Green Memo: Interview - Coca-Cola CEO John Brock Says Sustainability is No Longer 'Niche'

In an interview published in Knowledge@Warton, an online publication of the University of Pennsylvania's Wharton School of Business, Coca-Cola Enterprises CEO John Brock talks about his push to "green" the giant beverage bottler, marketer and distributor.

Environmental sustainability is "absolutely key" to the strategy of Coca-Cola Enterprises. "It's center of play. It's not niche anymore," Brock tells the interviewers.

Coca-Cola Enterprises is the world's largest marketer, producer and distributor of Coca-Cola products. It has operations in 46 U.S. states and Canada, and is the exclusive Coca-Cola bottler for all of Belgium, France, the United Kingdom, Luxembourg, Monaco and the Netherlands. It's sales represent 18 percent of The Coca-Cola Company's worldwide volume. Coca-Cola Enterprises isn't to be confused with Coca-Cola Company, which is a separate corporate entity.

In June of this year, Natural~Specialty Foods Memo reported on and wrote about one of Coca-Cola Enterprises' new"green" efforts, this one in the transportation sector. In this piece [Green Transportation Memo: Coca-Cola Enterprises, Inc. to Go Green; Plans to Add 142 Hybrid Electric Delivery Trucks to its North American Fleet] we wrote about Coke Enterprises' plans to buy 142 hybrid- electric delivery trucks, the start of what the company said would be an eventual conversion of its entire diesel fuel-powered North American delivery truck fleet to 100% hybrid-electric.

In the Wharton interview, CEO Brock says Coca-Cola Enterprises has now purchased all 142 of those hybrid-electric delivery trucks -- and plans on buying more.

The hybrid-electric trucks, custom built for the company, use 35% less fuel and produce about 35% less emissions than conventional diesel fuel-only powered delivery trucks do. They also cost the company about 45% more than the conventional trucks, according to Brock.

Brock appears to be big on the hybrid-electric delivery trucks though, as you can read in the Wharton interview, despite the significantly higher upfront cost.

Part of his glee has to do with the fact -- despite the per-gallon cost of diesel fuel having decreased considerably over the last couple months (it will go back up) -- that with the high price of diesel fuel being pretty much a constant, he knows the hybrid-electric trucks will pay for themselves over time. [The reduced carbon emissions also will come in handy in the event the U.S. Congress passes carbon cap-and-trade legislation in 2009, which is something a majority of Democrats, President-elect Barack Obama, and some Republicans support.]

In the Wharton interview, CEO Brock also addresses a number of other environmental issues, including recycling and what the beverage giant is doing in that regard, since it is one of the biggest users of plastic packaging in the world.

In the interview piece, the chief executive of Coca-Cola Enterprises also discusses corn -- and its soaring cost -- which is used to make Fructose corn syrup, the current sweetener of choice in the bottler's carbonated beverage brands, including its flagship Coke. He also touches on the "green" issues of packaging reusability, climate change, energy conservation and other related sustainability issues.

You can read the Wharton interview with Coca-Cola Enterprises CEO John Brock here.

Green Retailing Memo: Wal-Mart Stores, Inc. to Make Major Purchase of Renewable Wind-Power to Supply 15% of the Power For its 360 Stores in Texas, USA

As we wrote about in this piece yesterday, "Retail Memo: Wal-Mart CEO Steps Down; Head of International Operations Mike Duke to Lead Retail Giant; USA Chief Castro-Wright Promoted," current Wal-Mart Stores, Inc. CEO Lee Scott stepped down on Friday, deciding to retire after three decades with the world's largest corporation and global retailer, including serving in the top spot as CEO for the last nine years.

Scott isn't leaving Wal-Mart completely however; or right away: He will be head of the company's executive board and serve as a consultant to Duke and the board until 2011, according to the company.

Wal-Mart's head of global operations, Mike Duke, will take over as the company's CEO in February, 2009, Wal-Mart announced yesterday. In addition, current Wal-Mart USA CEO Eduardo Castro-Wright was promoted on Friday to the position of vice chairman of Wal-Mart Stores, Inc., which is a strong indication he is in line to be CEO as part of the retailer's internal succession planning process.

