Last month I toured one of Amazon’s UK Fulfilment Centres to see the process and people behind my Amazon Prime deliveries. Those working looked happy, management wore “can I help?” T-shirts and the HR team were visible in the middle of the vast floor. Amazon’s operational transparency reassured me about the company.
Transparency, however, for brands which can negatively impact the environment or those involved in farming or manufacturing, can be much more potent. It has the potential to bring attention and accountability to a ‘hidden’ problem and reward the brands that take decisive action.
Consider chocolate and the success of Tony’s Chocolonely which now has a 20% market share in the Netherlands by raising and tackling the issue of child labour in cocoa production. Tony’s Chocolonely has ensured it uses only traceable cocoa beans purchased directly from partner cooperatives in Ghana and Côte d’Ivoire. They pay higher prices to ensure their 5,000 farmers earn a living wage.
What Tony’s has achieved is very impressive, but delivering transparency and addressing the sustainability of supply is easier for a start-up that has fewer suppliers and the opportunity to start with a premium price. Growing consumer scrutiny and new technology, however, are driving transparency rapidly beyond the small and nimble.
All brands will need to be ready for a future ‘total’ transparency of company impact and action. I have therefore captured some key themes to stress test your strategic brand thinking. They draw heavily from the chocolate category, but are applicable to personal care, clothing and beyond.
1. Brand specific ‘accreditation’ on sustainability
Digitally tracking the journey of raw materials and application of blockchain technology will mean clearer evidence on the social and environmental impact of a brand’s supply chain. This, in turn, increases the potential for brand specific sustainability commitments and claims. Tony’s, for example, pays more than the Fairtrade premium to farmers to support the on pack commitment:
Mondeléz have now created their own “Cocoa Life” accreditation that encompasses 10 targets that will replace Fairtrade certification on their brands. Barry Callebaut (the leading manufacturer of high-quality chocolate) has also established the “Forever Chocolate” programme.
Brands competing in the chocolate category have recognised they need to visibly demonstrate their distinct and ambitious action in support of sustainability:
Transparency is driving brand / company specific accountability and accreditation
2. Sustainability performance more salient on shelf
Smartphone QR code scanning and blockchain technology will combine to provide deeper shopper information on a product’s supply journey. Retailers such as Carrefour are expanding the number of products within their blockchain platform to show origin, where they are packed and if genetically modified.
Similarly, H&M customers shopping on-line will soon be able click on a tab labelled “product sustainability,” to find details about the suppliers and factories responsible for the item. Those visiting a store can also use the retailer’s app to scan the price tag and view these details.
3. Higher prices require a better planet / social impact
Greater transparency will support a clearer link between price and social / environmental impact. Tony’s Chocolonely, for example already promises that around 10% of each bar’s retail price reaches their farmers compared to 3-6% for the industry. This commitment supports a price premium of more than 40% compared to Cadbury.
Carrefour has indicated that its blockchain platform will enable shelf presentation of how much the farmer earns out of a retail price.
Oxfam estimated that farmer share of chocolate retail price could be as low as 3% in 2012
Technology again will have a role in increasing the visibility of farming communities and factory workers. The UN Development Programme (UNDP) has recently funded a social experiment with chocolate bars that enables consumers to donate directly back to cocoa farmers. Inside each bar’s wrapper there is a scannable code that can be used to donate a blockchain token to farmers in Ecuador.
4. Brands judged first on product impact & action
Transparency of societal and environmental impact heightens the importance of brand purpose being based on action rather than words.
The current Cadbury’s “donate your words” campaign is a warm, creative activation idea that addresses a real social issue. Such campaigns, however, will merely represent a distraction if competing brands are perceived as superior in protecting the planet and their communities. Mondeléz (the owner of Cadbury) know visible progress on their Cocoa Life plan is vital to prevent this.
Ipsos independently evaluates Cocoa Life based on 10 global KPIs. Mondelēz is aiming to source 100% of its cocoa sustainably, through Cocoa Life by 2025.