbirds — which sold more than a million pairs of shoes made from naturally-sourced fibers and ingredients in their first two years after launching. The brand has become synonymous with sustainability — and was recently valued at over $1 billion. Companies like Allbirds are a new force that mainstream brands must respond to. 

The best way for established brands to stay ahead of these insurgent sustainability leaders and seize this burgeoning market? Get involved — and breathe life into sustainability initiatives.

Initiatives like Project EFFECTIVE are bringing together major brands like H&M and Vaude to make fibers and plastics from plant-based ingredients, which in turn make up everyday products like clothing, carpet and outdoor gear. These meetings of the minds to share ideas and overcome obstacles (logistical, cultural, financial) mark real progress taking sustainability from a charming niche to an economic powerhouse. Critically, these discussions also help brands hold each other (and themselves) accountable for getting it done. 

The technology is here today for brands to begin slashing the oil consumed to make their ingredients and take command of the surging — and real — market for sustainable products. It’s up to us to band together and deliver.

Image credit: Allbirds/Facebook

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Bonterra Digs In, Reduces Carbon with Regenerative Farming

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Regenerative farming is gaining traction as it emerges as a viable option for those in agriculture who see economic opportunities in doing their part to address the climate crisis. One company embracing regenerative farming is California’s Bonterra Organic Vineyards, which recently concluded that this practice stores more carbon in the soil than conventional farming methods.

Bonterra is aligned with other wineries that are exploring a switch to organic practices, reducing their water footprint and using other forms of packaging in the name of sustainability and efficiency.

TriplePundit recently interviewed Elizabeth Drake, Bonterra’s regenerative development manager, to find out more about Bonterra’s shift to regenerative farming as well as to discuss the winemaker’s other sustainable practices.

TriplePundit: Tell us about Bonterra’s farming practices.

Elizabeth Drake: At Bonterra, we use regenerative farming on nearly 1,000 acres in Mendocino County, California, which goes above and beyond requirements for organic farming. Our 960 acres of farmed vineyards are certified organic, with more than 250 of these acres also certified as “biodynamic,” a certification requiring many regenerative practices. We also have preserved nearly 1,000 acres as wildlands.

Bonterra first embraced organic farming practices or grapevines beginning in 1987, with the first “made with organic grapes” wine debuting in 1993. With total annual case production nearing a half million nine-liter cases, the Bonterra brand has grown 69 percent since 2012. Today, Bonterra’s products include the Organically Farmed Collection, the Biodynamically Farmed Collection and the Elysian Collection Merlot, featuring wine made from hand-selected lots organically farmed.

3p: How does regenerative farming benefit wineries such as yours?

ED: Today, regenerative farming includes many new advances in agriculture, like research into integrated pest management and cover cropping methods, improvements in irrigation technology, among others. These advances help increase soil fertility, drought resilience and biodiversity levels, while supporting soil’s natural ability to reintegrate carbon from the atmosphere.

3p: What are the next steps for Bonterra?

​​​​​​​ED: We are examining methods to conduct additional soil sampling to analyze vineyard carbon storage and carbon fluxes over longer periods than those covered by our initial study. Ultimately, we are interested in continuing to better understand and share findings detailing how vineyard management choices contribute to soil health and help combat climate change, in hopes that we can inspire others to join us in adopting regenerative practices.

3p: How are you going to promote such regenerative practices?

​​​​​​​ED: We continue to work with grape growers in California to offer information and support as they transition to organic grape growing. In doing so, Bonterra is building a network of collaborative farms and helping to spread climate-smart, organically farmed acreage in the state. Bonterra believes strongly that regenerative farming practices offer compelling solutions for healthy soils, improved vine and grape quality, and a positive path forward for the farming community and climate health.

Image credit: Bonterra/Facebook

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Spotlight on Unilever as Employee Activism Confronts PR Firms on U.S. Immigration Policy

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Last year, Unilever pushed back against hate speech and other bad online behavior by leveraging its advertising dollars against Facebook and other social media platforms. However, algorithm-driven ad buys only address part of the challenge for brand reputation. Recent developments in employee activism indicate that public concern over the U.S. president’s immigration policies is rippling out to encompass advertising and public relations firms, too.

Ad agencies and public relations firms feel the 'Wayfair Effect'

Employee activism is growing in force. As an outcome of increasing public concern over the treatment of immigrants during the Donald Trump administration, workers are beginning to question the business ties their employers have formed with federal agencies and vendors involved in providing immigration services.

One recent incident involved the home furnishings company Wayfair, whose employees literally took to the streets after seeing their concerns over immigration policy handled dismissively by executives.

The wave of activism has now grown to include advertising and public relations agencies. In one high-profile episode earlier this year, reports surfaced that employees at Edelman refused to work on the firm’s new business with Geo Group, a for-profit prison company frequently associated with reports of inhumane treatment at immigrant detention facilities. Shortly after, Edelman severed the relationship with Geo.