On Thursday we wrote about two major corporate social policy initiatives outgoing (nobody knew he was outgoing on Thursday by the way) CEO Lee Scott made and Wal-Mart announced that day. Those two major initiatives are:

>A $2.5 billion donation to Feeding America (formerly America's Second Harvest Food Bank), along with a promise by Wal-Mart to donate 90,000 pounds (70 million meals) each year to the group that supplies food to organizations assisting the hungry throughout the United States for the next couple years;

>Guaranteeing a $12.5 million letter of credit to the group planning to build a memorial to the late civil rights leader martin Luther King Jr. on the National Mall in Washington DC USA.

Read our two stories from Thursday, November 20 at the links below:

~November 20, 2008: Food Retailing & Society Memo: Wal-Mart Steps in; Gives $12.5 Million Line of Credit to Group Trying to Secure Funding to Build King Memorial

~November 20, 2008: Food Retailing & Society Memo: Wal-Mart Donates $2.5 Million to 'Feeding America;' Will Also Give 90 Million Pounds of Food A Year to the Organization

Also on Thursday, Wal-Mart Stores, Inc. announced it would make the single-largest purchase of renewable wind energy by any U.S. corporation.

Wal-Mart said it will buy enough wind power from Duke Energy Co. to supply up to 15% of the retailer's total energy load in approximately 360 Texas stores and other facilities. The renewable energy will come from a Duke Energy wind farm under construction in Notrees, Texas, and is expected to begin producing electricity for Wal-Mart by April of 2009.

The project will provide roughly 226 million kilowatt-hours (kWh) of renewable power each year or the energy equivalent of washing 108 million loads of laundry -- enough for every household in Austin, Texas to do laundry for a year, the company said.

Texas currently is the leading wind power-producing state in the U.S. The new project by Duke Energy will solidify the state's position. Additionally, former oil barron T. Boone Pickens is planning a multi-billion dollar wind farm initiative, which would include major wind farms in Texas, as part of his "Pickens Plan" renewable energy initiative for the U.S.

One of Lee Scott's major initiatives during his nine years as head of Wal-Mart has been environmental sustainability. He's pushed suppliers to decrease product packaging sizes, launched "green" retailing initiatives across Wal-Mart's logistics system and stores, introduced "green" products under the retailer's store brands, pushed energy efficiency initiatives and numerous other programs that fall under the sustainability category.

It appears he wants to go out with a "green retailing" bang between now and when he leaves his CEO's office at the end of January, 2009.

Wal-Mart's wind power buy from Duke Energy is important in the larger, macro scale for wind power because its an endorsement in the U.S. of the renewable energy source by the nation's and world's largest corporation and retailer. The company's move will likely result in other corporations and retailers in Texas buying into the huge wind farm project being built by Duke Energy in the state.

A number of publications have written about Wal-Mart's major, new wind power initiative in Texas. Below is a sampling of those stories:

[CNN-Money: Wal-Mart To Buy Wind Power From Duke Energy For Texas Stores...Dallas, Morning News, Dallas, Texas: Wal-Mart buying power from wind farm...Associated Press: Wal-Mart buys wind energy supply...Wall Street Journal Business Blog: Wal-Mart: Wind Power’s Good for the Bottom Line, Even With Cheaper Gas ...Austin-American Statesman, Austin, Texas: Wal-Mart buying wind power for Texas stores...Houston Press, Houston, Texas: Wal-Mart Turns To Wind Power, A Little...

The Morning News-Arkansas: Wal-Mart Pushes Wind Power...Energy Matters, Australia: Wal-Mart Gets Into Wind Power...Clean Energy Update, New York, NY: Wal-Mart Makes Major Commitment to Renewable Wind Power...Environmental Leader: Wal-Mart To Buy 226 M kWh Wind Energy To Help Power 350+ Stores...Wal-Mart Stores, Inc. press release: Texas Wal-Marts go green with wind power.]

Our sources tell us CEO Lee Scott has a few more corporate social policy and environmental retailing surprises up his sleeve, which the company will announce before he turns over his CEO's office to Mike Duke at the end of January, 2009. If they are on the order of the three announcements we've written about -- all three announced by the company on Thursday, November 20 -- it should be an interesting remaining two months in 'Wal-Mart World.'

