Supply-Side Memo: Food Industry Giant H. J. Heinz Co. to Launch New Energy Conservation, Alternative Energy and Greenhouse Gas-Reduction Program

Natural~Specialty Foods Memo Editor's Note: Pittsburg, Pennsylvania USA-based H.J. Heinz Co., one of the world's biggest international food companies as well as a major player in the natural and organic foods industry and specialty foods sector, plans to reduce the amount of greenhouse gases it produces company-wide by 20% by 2015, according to the report below from today's Pittsburgh Tribune Review, a daily newspaper in the food company's hometown.

Although a 20% carbon footprint reduction over the next seven years doesn't sound like much, one has to consider how difficult it is to make such changes in a giant, global supply chain system such as the one H.J. Heinz operates.

Further, the fact the giant food company plans to rely on alternative energy for 15% of its total energy needs by 2015 is a pretty big deal.

Could companies like H.J. Heinz do more, such as shoot for say a 35% carbon reduction over the next seven years? We think so. However, it's a mistake to discount the giant food company's 20% reduction goal, as 20% of the total carbon output--not top mention the energy savings which will be a result of such a reduction--is a big deal.

Even more important is the company's leadership role. H.J. Heinz is a global food manufacturing industry leader and we expect other companies its size who've yet to announce similar initiatives to take notice of what Heinz is doing.

The report by Pittsburgh Tribune-Review staff writer Rick Stouffer sumarizes the steps H.J Heinz says it will take and the programs it will implement in order to achieve its 20% reduction in carbon footprint by 2015:

Heinz launches effort to cut waste, energy use

By Rick Stouffer

PITTSBURGH TRIBUNE-REVIEW,

Tuesday, May 27, 2008

The H.J. Heinz Co. today announced a goal to reduce greenhouse gases by 20 percent by 2015, part of what the company calls its sustainability vision to maintain the health of people, the planet and the company.

From using potato peels to generate energy, to reducing the amount of our packaging, every day we're finding new ways to reduce the environmental footprint and improve the efficiency of our company," CEO William Johnson said.

To achieve its goal, Heinz will focus:

• Reducing energy consumption by 20 percent through improved operations.

• Reducing packaging by 15 percent through the use of alternative materials and reductions in existing packaging.

• A 10 percent reduction in transportation by improving its distribution network. By transporting fuller trailers with more direct routes and using more rail transportation, Heinz expects to save more than 2 million gallons of fuel globally each year.

• Mandating that 15 percent of all energy used comes from renewable sources, such as solar, biomass and biogas.

At the Heinz facility in Ontario, Ore., the company is developing a process to convert potato peels into biofuel, which then will be distributed to a natural gas pipeline for sale and distribution. The project is expected to generate enough fuel to heat 4,000 homes.

• In its agricultural operations, Heinz projects a 15 percent cut in greenhouse gases, a 15 reduction in water usage, and increasing by 5 percent tomato yields by using hybrid seeds that require less water, fertilizer, pesticides and fuel to harvest.

• A 20 percent reduction in water usage through reuse and improved sanitation.

• A 20 percent reduction in solid waste by increased recycling and waste reuse