The significant role of supermarket retailers in securing responsible animal proteins and sustainable alternative proteins
1. Food retailers, particularly supermarkets, play an important role in guiding the transition towards responsible animal proteins and sustainable alternative proteins through their policies on sourcing and distribution.
2. Responsible policies and sourcing practices assist retailers in boosting their sustainability reputation and performance. They should be aligned with the company’s sustainability management strategy and openly communicated to investors, consumers, and other stakeholders.
3. A successful protein transition would ensure protein security while effectively mitigating the risks from animal welfare violations, climate change, deforestation, biodiversity loss, water scarcity, and antimicrobial resistance.
In ARE’s Charting Asia’s Protein Journey report (2018), Asia’s demand for meat and seafood was projected to increase by 78% between 2017 and 2050. The trend of rising demand is set to be dominated by population growth, rising incomes, and higher urbanisation rates and is likely to be provided by increased industrial farming. If this system of protein production remains unchanged, the dramatic increase in protein demand would inevitably raise the associated risks from animal welfare violations, GHG emissions, land and water use, and antimicrobial usage by the same proportion. These concerns have driven some consumers to be more selective of their diets, and at the same time, shifted attention towards higher-welfare animal products and plant-based alternatives.
In Asia, the conversation around higher-welfare and plant-based products traditionally revolved around the supply side, particularly in Thailand: some producers and manufacturers are improving and expanding the range and accessibility of these products, after recognising the opportunities behind this fundamental shift in consumer preferences. Certification bodies, industry groups, and regulators have made some progress in advancing minimum production standards for animal welfare and product labelling guidelines for consumer protection. In 2021, Thailand’s Department of Livestock Development launched its official cage-free standards in response to interest and input from Thai egg producers to meet evolving retail demand[1]. Independent certification schemes, such as Certified Humane, have some higher standards, cover a range of species, and are being used more in Asia.
While efforts made by these players to meet consumer demands deserve public attention and commendation, an unfortunate consequence has been the neglect of Asian food retailers and their role in driving the transition towards a sustainable protein future. ARE’s baseline benchmark of Asian protein buyers (2021) found that the vast majority of companies do not acknowledge the most prominent risks in animal protein sourcing. Only 13% acknowledged antibiotic overuse as a risk, 11% of the companies acknowledged animal welfare risks, and none addressed deforestation risks in the supply chain related to animal feed production. Where discussion on these areas was present, it was limited to avoiding antibiotic residues, very basic welfare standards, and palm oil deforestation, missing major protein sustainability opportunities.
Systemic change withi n the protein system requires collaboration from both producers and retailers.
We have developed a simple and intuitive scorecard for comparing the performance of supermarkets in their integration of higher-welfare and plant-based products. The questions fall under categories of availability, pricing, placement, and labelling which are shown to be key criteria to consumer choice. The following data is from our 2022 assessment of the major supermarkets in Bangkok.
Despite conducting various initiatives to reduce energy consumption from store operations or to minimise the usage of plastic bags, most supermarkets have yet to actively pursue higher-welfare and plant-based products as part of their efforts to mitigate impacts on climate change and biodiversity. Most of the harmful impacts in GHG emissions, land use, and water use occur in the animal production stage, so adopting plant-based and higher-welfare products can generate more significant effects across a wide range of impacts. Additionally, risks from farm animal welfare and antimicrobial usage have been left squarely out of the picture. Despite some commitments made by Thai retailers to phase out caged eggs and mother pig pregnancy crates[2], the overall progress of Asian retailers lags behind leading multinational retailers[3]. Even where commitments have been announced, most companies have not developed a disclosure process with sufficient reporting details on progress towards their commitment[4].
Higher supply costs and uncertain consumer demand are often cited as the rationale for excluding higher-welfare and plant-based products from their stores, though not always the reality. Consumers’ preferences are quickly shifting and cannot be gauged precisely, particularly if these alternative products are not available for them to make a choice. Retailers should be proactive and help futureproof their own sustainability performance, not rely on a static outlook of the landscape and a passive approach towards responsible and sustainable protein offerings.
Supermarkets have an important role as the intermediary between producers/manufacturers and consumers. Making these products available in their stores is the first step, but retailers can go further in influencing consumers’ purchasing decisions. Retailers are best positioned to gather consumers’ preferences from their purchasing decisions. However, this is not a passive process of tracking and reacting. Featured product promotions and placement within the store format, and selection of topics for supplier engagement, are the results of deliberate decisions, and these decisions ultimately influence consumers’ awareness and understanding of these products, as well as the supermarket’s sustainability profile.
Engaging suppliers and building consumer awareness goes a long way, beyond the provision of these products in retail stores.
The placement of these products, whether it is beside their conventional (lower-welfare or animal protein) counterpart, is another key factor to take note of, particularly for plant-based proteins. Recently emerging protein alternatives are targeted at meat eaters and flexitarians aspiring to replace meat consumption with plant-based alternatives. This was reinforced by a finding that 98% of consumers who purchase plant-based meat also purchase animal meat[5]. When placed beside their animal meat counterpart, plant-based meats are more likely to be noticed by their target audience. A 2019 report by FMI, The Food Industry Association also showed that this integrated-shelving strategy may also be more popular with most consumers who prefer to shop for plant-based meat in the meat or frozen section[6].
Another action that retailers can take is to engage and support their suppliers on these topics. This is especially so for larger buyers with greater bargaining power to make demands on long-term supply volume and appropriate product labelling and promotion. Independent certification of higher-welfare claims significantly increases consumers’ trust and demand for these products. The operator should relay this signal and encourage the supplier to obtain independent certification for its higher-welfare claims, as this also invites value-add and premiums. This applies for general product labelling as well: where products could be more appropriately and transparently labelled to inform consumers of the actual production system and sustainability footprint of various products.
To conclude, Asian retailers should recognise their key role in the protein transition and collaborate with producers to deliver responsible and sustainable proteins at scale while effectively mitigating risks in animal welfare violations, climate change, deforestation, and other impacts. It is undoubtedly a massive challenge to set appropriate policies and commitments across a wide range of topics with a wider range of stakeholder considerations. Recognising this, the Asia Protein Transition Platform launched the investor expected disclosures guide and recommended goals to assist companies in outlining this pathway, along with a self-assessment questionnaire for companies to benchmark themselves. The Platform will continue to offer support to Asia’s listed food companies on their journey towards the 2030 Protein Transition Vision, through its engagements and by publishing meaningful content, such as this scorecard exercise, for relevant decision-makers.
Acknowledgements:
We intend to conduct this exercise for more supermarket chains across key Asian hubs. The scale of our ambition exceeds our limited capacity, and we are grateful for partners in the region who have assisted or are currently assisting us in the process of data collection. For this particular assessment of supermarket chains in Bangkok, we are fortunate to have received in kind support from World Animal Protection in providing contextual knowledge of the market, which has proven invaluable.