Another leading public relations firm, Ogilvy, demonstrates the potential risk of failing to address employee concerns. Faced with similar employee concerns over a contract with U.S. Customs and Border Protection, Ogilvy stood by its client during a closed-door meeting with employees on July 7. Weeks later, employees continued to voice their concerns to the media, and the issue is still simmering.

The trade publication DigiDay summed up the Ogilvy situation in a wider context on July 29:

“The internal turmoil at Ogilvy over its contract with the Customs and Border Protection has meant new questions for agencies—and is turning into a test of how the business is run," wrote Kristina Monllos of DigiDay. "Agencies are dealing with a new market reality that affects agency culture, employees and how agencies do business.”

A CPG giant under the microscope

Unilever has long had a relationship with Ogilvy, and so far, the firm’s internal conflicts have not appeared to have an impact on its business with Unilever. However, others are beginning to notice.

One example is the well-known brand reputation activist Shannon Coulter. Last week, Coulter drew attention to Unilever as a client of the agency Vayner Media, which has been taking heat for its business with the popular fitness companies Equinox and SoulCycle. SoulCycle and Vayner were caught in the crossfire when news surfaced that one of the fitness company’s investors, Stephen Ross, recently hosted a high-dollar fund raiser for President Trump. (The luxury health club company, Equinox, has also been under the same scrutiny.)

Coulter highlighted the connection in a tweet dated August 7. She wrote:

“Given that SoulCycle's chair Stephen M. Ross is an investor in your @VaynerMedia are you concerned the consumer backlash he's facing over a Trump fundraiser may come to the att'n of big Vayner clients like Johnson & Johnson, Unilever or Chase?”

Unilever puts the business community on notice

Unilever has already positioned itself for a proactive response. Last year’s notice to social media companies over both hate speech and “fake news” was just the beginning. This year, Unilever is taking on advertising agencies and public relations firms.

The company built its case in a speech this summer at the 2019 Cannes Lions International Festival of Creativity by Unilever CEO Alan Jope, who took aim at a practice he dubbed “woke-washing.”

Also known as “purpose-washing,” woke-washing refers to brands that adopt advertising campaigns that make grand claims about improving the world, but fail to take any meaningful action. Interpreted more generally, purpose-washing may also refer to campaigns that gloss over controversial aspects of a brand’s activities.

In his remarks, Jope drew a picture of an industry at a crossroads:

"Woke-washing is beginning to infect our industry," he said. "It’s polluting purpose. It’s putting in peril the very thing which offers us the opportunity to help tackle many of the world’s issues. What’s more, it threatens to further destroy trust in our industry, when it’s already in short supply.”

Unilever reduced its reliance on external ad agencies and PR firms several years ago and began taking more of this work in-house as a cost-cutting move. Recent events also vindicate that strategy as a way to limit the company's exposure to potentially toxic business relationships. In the context of rising employee activism, additional changes in Unilever's relationships with advertising agencies and public relations firms could be in the works.

Unilever hinted as much in June. In a press release describing the Cannes remarks, Unilever stressed that Jope “called on agencies to reject campaign briefs from brands that don’t ‘walk the talk’ on purpose.” Somewhat ominously, Jope also promised that “agencies with a track record of purpose-washing won’t work on Unilever brands.”

Global corporations like Unilever have long formed their relationships with professional services firms including those in communications, advertising, and even legal based on their reputation and quality of work delivered to other clients, in other industries, regardless of how some (or even many) citizens feel about the outcome of those relationships. For example, an apparel company would engage with a public relations firm that has done controversial work on behalf of an energy company that had a spotty record on human rights.

But those types of relationships are now becoming examined more closely, as we have seen with what has been going on with Edelman and Oglivy. Will we see a future where a company shies away from future engagements with a public relations agency, advertising agency or law firm due to prior projects that could push employees to speak out publicly against such a relationship? We cannot say for certain, but we’re entering a brave new world—and Unilever may just be a trailblazer.

Join us at 3BL Forum: Brands Taking Stands – What’s Next, at MGM National Harbor, just outside Washington, D.C., on October 29-30, 2019. The two-day event will continue our newly established tradition of bringing corporate leaders together on a fast-paced main stage, keenly focused on the ‘why’ and ‘how’ behind their thinking as we navigate a rapidly changing business environment. Receive a 25 percent discount using this code PUNDIT2019AUGUST when you register here during the month of August, 2019.

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Supply Chain Sustainability and Technology Offer Answers to IPCC Report

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Yesterday, we discussed some of the high-level findings issued in the Special Report on Climate Change and Land by the U.N. Intergovernmental Panel on Climate Change (IPCC), which focused on how the rise in global temperatures, along with increasing pressure on the agricultural system, together are putting food security at risk worldwide.

