Sustainability and Diversity: Big Food, Big Promises. Notes from CAGNY 2021

Sustainability was definitely at the forefront of all presentations at CAGNY this year, from recyclable packaging to offsetting carbon emissions, to the testing of plastic alternatives. Whether pressured by consumers to do better or intrinsically motivated to save the planet, it was great to see the major FMCG companies rising up to the key challenge of the next decades. Although listening to their stated plans, we wonder, if it isn’t too little and … too late.

To name a few:

-     Company X announcing the target to be carbon neutral by 2050 (29 years, really?)

-     Company Y divesting a water division (to reduce water in plastic bottles) due to its heavy role in CO2 emissions, while investing at the same time in takeaway coffee in single-use cups

-     Company Z committing to sustainable sourcing as key pillar, but promises shareholders that Gross Margins will improve by 3% by smarter sourcing to access cheaper materials (please help us understand how this works?)

Source: Kantar from the CAGNY Nestlé presentation showing that Sustainability is Good Business

The focus on sustainability is in any case a good business decision, as market research shows that purpose-driven brands have been outperforming conventional brands in terms of growth. There is extra perceived value on the side of consumers, who are seeking products and brands with visible sustainable credentials and are willing to pay (in some cases) more knowing they are “doing good” while consuming.

We see this string shift of demand to sustainable brands with our portfolio companies like Air-Up that produces a smart reusable water bottles with recyclable scent-flavor pods to remove the need of single use water bottles, the need to transport them and the need for any sugar to make tap water fun and more enjoyable. Or committed brands like Cortilia, with ultra-short supply chains connected directly to local organic farmers who get full value paid for the freshness of their vegetables. 

Last but not least, during the CAGNY presentations, our attention was caught by the emergence of the concept of (gender) diversity and inclusion, both at employee level and product design with products targeting different gender or ethnical backgrounds. Women are responsible for 70-80% of all food purchases in Europe and North America, and the ability to satisfy consumer groups that are beyond the Caucasian urban millennials significantly increases the total addressable market. The one thing missing though, was diversity on stage across the presenters. Maybe the challenge for CAGNY 2022 would be to Walk the Talk and add some diversity in executive boards and have, at least, some more female and non-Caucasian presenters.