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Product Stewardship in Canada and the Role of The Grocery Retail Sector
Allen LangdonCanadian Council of Grocery Distributors
June 2nd, 2009
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What is CCGD?
• National industry association representing grocery retailers, grocery wholesalers and foodservice distribution.
• Focus on issues impacting food and grocery products:– National government relations– Regional government relations– Industry issues:
• Food safety
• Environment
• Labeling and Nutrition
• Supply chain, standards & technology
• CCGD members have supported environmental programs and initiatives in Canada, as they are seen to be an essential part of corporate social responsibility and good business practice.
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What are the Industry Priorities?
Top of Priorities for Industry CEOs:1. Economy & Consumer Demand
2. Food Safety
3. Corporate Responsibility
4. The Competitive Landscape
5. Retailer / Supplier Relations
Top Five Issues for Retailers1. Corporate Responsibility
2. Food Safety
3. Consumer Health & Nutrition
4. Economy & Consumer Demand
5. Technology & Supply Chain
Source: CIES Top of Mind CEO Study
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CCGD’s Environmental Initiatives
Plastic Bags
• Agreements in four provinces to reduce distribution of plastic bags by 50% over five years
Concentrate the Future
• Industry initiative to concentrate liquid laundry detergent
Carbon footprint
• In the second year of a grocery industry initiative to calculate our baseline carbon footprint
National sustainability strategy
• Initial focus on packaging
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Overview of the Green Shopper (They’re not Convinced)
• Fifty-four (54%) percent of shoppers consider sustainability to be one of their decision making factors
• The highest demographic concentration of green shoppers is older baby boomers; Younger shoppers place a high degree of importance on green issues, but have not incorporated it into their shopping
• Approximately twenty-two (22%) percent of shoppers actually purchased a green product during their last shopping trip
Source: Finding the Green in Today’s Shoppers – GMA/Deloitte
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Overview of the Green Shopper (They’re not Convinced)
• Shoppers do not always understand the social and environmental benefits of products and are often confused by the messages in the media
• Many shoppers are unaware of what makes a product sustainable versus merely “good for you”
• A large number of shoppers remain unsure of what is green and some are still unsure of the whole green movement
Source: Finding the Green in Today’s Shoppers – GMA/Deloitte
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Educating the Consumer
• Complex and shifting media landscape
• Mixed messages in the marketplace
• Lack of reliable life-cycle analyses upon which to base purchasing or production decisions
• Lack of involvement or support from any level of government
• In many cases, there may not be a clear winner in terms of product choice
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History of Product Stewardship in Canada
• Product stewardship was first established to support the deposit-return systems for beverage containers
• First Extended Producer Responsibility (EPR) Program in 1994 – BC Paint program
• Expansion of product specific programs (tires, used oil) continued in the 1990s to early 2000s
• Electronic Product Stewardship Canada - 2003
• Ontario Multi-Material Program in 2004 quickly followed by Quebec in 2005
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The Current Situation
• Over 50 product stewardship programs operating in Canada– Products include tires, pharmaceuticals, paint, used oil, beverage
containers, household hazardous waste, newspapers, printed paper
• Programs each operate under separate provincial legislation
• Collection mechanisms include return-to-retail, municipal recycling facilities, privately run depots and municipal blue box systems
• Funded through either visible consumer fees or producer levies, except in Ontario and Quebec where municipalities pay 50% of the cost
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Ontario and the Shared Responsibility Model
• Launched in 2004
• Multi-material program for printed paper, packaging, glass and plastics
• Industry and municipalities each pay 50% of provincial blue box costs
• Multi-stakeholder board oversees program with representation from industry, municipalities and other stakeholders
• Fees are fractions per unit in most cases making it impossible to use visible fees
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The Role of Retail in Product Stewardship
• Brand Owner– Private label
• First Importers– Identified as responsible parties under legislation– Must reach voluntary agreement with manufacturers
• Fee Collection– Charged by producers and passed on to consumers– Charged directly to consumers and remitted to stewardship agency
• Material Collection– Return-to-retail/closed loop
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The Problem(s) with Packaging
• Packaging is the number one priority for our members
• Excess or “over” packaging concerns have become flashpoints
for consumers and politicians
• Lack of reliable life-cycle analyses makes fact-based decisions
difficult
• Regulatory burden and cost is increasing exponentially:
• Potential cost of industry funding within the next three years– at
least $500 to $650 million (CCGD members - $75 to $90 million)
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The Current Battlegrounds
• Shared Responsibility Model vs. 100% Industry Funded
• Visible Fees vs. Design for the Environment
• Industry Boards vs. Multi-Stakeholder Boards
• Harmonization between Provinces
• Energy from Waste
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CCGD Principles for Stewardship
• Stewardship programs must not require mandatory return to store for waste or end of life materials.
• Stewardship programs must not make program policy and regulatory decisions in isolation, as the grocery industry is subject to other higher value regulations, such as food safety.
• Stewardship programs must support the lowest cost solution/models that responsibly meet aspirational goals of zero waste. Packaging for food is non-negotiable in food safety.
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CCGD Principles for Stewardship
• Stewardship programs will include a method for continuous improvement for processes to drive the most efficient cost of the entire system.
• Stewardship programs must hold all stakeholders, including municipalities, accountable, including standards of service, consistency of data collection, and reporting and consistency of material collection.
• Stewardship programs should not support in-kind contributions or de- minimus provisions.
• Stewardship models must be easy to administer and easy for consumers to access.
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CCGD Principles for Stewardship
• Stewardship programs should be harmonized across jurisdiction, administration, and material definitions to generate predictable and replicable practices.
• Industry must be allowed to choose the method of cost recovery of stewardship fees, including whether or not the fee is visible, to ensure transparency and accountability.
• Energy from waste is a viable and responsible waste management tool, so governments must include energy from waste in a provincial integrated waste management system.
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The Future of Product Stewardship in Canada
• Source Reduction for Packaging
• Organic Waste – Drive to expand composting capabilities nation wide
• Common standards for materials collected through the Blue Box
• Consolidation of Producer Responsibility Organizations (PROs)
• Increased acceptance of energy from waste
• Greater dialogue and cooperation between industry and government
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The Future
Source Renewal
Raw Materials
Packaging Product
Manufacture
Transport Distribution
Brand Owner
Collection infrastructure
Recycle Recovery
Secondary Markets
Source Renewable
Reduce Waste to Zero
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Contact CCGD
Allen Langdon
Vice-President, Western Canada & the Environment
604-637-1338