Environmental Sustainability Becoming Mandatory Component of Business Model for Consumer Businesses, According to GMA/Deloitte Study

WHITE SULPHUR SPRINGS, W.Va., June 11 /PRNewswire/ -- Environmental sustainability is not a passing trend; rather, it is a critical business issue that is rapidly becoming a requirement for consumer businesses, according to a recent study conducted by Deloitte Consulting LLP for the Grocery Manufacturers Association (GMA).

"While the issues associated with sustainability -- such as waste management, commodity shortages and energy usage -- are nothing new, the expectations of shareholders, consumers, regulators, and other constituencies have changed, pushing sustainability to the top of the agenda for many consumer products companies," said Peter Capozucca, a principal with Deloitte Consulting and co-author of the study. "It is unlike any business issue consumer businesses have encountered in the past. The industry's large environmental footprint and unique dependencies on agricultural inputs, water and packaging make sustainability a critical strategic issue that consumer packaged goods companies must address proactively."

Titled "Sustainability: Balancing Opportunity and Risk in the Consumer Products Industry," the study found that 85 percent of U.S. consumer business companies have active sustainability initiatives; most common are recycling and energy conservation programs. While retailer requirements (specifically Wal-Mart) have been influential, they have not been the primary driver behind the sustainability movement; more than 60 percent of the companies surveyed said that internal priorities are the primary driver of these efforts, while regulatory compliance and Wal-Mart's packaging initiative are the second most cited drivers. In fact, the study found that consumer packaged goods (CPG) companies are ahead of most retailers in implementing sustainability programs, driven by internal motivations such as cost reduction, regulatory risk mitigation, and concerns over potential shortages of commodity inputs. However, both retailers and CPG companies cited several barriers to comprehensive sustainability efforts, including regulatory uncertainty and unjustifiable returns on investment.

The final report of this study will include a compendium of retailer sustainability practices that GMA members can access online at http://www.gmabrands.com/. Manufacturers can use the compendium to track sustainability trends among retailers and help them better align their sustainability practices with those of their customers.

"This study tells us that sustainability is not just about 'going green' - it involves competing in a different world with constantly evolving issues and expectations," said Stephen Sibert, GMA's senior vice president of industry affairs. "GMA will continue to develop the compendium of retailer practices to foster and enhance collaboration between manufacturers and retailers on sustainability initiatives. Such cooperation is mutually beneficial, and more importantly, helps companies meet consumer demands."

The study found that companies that have been successful in this area are the ones that define sustainability as a top strategic priority and take a structured, methodical approach. Typically, this means that the CEO is directly involved, and that sustainability is treated as a business requirement. These companies also collaborate with a broad group of stakeholders, such as suppliers, leading scientists and academics to innovate sustainable products and packaging; consumers on proper usage and disposal of products and packaging; and NGOs, shareholders, and regulatory bodies to ensure solutions are compliant.

The report was presented this past weekend to senior executives attending the annual GMA Executive Conference at the Greenbrier in White Sulphur Springs, WV.

About GMA

The Grocery Manufacturers Association (GMA) represents the world's leading food, beverage and consumer products companies. The association promotes sound public policy, champions initiatives that increase productivity and growth and helps to protect the safety and security of the food supply through scientific excellence. The GMA board of directors is comprised of chief executive officers from the association's member companies. The $2.1 trillion food, beverage and consumer packaged goods industry employs 14 million workers, and contributes over $1 trillion in added value to the nation's economy. For more information, visit the GMA web site at http://www.gmabrands.com/.

About Deloitte

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Deloitte & Touche USA LLP is the U.S. member firm of Deloitte Touche Tohmatsu. In the U.S., services are provided by the subsidiaries of Deloitte & Touche USA LLP (Deloitte & Touche LLP, Deloitte Consulting LLP, Deloitte Financial Advisory Services LLP, Deloitte Tax LLP and their subsidiaries), and not by Deloitte & Touche USA LLP.