Today, we’ll dive into how a rethink of what we eat, harnessing the best possible technology, and strategic investments in the supply chain together can help make the global food and agriculture sectors more sustainable before the world falls into crisis.

By investing in such changes, food companies can ensure their long-term viability, while taking a stand on sustainability, as startups have with meat alternatives—one multinational, in fact, has even focused on mint farmers in its supply chain.

Developing delicious plant-based foods

Let’s start with what might be the most contentious topic out of the report for some: moving toward a plant-based diet.

Scientists generally agree that approximately 33 percent of arable land is now devoted to crops that will be used for animal feed. On top of that statistic, farmed animals produce half of the world’s methane emissions. And livestock such as cattle and lamb are particularly inefficient, because these animals need lots of space to graze, and in nations such as Brazil, that land is often space that used to be covered with forests.

“Shifting to a plant-based diet would be a significant catalyst for combating climate change," said Andre Laperrière, executive director of Global Open Data for Agriculture and Nutrition (GODAN), in an emailed statement to TriplePundit. 

One of the best examples that showcases this shift is Impossible Foods, which, for more than a decade, has been finding ways to turn plant-based ingredients into meat alternatives. This upstart's secret: Heme, an essential molecule found in every living plant and animal, which is what makes meat taste like meat.

According to the company, one Impossible Burger (instead of a burger made from beef) uses 96 percent less land and 87 percent less water and produces 89 percent fewer GHG emissions.

And it’s not just burgers. Impossible Foods’ plant-based options, in addition to other brands that make similar products, can be used to replace meat on your chili cheese fries, in your meat-less meatballs, in your tacos and your empanadas  . . . the list goes on and on.

Supply Chain Sustainability: M&Ms without deforestation

In another example: We all love chocolate. But churning all those cacao pods into sweets is wreaking havoc on the world’s forests. As part of its Cocoa for Generations plan, Mars says it is creating a deforestation-free global cocoa supply chain for such iconic sweets as M&Ms, Twix and Snickers.

To date, the global food giant claims it has GPS-mapped 24 percent of its global cocoa supply chain to the farm level. Mars also claims to have made significant progress in tracing the cocoa it sources to a country of origin via its first-tier direct suppliers, second-tier farmer groups and, finally, to the farmer level. By 2025, Mars says it plans to map all of the countries where it sources cocoa, including Cote d’Ivoire and Ghana (where nearly 65 percent of the world’s cocoa is grown), as well as Indonesia, Brazil, Cameroon and Ecuador.

Mars insists that it is also advancing partnerships with cocoa suppliers, governments and civil society partners who share a common goal of preserving forests for the future, and are committed to accelerate progress by working only with cocoa suppliers who can be accountable to meet the milestones laid out in the company’s long-term cocoa plan.

Teaching new farming skills to take on climate change

Climate change is also threatening one of the world’s most beloved beverages: tea. To that end, Unilever, the world’s biggest tea packer with brands such as Lipton, has committed to sustainably source 100 percent of its tea, including loose tea, by 2020.

A key partner in its efforts for more than a decade has been the Rainforest Alliance, with whom it worked to develop local indicators for sustainable tea production in Kenya. In 2007, Kericho, Unilever’s largest tea estate in Kenya, was the first tea farm to achieve Rainforest Alliance certification. Certification means that farmers and companies have met the standards for efficient farm management, soil erosion, waste production and wildlife habitat protection, among others.

Today, Rainforest Alliance-certified tea accounts for around 20 percent of the world’s tea production, but Unilever says it is working to increase that by supporting suppliers in 14 countries in Africa and Asia to train smallholder farmers so they can achieve farm certification. One of the company’s longest-running partnerships is with the Kenya Tea Development Agency and the Sustainable Trade Initiative through which it has enabled 86,000 farmersincluding around 42,000 women—to train at Farmer Field Schools for guidance on how to share best agricultural practices, increase yields, improve quality, and improve their health and nutrition.

The best is yet to come—and it must

Of course, there are many other examples of companies and organizations doing their part to mitigate their impact on climate change that could be added to those above. And there must be more, together with concerted government action.

As Aparajita Bhalla of the Rainforest Alliance expressed in a statement emailed to TriplePundit: “The work has already started. We need to keep moving toward a more sustainable agriculture system and reap the climate benefits such a system would provide.”

Join us at 3BL Forum: Brands Taking Stands – What’s Next, at MGM National Harbor, just outside Washington, D.C., on October 29-30, 2019. The two-day event will continue our newly established tradition of bringing corporate leaders together on a fast-paced main stage, keenly focused on the ‘why’ and ‘how’ behind their thinking as we navigate a rapidly changing business environment. Receive a 25 percent discount using this code PUNDIT2019AUGUST when you register here during the month of August, 2019.

