Sustainability Series: Annie’s
August 27, 2014
In 1989, Annie Withey co-founded Annie’s Homegrown, Inc. with Andrew Martin with the goal of making a healthy and delicious macaroni and cheese for families. Twenty-five years later, Annie’s is still nourishing families with simple, down-to-earth foods – from pastas to snacks to pizzas to dressings – that taste great and are easy to love. We talked to Shauna Sadowski, Director of Sustainability at Annie’s, about how food companies can benefit from viewing their operations through a sustainability perspective.
How does your business define sustainability?
Including sustainability as part of the company decision-making process provides an additional approach for how a business considers not only its financial impacts, but also its environmental and social impacts. At Annie’s, we integrate sustainability into our decision-making to both minimize negative impacts on people and the planet, and to look for ways to improve our impacts in these areas. Through our programs, we look for opportunities to regenerate living systems and to protect the food, air, water and habitat needed for living things to thrive. In simplest of terms, we want to move from a “take, make, waste less” sustainability approach to one where there is no waste in the first place. Just as in nature, everything that is “waste” would become “food” for something else.
How are you incorporating sustainable practices into your business?
Our sustainability focus has evolved over the years, but our goal has remained: to do business differently – and with purpose. As we’ve grown to where we are today, we continue to look for ways that we can use the engine of our business to do good.
Our sustainability efforts stem from our values as a company. These values are critical to who we are – so much so that they are included in our annual report to shareholders. These core values include a focus on creating better products, ensuring transparency, and being socially and environmentally responsible. This is where our strategy stems from. Furthermore, our lifecycle assessment work showed us – quantitatively – where our biggest impacts took place. From this, we developed a program with four key platforms: creating a more resilient supply chain, walking the talk at our workplace, inspiring change in our local community and the larger food system, and tracking and measuring our performance across each of these areas.
We know that the greatest opportunity for us to drive positive change in the food system is through the products that we make. We invest a significant amount on ingredients each year, so what we purchase and who we purchase from can make a big difference. In FY2013, we purchased 35 million pounds of organic ingredients, thus contributing to healthy soils, clean water and greater biodiversity.
For our packaging, we prioritize recycled content for our paper and glass. We also strive to close the packaging loop, with more than 90% of our packaging being recyclable. We work closely with our manufacturing partners to ensure that they’re closely monitoring their energy, water and waste. We recognize our suppliers that are making a positive difference with an annual Green Bernie Award.
We strive to walk the talk at home in our home office, fostering a thriving workplace and employing green practices. In our LEED Gold certified Berkeley headquarters, we focus on conserving energy and water, minimizing waste, preventing pollution and shrinking our carbon footprint. Additionally, we offer comprehensive healthcare and benefits to our employees. We also provide sustainability benefits that include financial incentives for biking to work, low-emission vehicles and eco-home improvements. We also have programs to support a healthy workplace, including fitness classes at our on-site gym and access to fresh, organic fruit and vegetables (some from our on-site organic garden). We offer quarterly sustainability education to all employees, who we encourage to volunteer in their local communities as part of their fiscal year requirements.
Our third platform focuses on inspiring change, engaging with experts, and influencing for a more positive food system – this includes policy involvement and philanthropy programs. We are deeply committed to inspiring change and supporting a momentous shift at the industry level. To expand our reach, we collaborate with industry partners, such as the Organic Trade Association, The Organic Center, the Sustainable Food Trade Association and others, to share what we know and to learn, so we can collectively move toward a healthier, more sustainable food system. As part of our industry engagement, we seek to strengthen organic and sustainable food systems, support renewable energy projects and advocate for policy improvements.
Giving back also plays a central role. We contribute to like-minded organizations that we believe are making a positive difference. Each year, we award Sustainable Agriculture Scholarships to undergraduate and graduate students pursuing studies in sustainable and organic agriculture. Extending our reach to the national youth, we donate materials and financial resources to help fund new and existing school gardens as part of our Grants for Gardens and Garden Funder programs. We also support FoodCorps, a national nonprofit whose service members teach kids about food and where it comes from.
Finally, we track and measure all of the above, using key metrics to look at and assess our performance. As a business, we firmly believe that what we measure gets managed, and the same is true for sustainability.
What are your short term and long term goals?
All of our goals – both short and long term – fall into the larger sustainability framework already described above. In the short-term, we’re striving to improve across all our baseline measures. In the long-term, we want to contribute to a more sustainable food system.
Where do you think you’ll have the biggest impact?
I talked about how we make big investments on ingredients above. Also, building sustainable relationships with organic farmers and sourcing partners is vital to our mission and allows us to create greater transparency and traceability from farm to fork. For example, since 2008, we’ve worked closely with Organic Valley, a cooperative of more than 1800 farm families, to provide the organic cheese in our organic macaroni and cheese products. Between 2008 and 2012, our partnership prevented more than 23MM lbs. of synthetic nitrogen fertilizers, pesticides and herbicides from polluting the air, land and water.
How do you measure your progress?
We measure and manage our performance through an extensive metrics tracking process. We track more than 100 metrics across 11 category areas, covering both owned operations and our supply chain. Data comes from several different departments, including Finance, Operations, Product Innovation, Marketing and Sustainability. These metrics align with the reporting guidelines from the Sustainable Food Trade Association. The categories include organic, distribution and sourcing, energy, climate change and emissions, water use and quality, solid waste reduction, packaging, labor, animal care, sustainability education, and governance and community engagement.
We share these results internally and across the company so everyone is aware of our performance. We also communicate our progress to the Sustainable Food Trade Association, the Carbon Disclosure Project and via our annual public-facing sustainability report.
To assess our greenhouse gas emissions, our Sustainability Team measures according to the GHG Protocol, the most widely used tool for businesses to quantify and manage their emissions. While our absolute emissions have increased across the aforementioned categories alongside revenue growth, our normalized emissions decreased by 4% over the past three years. While we’re still on a journey, we believe our new programs (developed in FY14-15) will move us closer to our goal.
How do retailers factor into your efforts?
Our premium products are made from high-quality ingredients and are sold at affordable prices, which appeal to health-conscious consumers who seek to avoid artificial flavors, synthetic colors and preservatives common to many conventional packaged foods. As more and more consumers shift towards more healthful purchasing decisions, our loyal consumer following continues to grow, which has enabled us to migrate from our natural and organic roots to a brand sold across the mainstream grocery, mass merchandiser and natural retailer channels. Today, we offer over 145 products and are present in over 35,000 retail locations in the United States and Canada.
Why are sustainable business practices important to the food industry?
Sustainable business practices are imperative to the food industry given that agriculture – where most food comes from – depends on natural capital, such as clean and plentiful water, healthy and fertile soil, and rich biodiversity. As such, food companies will benefit by accounting for a more systems-based perspective that a sustainability lens can offer, assessing not only their financial impacts, but also their environmental and social impacts of their business operations and supply chains. Such a view offers insight not only into potential risks (and how to mitigate), but also opportunities for new innovations and market advantage.
Why are sustainable business practices important to the consumer?
Today, consumers are increasingly concerned about what is in their food and where it comes from. They also want to know the social and environmental impacts that food has had – from farm to fork. While not all consumers are equally “dark green” in their purchasing decisions, more consumers today want to support responsible companies, the products they make, and/or services they offer. Many consumers also look for the individual and family benefits provided by such products and/or services. Additionally, the “darker green” consumers are also looking for ways to extend those benefits to the greater planet and society. Herein lies the opportunity for companies who seek to integrate sustainability principles into their business and products.