The sessions on sustainability in retail bristled with facts, and made a powerful case for retailers to use the “carrying capacity” of the planet wisely. Sample this:
- Global balance is based on the equation that Population * Consumption = Carrying Capacity of the Planet. While global population will rise by 25per cent in the next 40 years, per capita global income will rise by 2.9X. That means that consumption will double.
- By 2050, there will be 9 billion people, consuming 18 billion “units” of resources. At current trends, half these “shopping carts” will be from India and China.
- It took Britain 155 years to double its GDP. The US took 53 years. India takes 17 years and China 12 years. China is 12 times as fast as the UK when it comes to doubling GDP. In terms of scale, China’s GDP is already 3x larger than the UK.
- That means we are going to have to produce as much food and fiber in the next 40 years – as we did in the last 8000!
- The single most telling fact – studies show that farmers who use sustainable practices use 40per cent less water, 60per cent less pesticides and most importantly, are 15 to 20per cent more profitable than their peers. But it takes a decade to achieve this balance.
The session also focused on the “hall of fame” – Retailers and Consumer Product Groups (CPGs) who have made commitments to clean up their act. Most of the CPGs focus on sourcing responsibly from their supply chain (e.g. Unilever has committed that ALL biological inputs will be sourced sustainably by 2020, MARS has committed that 100per cent of its cocoa (and they consumer 17per cent of the world’s supply) will be sourced responsibly by 2020).
Retailers focus on keeping the environmental balance – e.g. M&S pioneers a concept of “ShowUP” – where they swap old clothes with the commitment being to – recycle as much of volume of used clothing as they sell new clothing.
From an Indian perspective – two facts which were worrying; and actionable.
- 35 per cent of the world’s gold is sourced illegally (that means it is not sourced in a sustainable manner). India consumers 25 per cent of the world’s gold supply every year.
- Similarly – 70 per cent of the world’s palm oil is grown illegally. That means that 25 per cent of palm oil traded is illegal – and India is one of the world’s largest importers.
The single fact that stood out from the panel discussion was that Retailers in India don’t have answers to the question of how to get consumer engagement at a mass level on the subject of sustainability. As Mani Chinnaswamy (who is one of the pioneers of ethically grown cotton commented) “In India, customers are slowly becoming aware of sustainability concerns around food – thanks to the debate on genetically modified seed, and popular programs like “Satyamev Jayate” . However, while we are one of the largest exporters of cotton – people are not aware of the fact that our cotton is “blood cotton” – it is grown using pesticides that deplete the water table. We have had 250,000 farmer suicides in the last few decades. Sustainable growing practices can be part of the solution”.
Retailers in India are making efforts to be sustainable in their space management practices (e.g. using LED fixtures, maximizing natural lighting etc). However – these are “marginal” practices at best. With the exception of a few niche brands – there is currently no large, national player who sells on an argument of sustainability.
The single biggest take away from the session? Green does mean more expensive in the short run and the vast majority of Indian consumers are “value” conscious. The industry does not have an answer to break this proposition. As Vasanth Kumar, Director, Max Retail division, stated “Sustainability is something we want customers to think about – but they are not yet thinking about it”.
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