GLOBAL - The talk of purpose is everywhere; from Apple’s Tim Cook telling shareholders not in favor of his green energy plan to “get out of this stock” to CVS’s Larry Merlo ending the sale of tobacco products because it was inconsistent with their purpose of “helping people on their path to better health.” Hybrid cars, recycled fashion, humanely raised meat and micro brews, are all different examples of how consumers are seeking out products for their associated values – beyond simply ‘quality and price’.
People everywhere want to connect with the food they eat. More and more, we want to know where it comes from, who made it, how – and why?
Through FAI’s work with leading retailers and food producers we have found that what’s good for farmers and fishermen, animals and the environment, is also ultimately good for business. Far more than a fad – demonstrating corporate purpose and commitment to sustainability are must-haves for companies hoping to build and retain consumer trust, market differentiation and stakeholder value in the 21st century.
But what does it mean – at a nuts and bolts level – to integrate purpose into a company or an entire industry brand?
Espersen is a major global seafood processor with annual revenue just shy of $300 million supplying major restaurants and retailers like McDonald’s and Tesco. At a recent panel discussion hosted by FAI in Boston at the Seafood Expo North America, CEO Klaus Nielsen told a packed room of seafood industry insiders that Espersen’s purpose is built into the DNA of his company.
Owned by a foundation and created with a founding purpose to return profits to its local community and stakeholders, Mr Nielsen underlines the importance of always walking the talk.
“We shouldn’t fool our selves to believe we can put a 10-20 per cent premium on our product just because we have a sustainability program,” he said, “the goal of everything we do is to be recognized as a competitive, responsible and trustworthy partner in the seafood industry by our employees, suppliers and customers.”
WATCH how Espersen supplier Jan Roger Lerbukt, CEO of Norwegian fishing company Hermes, describes his business’s purpose:
In other words, the “purpose of purpose” is to consciously establish a ‘direction’ for your business.
This goes hand in hand with ‘sustainability,’ which is often described as a journey to secure the needs of today without jeopardizing the needs of future generations. The word ‘sustainability’ can be traced back to the 14th century Latin word sustinere — which means ‘to continue — to keep up’.
For a business, combining purpose and sustainability makes sense in order to define a roadmap and mobilize the resources – intellectual, financial and material – required to keep up with a changing world and future-proof your operations.
At the discussion in Boston Amanda Lechenet, Manager of Corporate Sustainability Strategy at Coach, Inc., a $4bn annual revenue luxury fashion brand headquartered in New York, argued that projecting your purpose matters.
Because non-financial issues determine 80 per cent of a company’s stock price she has made it her focus to effectively communicate concrete steps and achievements the company is making. For a high-street brand like Coach, internal communication about sustainability is an effective way to turn thousands of shop staff already interested in the topic into effective brand ambassadors. With the right information in hand, these personal interactions with customers will project an authentic sense of shared value and help inspire consumer trust – a business asset that is extremely easy to erode and perhaps the hardest to build.
Coming from an investor perspective Aaaron Niederhelman sees immense opportunities for differentiation and market reward from the evolving brand desirability of sustainability. He claims the consumer will soon require companies not keeping up to make some huge steps forward, and that this demand is coming most strongly from younger people.
Despite tough economic climates, “sustainability is a shopping priority” for Millenials. The combination of more engaged younger consumers and the emergence of new digital and interactive engagement platforms have the potential to help inspire people to make good food choices.
According to Mr Niederhelman, this is the future of food not just as a source of necessary nutrients and sustenance, but as preventive health care.
Interested in building a purposeful brand?
Everyone’s opportunity is different, talk to us about your challenges. Contact Øistein: firstname.lastname@example.org or via twitter @vinothorsen