Co-op Link to Sustainability

NCFC study shows ‘farmer-owned’ message
resonates with consumers on environment

Editor’s note: this article was contributed by
the National Council of Farmer
Cooperatives (NCFC), a national
organization that helps represent the
interests of farmer-owned cooperatives. For
more information about it, visit:
www.ncfc.org.

n Alice in Wonderland, Alice chases the white hare down the rabbit hole and begins the journey of a lifetime. In today’s marketplace, the elusive rabbit is sustainability and the “chase is on” for consumer acceptance.

More than ever, companies are championing “greener” practices that pledge to reduce pressure on natural resources, cut waste and deliver energy efficiencies. A growing number are also beginning to aggressively market initiatives that promote everything from food to beauty products in a race to gain a greater “green share” of the retail dollar.

The trend is moving at a mindboggling rate. In just one recent 24- hour period, “sustainability” was mentioned in more than 600 print news headlines and received 18,000 mentions in news stories on the Internet, wire services and blogs.

The problem? Consumers are confused.

They understand that they should care, but with all of the conflicting definitions of “sustainability,” “green” and similar terms, consumers aren’t sure what the movement means, how to engage it or even whom, and what, to trust.

The National Council of Farmer Cooperatives (NCFC) believes that this uncertainty provides cooperatives with opportunities to shape the conversation in a way that is both meaningful to consumers and benefits farmers. And it has research to prove it.

Study gauges public perception
Jean-Mari Peltier, NCFC chief executive officer, says the organization recently completed a study to understand how average consumers view sustainability and to verify those elements that relate to cooperatives. NCFC found that “farmer-owned” may be the missing — but most relevant — link in telling the future sustainability story.

“Ultimately, the study pointed to the fact that many of the sustainability projects underway are missing the larger point of what consumers define as sustainable,” says Peltier. “When average consumers talk about sustainability, they expect environmental initiatives. But they are also looking for social responsibility and connecting to the fact that a real farmer produced a real product. The cooperative way of doing business embodies those principles that consumers define as sustainable.”

The study is part of NCFC’s broader initiative to create a new value proposition for members that includes analyzing conservation and environmental trends, regulations and farm policy to help cooperatives gain direct access to conservation dollars on behalf of their farmers.

“That collided with the reality that many individual companies — largely in the food, retail and environmental sectors — were quickly moving ahead to define sustainability,” says Peltier. “Some of them have begun to require their suppliers, including many farmercooperatives, to conform to a set of principles that emphasizes economic, environmental and social responsibility. We thought it was critically important that cooperatives put their imprint on the definition.”

NCFC employed The Hartman Group Inc., a Washington, D.C.-based research firm, to conduct face-to-face interviews with mid-level household shoppers in Kansas City, Mo., and Seattle, Wash. These results were added to a more expansive 2007 Hartman Group-sponsored study involving 1,600 consumers.

Perceptions of sustainability
The study focused on so-called midlevel consumers, who represent the majority (65 percent) of U.S. shoppers. In general, their attitudes and behaviors about sustainability are still evolving. Though “sustainability” is widely talked about in the business community, only about half (54 percent) of all consumers are familiar with the word; 5 percent of shoppers know companies that support sustainable values; 12 percent know where to buy products from those companies.

This consumer group — which values price, convenience, personal benefit, experience and knowledge — discussed their buying habits and talked about their thoughts regarding sustainability, cooperatives and the concept of farmer-owned. First, they associated sustainability with food and beverages that are healthier for families and the planet. They wanted food producers to show “value-added” through sustainable practices, attention to detail, extra care and passion.

The research also revealed that this consumer group endorses a “do-whatyou- can” philosophy by living more simply, giving back, recycling, reducing waste, education and being connected. “‘Doing the right thing’ has to be balanced by the family budget and how their life runs,” says Laurie Demeritt, president of The Hartman Group. “They also believe in ‘doing what you can,’ because there is no silver bullet.”

Cooperatives viewed favorably
Although mid-level consumers know very little about the cooperative business model, they generally view coops in a positive light.

“Consumers believe that cooperatives are more likely to be sustainable, based upon their structure and foundational elements,” says Demeritt. “Cooperatives sustain a treasured way of doing business, include people (farmers) who want to maintain their current lifestyle and sustain a community, and maintain certain environmental standards.”

Co-ops support rural communities, contribute to the economic growth of other farmers, work together to build customer relationships, pool resources, share benefits, are equally vested in an incentive to uphold standards, are responsible to workers and customers, and have ownership and family pride.

‘Farmer-owned’ rings true
The most compelling study result shows that the term “farmer-owned” resonates strongly with consumers and implies sustainability and cooperation without even saying it.

“Consumers have a limited attention span,” says Demeritt. “They have busy lives. Farmers and their cooperatives need to focus on the simpler ideas. It’s not that ‘cooperatives’ or ‘cooperation’ is negative, but ‘farmer-owned’ carries a better, easier-to-understand image. So, don’t spend time talking about what makes your cooperative sustainable … leap frog to farmer-owned.”

