Numerous discount grocers are competing for market share in the modern grocery industry. To stand out and gain loyal shoppers, Sprouts Farmers Market is defining itself as “responsible retailing” to reach its audience of health-conscious consumers. This model puts a focus on running a business in a conscientious way that makes social and environmental welfare a priority. It brings responsible business practices into play through sourcing, building, operations and community.
This is a smart decision on Sprouts’ part as 33% of shoppers decide to purchase from brands associated with environmental or social responsibility practices. Sustainability and other practices are important to broad groups of shoppers, including those who prioritize their health. Also, Sustainable Brands showed that close to two-thirds of U.S. shoppers presume that businesses will be the forces instigating social and environmental change from now on, while 80% think that businesses should keep improving their practices in corporate social responsibility. Related to food products in particular, Statista showed that nearly half of U.S. shoppers cared about sustainably produced food products in 2017.
Upholding these values is also important for competing with other brands and taking advantage of market share. Globally, it is projected that the market value of ethically labeled packaged foods will increase from $793.3 billion in 2015 to $872.7 billion in 2020. Considering that shoppers are holding companies more accountable, it makes sense for grocers to follow this practice. Through its “responsible retailing” practices, Sprouts is a sustainability leader that can act as an example within its segment of discount grocers.
What Is “Responsible Retailing”?
Sprouts’ approach to social and environmental responsibility includes four tenets:
Sprouts’ sourcing follows Good Agricultural Practices (GAP), which includes guidelines for employee safety and hygiene, as well as the limiting of water used by suppliers. This tenet also includes animal welfare by promoting humane treatment of livestock. For example, the grocer is committed to working with its suppliers to transition to 100% cage-free eggs by 2022.
There are two major components to the company’s commitment to responsible operations: its Food Rescue program and Food Waste to Farmers program. Americans waste 150,000 tons of food each day, and that includes food at grocery stores that is no longer fit for sale. With its Food Rescue program, Sprouts partners with local agencies to donate the foods that aren’t fit for the shelves but still good to eat.
The food that isn’t good enough to eat is either composted or sent to cattle through its Food Waste to Farmers program. This provides cattle with a nutritious diet and helps reduce carbon emissions.
Sprouts founded the Sprouts Healthy Communities Foundation in 2015 to make positive change in the neighborhoods surrounding the stores. The goal of the foundation is to improve the lives of employees, customers and other people in the community.
Through the foundation, the grocer partners with local food banks, service groups and various organizations like Autism Speaks to support wellness-based initiatives. And with its Neighborhood Grant program, Sprouts is donating $2 million to nonprofit organizations to teach children the importance of nutrition and healthy eating, and to increase access to nutrition in a number of communities.
The commitment to sustainability extends to the way the stores are built and designed. The grocer uses energy-efficient equipment when building new construction or remodeling older stores. The stores are also built to Leadership in Engineering and Environmental Design (LEED) Silver specifications, which promotes greener building practices, and include skylights with solar panels and battery power to reduce lighting needs and increase efficiency.
Sprouts’ Dedication to Sustainability
Other retailers can learn from the specific ways Sprouts carries out its “responsible retailing” tenets. In 2017, Sprouts’ Food Rescue Program had a 55% food waste diversion rate, which supported its “Zero Waste” goal to reach a 90% rate by 2022. In fact, the program has donated more than 43 million pounds of food, the equivalent of 35 million meals, to people in need, according to the company website. The grocer also supported the community by donating $25,000 to Real School Gardens in celebration of Earth Day, according to Winsight Grocery Business.
Sprouts is able to create massive savings through its sustainability initiatives. Winsight also noted that Sprouts’ operational best practices result in more than $6 million in energy cost savings per year across its stores. It prevents the release of more than 65,200 metric tons of greenhouse gases each year, and reduces food and water waste, saving more than 23 million gallons of water and more than 5,700 tons of food from being wasted.
While it can take time and effort to develop a sustainable business, other grocery retailers can start with steps like these:
- Encourage Reusable Bags: Reusable bags minimize the use of plastic that harms the environment. Aldi does not provide complimentary shoppings bags, requiring shoppers to buy a reusable bag or bring their own. This is part of the company’s initiative to cut waste across its stores.
- Opt for a Digital Receipt: Receipts require a large amount of paper that harms trees, and people throw away about 90% of their receipts. Switching to digital receipts saves on this paper waste. The Fresh Market is one supermarket that offers e-receipts. It also encourages sign-up through special offer incentives.
- Offer Sustainability Reports: These reports make the company’s sustainability goals public. This is important for gaining the trust of shoppers, especially those in younger generations. Discount grocer Lidl created a sustainability report that included goals such as timelines for reducing salt and sugar content and removing toxic chemicals from its production of textiles, explains Handelsblatt Global.
- Allow Refills With Reusable Containers: With some foods, it’s possible to have shoppers bring a reusable container to refill. Stores can offer bulk foods such as nuts, spices and coffee, and encourage patrons to bring containers to fill. This helps to cut down on packaging waste. Whole Foods, for example, has a bulk section with certain foods found in dispensers. Shoppers can scoop or pour the amount they want into reusable containers.
Sustainable retail practices are growing in popularity. They are beneficial because they satisfy shoppers’ needs and help businesses uphold their values while making a positive impact on the environment. Sprouts provides a case study through its “responsible retailing” program that focuses on ethical sourcing, operations, neighbor and building. Try the strategies listed to quickly get started with sustainability while working toward a long-term strategy.