As the CEO of a $400,000 billion a year global corporation and retail empire, it appears Lee Scott, like a President or head of state does, also wants to leave a legacy. It appears he also wants to set a tone for the new, incoming CEO of a Wal-Mart Stores, Inc. that maintains its heavy involvement in corporate social programs and "green retailing" initiatives, both of which are needed even more strongly now in the current global recession and environmental and energy crisis than they were even before.

Retail Memo: Wal-Mart CEO Lee Scott to Conference Attendees: 'We Are Not Green'

Wal-Mart CEO Lee Scott, who has spent a great deal of his executive time the last few years touting the Bentonville, Arkansas-based mega-retailer's environmental initiatives, policies and commitments, told a group of people this morning at the ECO:nomics conference in Goleta, California that "We (Wal-Mart) are not green."

Scott, in response to a question by a conference participant, who asked the Wal-Mart chief how he could reconcile why the international retailer's carbon emissions were continuing to grow despite his stated commitment to reduce the chain's carbon footprint, declared flatly: "Wal-Mart is trying (to reduce it's carbon footprint), but we also need to grow at the same time." Scott further added: "I haven't a clue," when asked when he thought Wal-Mart would meet his goal of having zero waste and 100% renewable energy-powered stores and other operations over time.

Scott didn't elaborate on or further define what he means when he says "We (Wal-Mart) are not green. But we accept him at his word that the retailer is not a "green" retailer, despite the fact that much of its policy initiatives and environmental activity over the past few years seemed to indicate that was the message the world's largest company and retailer was attempting to convey to the investing, selling and consuming world.

But, to Scott's credit in terms of consistency, we've heard him make similar statements at more than one conference in the last two years. We have never heard Scott claim Wal-Mart is "green." Rather, we have heard him say it's his goal to be a better company from an environmental perspective. But, again, the green retailing implication has always been there in the company's initiatives and public relations activities--so Scott's words and Wal-Mart's corporate green policy and messaging are somewhat in conflict in our analysis.

At this morning's conference, Scott did say he believes Wal-Mart is making great strides to be a "greener" company and retailer. (Maybe that's why he says Wal-Mart isn't green? Rather, maybe he believes it's a work in progress? That is more honest. It's also safer of course. Perhaps all of the company's PR materials should carry CEO Scott's "We are not green" statement as a disclaimer from now on?)

Scott talked about the company's green packaging vendor initiative designed to reduce the amounts of plastic and cardboard in the products Wal-Mart buys from its thousands of suppliers. The retailer has introduced an environmental packaging scorecard in which its vendors will have to eventually reduce the amount of plastics and cardboard in the products they sell to Wal-Mart by at least 25%. Scott also said the retailer is looking particularly hard at ways to reduce the amount of plastic that goes into producing a bottle of bottled water.

Towards the end of Scott's talk he gave a clearer idea as to what he meant by his "We (Wal-Mart) are not green" statement. He told the conference attendees the primary motivation behind all of the retailer's environmental initiatives "isn't just to please environmentalists, but more to save money."

"It really is about how you take cost out, which is waste. The (cost) savings by taking out wasted material helps keep prices low for Wal-Mart customers, many who live paycheck to paycheck," Scott added.

He said contrary to what some people might think, the current economic downturn in the United States is actually serving as an incentive which is prodding Wal-Mart to accelerate its waste reduction program and similar environmental initiatives designed to cut waste and thus take costs out of the system.

Some conference participants and journalists were surprised by Scott's candid statement that We are not green," along with his flatly-stated premise that the bottom line is the bottom line.

We aren't surprised however. We have suggested all along in piece after piece here at Natural~Specialty Foods Memo that Scott's, and thus Wal-Mart's, bottom line in terms of its green retailing initiatives and policies has been just that: the company's bottom line. That's what public companies in a free-market economy do; they try to maximize profit and attempt to keep all of their stakeholders as happy as they can.

We have further argued we would much rather have Wal-Mart aggressively pursuing positive environmental initiatives as part of its corporate bottom line than not. Further, we argue the retailer has a major responsibility to do so as the world's (and United States') largest corporation and retailer. And, if you do a search on the blog, you will see we have been extremely critical of Wal-Mart at times.

We've also been positive in the main about the retailer's environmental initiatives, although we have called for (and continue to do so) Wal-Mart to lead more, which they started doing last year. We've also suggested strongly there is no going back in terms of green issues for the retailer.