Consumers indicated that “farmerowned” carries images and feelings of: “Unlike some companies that are running to catch up, co-ops can — and need to — leverage their natural fit in this category,” says Demeritt. “The term ‘farmer-owned’ provides great marketplace opportunities because consumers seek ‘people-like-me’ connections behind the products they buy.

Further, consumers want to know where their food comes from, how it was made and by whom.”

To maintain consumer trust, those stories must be authentic. “Farmerowned carries hope and promise hailing to the comfort of the past and safety for the future,” she adds.

Telling the story
NCFC members, who are pioneers in developing sustainable co-op programs, believe the term “farmerowned” brings value and understanding in defining the cooperative’s role. George Smith, chief executive officer of NORPAC Foods Inc. — a processing/marketing cooperative owned by 220 vegetable growers in the Pacific Northwest — says NCFC is on the right track.

“As the world grapples with the issues of sustainability, the challenge is to make sure the definitions and the standard don’t get out of sync,” says Smith. “This is the perfect time for cooperatives to be involved in, and to influence, the definition of sustainability for growers and producers, rather than have someone establish it for us. There are efforts afoot on the customer side to define it, and, in some cases, we are involved with defining it for customers.”

This year, NORPAC celebrates its 50th year of offering a sustainable certification program to its 220 growerowners. Nearly half of its member farms, representing nearly 60 percent of NORPAC’s commercial output, are certified by a third-party auditor: The Food Alliance, a Portland, Ore.-based organization that provides sustainability certification standards.

NORPAC’s sustainable business practices also extend to its six plant operations from processing to transportation. The co-op recycles water and packaging, buys wind credits for energy efficiency and — starting just six months ago — began selling green beans bearing the Food Alliance certified sustainable shield.

“We are still evolving and growing in our sustainability efforts. We continue to encourage our farmers to certify because it’s the right thing to do,” says Smith. “We believe down the road that sustainable grower practices will be part of the entry fee into the market. We’re just trying to get ahead of that curve.

“Consumers still want to trust the farmer,” Smith continues. “They want to identify with who is making the food and they want to save the planet. If you combine ‘farmer-owned’ with those powerful messages, it has exciting possibilities.”

A case for the future
California winegrape growers and vintners are world leaders in establishing sustainability standards, certifications and the science to back it, says Karen Ross, president of the California Association of Winegrape Growers in Sacramento, Calif. As both the leading farm state and the state with the largest population, competition for natural resources in California is intense. More than 50 percent of all commercial grapes, produced by 5,000 growers and vintners, participate in an industry self-assessment program.

The process began in the early 1990s with growers who wanted to set standards for the first integrated pest management initiative. Today, the selfassessment process includes other ecofriendly standards and helps producers benchmark their operations, from ground to glass.

“This was a visionary group of growers and vintners who saw what was happening in the region and were determined to stay ahead of the curve,” says Ross. “They wanted to define the discussion and design their industry’s standards for sustainability and environment before it was regulated for them. They also determined early on that they needed the right production tools and the science to back it.”

Ross, who has helped growers partner with companies and secure federal conservation and wildlife grants for additional projects, believes NCFC’s recent consumer research is critically important.

“There is so much needed to tell the story about family-owned and operated businesses,” Ross says. “We want future generations making wine in this state. To do that, we have to tell the story in a way consumers can understand.”

Like NORPAC’s members, California’s winegrape growers and vintners know that sustainability isn’t an endpoint, but a journey of continuous change.

“The concept of sustainability is rapidly becoming mainstream,” says Ross. “The biggest blow up can happen when the public perceives that a farmer’s or grower’s story is not real. To be sustainable, we need to make sure people see that our business practices are verifiable, measurable and authentic. Sustainability is not about putting a mark on a label, but rather about being transparent in our operations and ensuring that our practices are real.”

Next steps
There is plenty of work ahead, according to Peltier.

“Consumers are looking right now for ways to connect with farmers,” she says. “They are looking for assurances that farmers are working with their cooperatives in a process of continuous improvement. That’s really what we are trying to foster.”

The first step for co-ops is to embrace the definition of sustainability as laid out by NCFC’s work: stewardship of natural resources, economic viability of farmers and their cooperatives, and commitment to rural communities.

The second step is to use the research to better connect consumers to farmers through cooperatives in a real and authentic way and, in the process, improve cooperative returns.

“Ultimately, we are doing this because we are committed to farmerownership, rural community, stewardship and to the farmers’ profitability,” says Peltier.

“Can we add to the bottom line because of an ability to connect farmers to consumers?” she continues. “Will it result in a better way to document stewardship practices that allow cooperatives access to federal government dollars? Can we help farmers ring excess costs from their operations through energy savings, identify inefficiencies — benchmark against each other — or operate in a more sustainable manner? Can we build more value through the marketplace or government programs? Those are the challenges.”





























July/August Table of Contents