Image credit: Impossible Foods

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As Trade Wars Loom, J.C. Penney Stands Up for Women and Girls

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President Donald Trump may have “saved Christmas,” but many retailers are still on edge, even if it appears that the White House, for now, has listened to their fears.

Top brands are preparing for a consumer backlash sparked by the Trump administration’s trade wars and tariff policies, which are exerting upward pressure on prices at retail stores. Retailers are especially vulnerable, so they have been pushing back, with limited success. However, J.C. Penney has adopted a strategy that may have an impact. It involves taking a stand for a particular subset of consumers—namely, women and girls.

Consumer brands are feeling the squeeze

Until recent months, ordinary consumers have been somewhat insulated from the impacts of White House trade policies. A widely criticized 2018 tariff on imported solar panels, for example, has been counterbalanced by favorable state-level policies, among other factors.

Manufacturers also began warning of higher prices when the Trump administration imposed tariffs on imported steel and aluminum last year. However, those effects take some time to trickle through the supply chain.

Retailers are much more vulnerable. They began to step up their warnings in May of this year, after new tariffs were imposed and the president alluded to another new tariff list in the coming months.

Walmart CFO Brett Biggs told reporters in May that “increased tariffs will lead to increased prices for our customers,” the Associated Press reported. By June, Macy’s and J.C. Penney also joined hundreds of brands and manufacturers outlining their case against the president’s trade policies.

Disproportionate impact on women and girls

J.C. Penney drew attention to the impact on women, girls and families in a formal letter to the Office of United States Trade Representative dated June 17.

Retail Dive was among the many trade publications taking note of the letter. It outlined how the addition of new tariffs would “hurt Penney's core customer: middle-class females who shop for their families on a ‘marginally’ higher household income than the U.S. median.”

So far, coverage of the letter has been largely confined to the trade press. One exception is CBS News, which noted that “of the 19 items the retailer listed as ‘priority items’ hit by the tariffs, 13 are women's and girl's apparel.” The list includes everything from women’s sweaters and tank tops to underwear, sleepwear and footwear.

Working women at risk

The letter itself minces no words. Writing on behalf of J.C. Penney, attorney David Spooner emphasizes the impact on women shoppers:

“The Administration’s proposed tax increase disproportionately hits women’s and girls’ apparel, but this understates the impact on women. Women often do the shopping for their families, and so feel it acutely when the government increases taxes on basic household items…Increasing taxes on boy’s shoes, kitchen appliances, sheets and blankets and curtains, and hundreds of other basic clothing items and home goods, will hurt all moms who don’t have inexhaustible disposable income. It will force them to make tough choices.”

Left unsaid is the impact on women who lose their jobs as a result of brick-and-mortar store closures, though that impact looms large behind Spooner’s words.

Women have long dominated employment in the retail sector, but the rise of e-commerce has introduced a new dynamic. As brick-and-mortar fades from the picture, warehouse and delivery worked—characterized by a male workforce—is rising.

By 2017, analysts were already noting that women were losing jobs in retail while men were gaining. The Trump administration tariffs may accelerate that trend.

Analysts have been warning that retailers are especially vulnerable to the new tariffs. One estimate puts 12,000 stores at risk for closure this year. That estimate appears to be on target. Last month, CNBC reported that Coresight Research’s running list of store closures has topped 7,000 in 2019. 

That figure has been offset by slightly more than 3,000 new retail stores so far this year. Nevertheless, the number of closures is set to exceed, by a large margin, the record high of 8,139 listed by Coresight in 2017.

J.C. Penney’s plans will add to the list. Earlier this year, the retailer announced the planned closure of 18 department stores and 9 home furnishing stores slated for 2019. That’s a far cry from the total of 146 stores Penney closed in 2017 and 2018. Nevertheless, additional closures are not out of the question for 2020 and beyond.

Fasten your seat belts

With a new round of tariffs set to take place this September—in advance of the holiday shopping season—analysts are already warning of more trouble for retailers. On August 6, UBS observed that apparel, footwear, electronics and toys are “rather elastic,” making it more likely that consumers will resist price increases.

J.C. Penney, for one, appears to have a strategy for ramping up its case against the tariffs. The company’s June 19 letter includes a stinging reference to a beloved children’s book:

“Indeed, List 4 includes a proposed tariff on Christmas ornaments. For goodness sakes, a tax on Christmas ornaments? One wouldn’t think the Administration would seek to emulate the Grinch, who left little Cindy-Lou Who with walls devoid of ornaments and ‘nothing but hooks and some wire.’”

With its emphasis on women, girls, families and Christmas, J.C. Penney has zeroed in on areas where the Trump administration is perceived to be vulnerable.

That conversation has already caught the eye of the trade press. It would not take much to move the issue into the mainstream of both social media and conventional media as well.

Join us at 3BL Forum: Brands Taking Stands – What’s Next, at MGM National Harbor, just outside Washington, D.C., on October 29-30, 2019. The two-day event will continue our newly established tradition of bringing corporate leaders together on a fast-paced main stage, keenly focused on the ‘why’ and ‘how’ behind their thinking as we navigate a rapidly changing business environment. Receive a 25 percent discount using this code PUNDIT2019AUGUST when you register here during the month of August, 2019.

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These Companies Are Now Responding to the IPCC Report Findings

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By now, you’ve likely read about the Special Report on Climate Change and Landreleased last week by the U.N. Intergovernmental Panel on Climate Change (IPCC). The report highlights how the rise in global temperatures, linked to increasing pressures on fertile soil, risks jeopardizing food security for the Planet. That is planet with a capital P, meaning everyone.

And everyone—governments, companies, farmers and consumers—has a responsibility to help mitigate the pending crisis headed toward us, according to the report. 

If you didn’t read the full 1,200-page report, here is a recap: More than 100 scientists looked at 7,000 studies to understand how human impacts on land are causing greenhouse gas emissions, how climate change is affecting our ability to produce food, and how changing what we do on farms and in forests can help fight climate change. They found that farming, forestry and other human land use is responsible for 23 percent of global greenhouse gas emissions and that keeping global warming under 2 degrees Celsius will only happen if we reduce those emissions.

Do more using less land—and do so, sustainability

Like any good U.N. report, this one is not shy to offer recommendations. At the top of the authors’ list: Countries must commit to sustainable land use to help limit greenhouse gas emissions before it is too late.

The authors put out a strong call for greater use of new, more efficient, and sustainable agriculture technologies and methods capable of producing more food with less land, particularly food that is resistant to extreme weather conditions such as drought and flooding.

They called on the global community—with a keen eye toward food producers and retailers—to reduce food waste.They urged greater efforts to protect ecosystems that are already rich in carbon, like mangrove forests, rainforests and peatlands, and for more efforts at reforestation. And they confirmed the recommendations we have heard from numerous others: Western countries must do more to replace, or at least partially shift, their high-meat diets with plant-based alternatives.

“This report really underscores the importance and urgency of lands,” Will Turner, senior vice president of global strategies at the nonprofit Conservation International, told Fast Company. “What we do to protect and restore land this generation will affect whether our children, and those they share the planet with, are going to suffer. . . . We’re making some progress on managing lands and climate change generally, but we’re making incremental progress against an exponential problem."

But wait, there is hope in the IPCC report

Before you click to the next article, wait! It’s not all doom and gloom. While the scale of change must accelerate quickly, there are more and more examples every day of businesses working with nonprofit organizations and researchers to address the challenges identified in the report. We offer a few examples that will hopefully spawn many more in the weeks, months and years ahead.

Reducing food waste

According to ReFEDa collaboration of businesses, nonprofits and government leaders committed to reducing U.S. food waste—every year, American consumers, businesses and farms spend $218 billion growing, processing, transporting and disposing food that is never eaten. More than 50 million tons of it are typically sent to landfills. Ten million tons are discarded or left unharvested on farms. Altogether, food waste consumes 18 percent of cropland and 21 percent of landfill volume.

Where to start? Why not with one of the world’s largest retailers: Walmart. It has long been aiming for zero waste—including food waste—in its operations in Canada, Japan, the United Kingdom and the United States. In 2019, Walmart Canada formally committed to achieve zero food waste by 2025.

The retailer’s strategy includes strengthening its forecasting and ordering tools and training employees on how to better care for food and manage it at the end of shelf life. Walmart has also created a customized field-to-store network for highly perishable products, which is designed to reduce days in transit. In 2019, Walmart says it had 90 million fewer wasted units in its fresh departments in the United States as compared to the year prior.

Walmart is also jumping on the “ugly” fruit and veggie bandwagon at its Asda stores in the United Kingdom where, in 2019, it sold more than a million boxes of ugly produce, avoiding 1.5 million pounds of waste.

If food is no longer edible, Walmart says it will work to convert it to animal feed, compost or energy.

Using technology to improve crop yields

Illumina, a San Diego-based company that provides  sequencing and array-based solutions for analysis of genetic variation and function, is working to address the challenge of feeding the global population. Through the use of its microarray and next-generation sequencing technologies, it is helping farmers identify the genetic markers linked to desirable traits, informing cultivation.

The company has started the Illumina Greater Good Sequencing Grant Program to help researchers around the world. The annual grand prize winner receives free access to Illumina sequencing data. One past winner, the Biosciences Eastern and Central Africa–International Livestock Research Institute Hub, is using Illumina sequencing to better understand and combat two viruses responsible for infecting cassava crops throughout Africa.

Tomorrow, we’ll discuss more examples of how the global food system is evolving—from the shift to what we eat, to how technology can save some of our most beloved foods, to how more companies are taking action to transform their supply chains.

Image credit: Jamie Street/Unsplash

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Equinox and Brand Reputation: Here Today, Gone Tomorrow

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It is not unusual for fitness centers to focus their branding on personal achievement, and Equinox excelled at it—until last week, that is, when the media caught word that Equinox investor Stephen Ross was planning a fundraiser for President Donald Trump. Suddenly the carefully-groomed image has turned inside out. Members are bailing, and competitors smell blood. All because Equinox found itself embroiled in the middle of a controversy in which no business wants to be mired: accusations of purpose-washing.

What is purpose-washing?

The concept behind purpose-washing, or “woke-washing,” has been bubbling under the surface as the corporate responsibility movement matures.

Unilever CEO Alan Jope articulated it in a speech earlier this year:

“There are too many examples of brands undermining purposeful marketing by launching campaigns which aren’t backing up what their brand says with what their brand does. Purpose-led brand communications is not just a matter of ‘make them cry, make them buy.’ It’s about action in the world…’”

Purpose-washing resonates far and wide in today’s era of employee activism. Both employees and consumers expect brands to reflect the fundamental values they espouse in their corporate responsibility reporting and their branding messages. They also expect companies to respond to issues of public concern.

The Equinox situation represents a corollary: Behind-the-scenes brand owners and investors are also expected to act in ways that reflect and support the brand image.

What happened to Equinox?

Ross owns Equinox and other fitness properties such as SoulCycle under his Related Companies firm, where he sits as chairman and majority owner. It’s no accident that Equinox has come in for the majority of the attention, though—even though some have been quick to defend Ross as a passive investor in these companies, and a spokesperson for Equinox distributed a statement to the media emphasizing that point.

The Equinox brand launched in 1991 and adopted its signature “It’s not fitness. It’s life” marketing campaign in 1999.

That campaign has stuck for the past 20 years. The brand has been built around making fitness part of one’s personal identity. The purpose of Equinox has been to take working out beyond rote exercises in the sweaty halls of the local gymnasium and transform it into a spiritual quest.

The brand’s other long-running slogan is “commit to something,” which reinforces the suggestion that personal fitness can sub in for other kinds of commitments.

A 2016 article in GQ magazine provides some key insights. One member summed it up for reporter Carrie Battan, telling her that “the journey of Equinox … is a journey into self-discovery.”

An Equinox member herself, Battan observed: “Spend enough time at Equinox, and it starts to feel less like a gym and more like church, less like exercise, more like worship—an exorbitantly expensive religion in which everyone prays to the gods of achievement.”

For some Equinox members concerned about the policies and behavior of the president, the Ross fundraiser was like having the rug pulled out from under their feet.

Intentional or not, the fundraiser slapped the Trump brand on the Equinox doors. Members found their personal quests lumped into a physical manifestation of their deepest concerns, whether it involves misogyny, racism, xenophobia, homophobia or a combination of all four—all supported by their own membership fees and add-ons.

How boycotts can work, as they open a door to the competition

In a Washington Post article last week, fashion critic Robin Givhan portrayed the fundraiser as a unique betrayal, but she also questioned whether a boycott would have any effect beyond a smattering of dropped memberships. She described the environment at Equinox as a transformational feeling that “can sometimes be hard to come by.”

However, Equinox has risked a blow to its brand reputation, and good brands in decline can be more vulnerable to boycottsBoycotts can also have an impact where alternatives are close at hand. Equinox’s competitors in the crowded space of personal fitness are leaping at the opportunity to attract members with special offers and free trials.

On August 8, USA Today noted that Town Sports International, with 185 clubs in four major cities, was offering free workouts through the weekend. By August 10, Town Sports had plenty of competition, including Crunch and New York Sports Clubs, as well as trainers with individual studios.

Market Watch reporter Jeanette Settembre noted that, among other issues, “critics slammed the gym for being hypocritical for billing itself as LGBTQ friendly and supporting a president who has opposed the Equality Act, and whose policies have targeted people of color and women.”

What happens next?

Of particular interest is the approach of celebrity fitness instructor Tracy Anderson. Settembre was among those citing Anderson for her pledge to donate 20 percent in revenue from classes at several of her fitness centers last weekend to the Human Rights Campaign, Everytown for Gun Safety and the Martin Luther King Foundation.

The offer demonstrates a keen understanding of the purpose-washing at play in the Equinox situation. Anderson’s donation provides a clear contrast with the self-improvement-as-a-mission message promoted by Equinox. She provided her clients with an opportunity to offer material support to top influencers in the area of social justice.

If Equinox continues to lose members over the Ross fundraiser, it will be interesting to see how the company responds. Perhaps providing opportunities for its members to practice what Equinox preaches would be a good start.

A quick reminder about this October’s 3BL Forum!

Join us at 3BL Forum: Brands Taking Stands – What’s Next, at MGM National Harbor, just outside Washington, D.C., on October 29-30, 2019. The two-day event will continue our newly established tradition of bringing corporate leaders together on a fast-paced main stage, keenly focused on the ‘why’ and ‘how’ behind their thinking as we navigate a rapidly changing business environment.

Receive a 25 percent discount using this code PUNDIT2019AUGUST when you register here during the month of August 2019.

Remember, tomorrow, and every Wednesday, is Brands Taking Stands Day on 3p! We’ll focus on why more companies and their executives are taking stands—whether over the most vexing social and political issues of the day, or by embedding sustainability and social impact into their everyday operations which, in our view, is taking a stand.

Image credit: Victor Freitas/Unsplash

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How Organic Valley Achieved 100 Percent Renewable Energy

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Tariffs imposed in 2018 have created uncertainty and job losses in the solar industry. While challenging, the silver lining is that the looming threat of more tariffs has inspired companies, states, and businesses to innovate in order to continue to shift the U.S. energy system toward more renewable sources.

One example of a unique approach to shift the U.S. closer to a clean energy future are 10 solar projects that dot the Wisconsin and Minnesota countryside, called the Butter Solar portfolio.

Organic Valley, the largest cooperative of organic farmers in the U.S., is the company that propelled the Butter Solar portfolio into existence. The venture was made possible with the help of the many partners who came together under the Organic Valley Community Solar Partnership to achieve the dairy and egg cooperative’s goal of 100 percent renewable energy.  

The partnership includes Organic Valley; Upper Midwest Municipal Energy Group (UMMEG), a group of 16 municipality utilities; OneEnergy Renewables, a North American developer of community and utility-scale solar energy projects; and BluEarth Renewables, an independent power producer. 

Because Organic Valley is a cooperative, it could not work directly with a local solar project and instead needed to go through local utilities. This is why Organic Valley approached the Cashton utility, which brought it back to its fellow UMMEG members. From there, interest grew among UMMEG. As a result, 13 out of the group’s 16 members agreed to join the partnership due to cost savings and capacity value opportunity, said Stanley Minneck, Organic Valley’s energy services and technology manager.

Richard Heinemann, an attorney for the UMMEG, confirmed that its decision to join the partnership lies in the economics: "It's a signal that green energy is, from a cost standpoint, competitive [with fossil fuel sources].”

To set up the partnership, OneEnergy Renewables worked with BluEarth Renewables, which built and now operates the installations that became the Butter Solar Portfolio. UMMEG buys the generated electricity for a fixed rate and then sells the electricity to Organic Valley. Then, Organic Valley purchases renewable energy certificates (RECs)—documents that represent property rights to renewable electricity—to achieve its goal of being 100 percent powered by renewables, Tim Sylvia of PV Magazine reports.

How Organic Valley helped bring renewable power and jobs to the Midwest

The partnership also demonstrates that a large company, including one structured as a cooperative, can achieve environmental goals while creating renewable electricity for its neighbors. The partnership entails an eight-acre solar installation on Organic Valley’s property in Cashton, Wisconsin, and other installations across the Midwest, which provide 23,000 individuals with reduced energy costs and cleaner energy options.

During an interview with TriplePundit, Minneck pointed out that it was important from the beginning that Organic Valley purchase RECs that produced energy for more than just the cooperative’s needs.

Six communities in the Midwest that will benefit directly from the community solar partnership include Arcadia, Cashton, La Farge, Merrillan and Viola in Wisconsin, as well as St. Charles in Minnesota, Waste 360 reports. For example,all subscribers of the Cashton Municipality will see savings on their energy bills for the next 25 years, Minneck told 3p.

“These projects, and others like them, create regular and meaningful work for dozens and dozens of solar professionals, like the hard-working folks from Arch Electric based out of Plymouth, Wisconsin,” Minneck wrote in a recent Organic Valley blog post. “Providing opportunity for others to join the renewable energy industry is an essential part of why partnerships like the Organic Valley Community Solar Project matter.”

Collaboration key for Organic Valley to finance this venture

Organic Valley also recruited other brands to sign on and purchase RECs to finance the partnership and increase the amount of renewable power available in the Midwest. Dr. Bronner’s, the Wisconsin capital city of Madison and Clif Bar purchased RECs before the project finished, bringing the total capacity of the project to 32 megawatts, Minneck said.

“Without all of the partners participating, the economics would not have worked out,” Minneck concluded.

Image credit: Organic Valley

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Mentorship Changes the Game in Early Childhood and Elementary Education

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This article series is sponsored by the SunTrust Foundation and produced by the TriplePundit editorial team.

It’s amazing to see what can happen when an adult and a child spend 30 uninterrupted minutes together with a book. 

So says John Gibson, an Atlanta lawyer who specializes in intellectual property litigation. Gibson also serves as the board chair for Everybody Wins! Atlanta, an innovative mentorship program that aims to instill a love for reading in children and, in the process, improve the reading levels of American students.

Studies show that reading aloud to a child is the best way to improve literacy. For thousands of children throughout the country, however, there is simply no one to read to them. Parents may be juggling multiple jobs, working long hours, or simply not around. For these children, the impact can be devastating. 

According to research, a student who can't read on grade level by third grade is four times less likely to graduate by age 19 than a child who reads proficiently by that time. Add poverty to the mix, and a student is 13 times less likely to graduate on time than his or her proficient, wealthier peer. 

In Georgia, where two-thirds of fourth grade children are not at a proficient reading level, the statistics paint a bleak picture. 

Sometimes people just need an extra hand

Gibson, who has volunteered with Everybody Wins! since 2011 at Hope-Hill Elementary School in Atlanta’s Old Fourth Ward, says the role of teachers and schools is becoming tougher as class sizes increase, budgets shrink, and testing requirements grow each year. 

“The schools invite us in because they know that every bit helps,” Gibson tells us. “The schools really want their students to succeed. We are one piece of the puzzle.”

Everybody Wins! was founded nearly 30 years ago by Arthur Tannenbaum and his wife, Phyllis. Tannenbaum, a chief financial officer for a textile corporation in New York City, was distressed that disadvantaged children didn't get what he considered to be an equitable education. Phyllis, an elementary school teacher, knew firsthand the benefits of reading and suggested that her husband develop a reading program which took place during lunch and recess and didn't pull children out of class.

In 1991, Tannenbaum took an early retirement and formed the privately-funded nonprofit Everybody Wins! New York. Today, there are chapters in Boston, Pittsburgh, Washington, D.C. and Atlanta. 

Changing a child’s life in the time it takes to have lunch

Through Power Lunch, the primary program of Everybody Wins!, teachers select students in first through fifth grades who read below grade level and would benefit from the attention of a caring adult. Everybody Wins! pairs the students with volunteers, who promise to read to the same reading buddy consistently once a week during his or her lunch hour for the entire year.  

During the 2018-2019 school year, Power Lunch volunteers in Atlanta were paired with more than 500 students at 10 low-income Title I schools. And because there is always a waiting list of more kids who want to be in the program, Everybody Wins! is constantly recruiting additional volunteers. 

Because work schedules sometimes fluctuate, volunteers also have the option to "share" a student with another volunteer: The two volunteers then take turns reading to the child, visiting the child twice a month instead of weekly. Children are not drilled in phonics or whole-word reading methods. The goal of the program is to improve literacy by making students want to read.

The other important element of the program for the students is the consistent presence of an adult in their lives, who will show up for them every week and who they know wants them to succeed. “Consistency is so important,” says Gibson, whose wife is also a Power Lunch volunteer.

The Power Lunch program is free to the students and the hosting school. The program is funded solely by donors and grants from individuals and organizations such as the SunTrust Foundation based in Atlanta. The support of the SunTrust Foundation in particular will be used to help students bridge the gap between reading and financial literacy through interactive activities that introduce basic money management and financial concepts. Donor funding also allows Everybody Wins! to purchase books for students and helps expand the number of schools it can serve.   

And it’s not just the kids who benefit from the program—based on comments from mentors, it’s clear how the organization got its name. “I have gained more than I can possibly express from the program, including a deeper understanding of what a school day is like for today’s elementary students, and a glimpse into the lives of teachers,” said Caitlin Daugherty Kokenes, a reader with Everyone Wins! Atlanta since 2016. “All of these things help me be a better advocate for public education and the needs of our system.”

Results speak for themselves

Each year since the Atlanta chapter began in 1997, volunteer readers have spent more than 6,000 hours reading with their students. In a recent study of the program, 91 percent of Power Lunch students showed measurable reading improvement from the beginning to the end of the school year, while 80 percent of students in the program passed the reading portion of the statewide standardized test. 

For Gibson, however, it’s the smaller aspects that show the true results. 

“The first time you meet with a new student, they are shy,” he says. “They hesitate to speak to you and definitely don’t want to read out loud. But at the end of the school year, they can’t wait to tell you what they did over the weekend, they want to read to you, and they remember that vocabulary word you shared with them last week … Now they can say it and know what it means. It’s absolutely amazing to see their reading and their confidence grow.” 

He notes that the end of every school year is emotional. The volunteers and students meet for a presentation in the gym, where each mentor and student take a picture together. Gibson has pictures in his office from every year. “You hope you will see them next year, but if you don’t, you know you have done your part to advance them to the next stage in their life. You know you have given them the means to succeed.” 

Image credit: U.S. Department of Education/Flickr

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