We believe it's imperative though that Wal-Mart better figure out a way to reduce its carbon footprint as it continues to grow. CEO Scott knows very well achieving both goals are not mutually exclusive, despite eluding a bit to such a false dichotomy in one of his answers this morning at the environment and economics conference.

So, Lee Scott's "We are not green" and corporate bottom line primacy statements neither surprise us nor do they make us think the retailer is merely engaging in greenwashing. We do strongly suggest though that a failure to keep walking the green walk after having come this far--and rather relying on public relations to carry the day from here on out--will likely result in a serious backlash against Wal-Mart from many of its stakeholders.

Not only would that be sad from an environmental perspective--it also would have a negative impact on the mega-retailer's corporate bottom line. Being green is now a line item on every corporate CEO's P&L statement, which is something Lee Scott knows. Right Mr. Scott?

Green Retailing Memo: United Kingdom's Sainsbury's Plans to Power Store With New, High-Tech Wind Turbines

The United Kingdom's second-largest grocery chain, Sainsbury's, plans to erect three high-tech wind turbines in the parking lot of its proposed supermarket in the town of Westhoughton, which is located in Greater Manchester, England, if it can get approval from the local planning authorities.

The wind turbines would stand about 30 -to- 45 feet tall. Sainsbury's plan is to locate them in the parking lot of the proposed Westhaughton supermarket. [The artist's rendering at the top of the page shows one of the turbines at the front, far right, next to the orange and blue sign.]

The site for the proposed, partially wind-powered new Sainsbury's supermarket, is on the grounds of the Westhoughton Cricket Club. The 70 year old Cricket Club would be demolished by Sainsbury's to built its new, high-tech wind-powered supermarket. The Cricket Club plans to move to a new home not far away, as it says it needs a more modern facility.

The modernistic-looking wind turbines Sainsbury's hopes to be able to install in the proposed stores' parking lot are called 'QR5" turbines, and made by a company called Quiet Revolution Limited. They are a new generation of wind turbine, designed to be faster, quieter and to cause far less vibrations than a traditional model.

According to Quiet Revolution Limited, each turbine costs 25,000 euros and provides 10% of the energy for a 600 square meter commercial building. The new-age turbines also save a considerable amount of carbon dioxide emissions annually since they are a renewable energy source.

Sainsbury's hopes the three stainless steel wine turbines can provide the proposed supermarket with as much as 30% of its total energy needs. Since the wind energy is renewable, not only will the store have a dramatically-reduced carbon footprint and conserve fossil fuel-based energy, but it should also provide the retailer with a substantial reduction in its monthly energy bill for the Westhoughton supermarket.

Westhoughton was once a major coal mining town. In fact, the community has the distinction of once hosting one of the worse coal mining disasters in the UK. In December, 1920, 344 men and boys lost their lives in a cave-in at the Pretoria Pit coal mine. British historians say it was the third-worse coal mine disaster in the UK's history.

Having a new supermarket powered in part by renewable wind power in the town would not only show respect for the community's energy producing history and heritage, it also would demonstrate progress. The partially wind turbine-powered supermarket could stand as an example of the slow but sure progression the world is making from dirty fossil fuels to cleaner alternatives, like wind, solar, biomass and other forms of renewable energy.

We urge the town of Westhoughton to approve the new-age wind turbines despite the complaints of some in the community regarding their aesthetics. We believe they actually are aesthetically pleasing to look at. The sleek turbines even make a statement, like all good art should.

That statement: 'progress through renewable energy globally.' The turbine's design--minimalist and sleek, reaching towards the sky--symbolizes progress. The constant turning of the three turbines' blades by the wind demonstrates daily the power of mother nature to supply energy. And, the turbines' location in the parking lot, which will be filled with fossil fuel-powered automobiles, is a constant reminder to all that it's time to find alternatives to oil.

Green Memo: Greed in the Name of Green

Editor's Note: Green or environmental consumerism is one of the fastest-growing trends globally. It includes buying natural, organic, sustainable and locally-grown foods, for example.

Green consumers also are looking to shop at retailer's who conserve energy, offer "green" products for sale in their stores, and decrease their own carbon footprints as a business entity.

In terms of the products they buy, green consumers want goods that are 100% recyclable and made from recycled materials. Green shoppers also want energy efficient products, less packaging and other eco-friendly product attributes in the foods, grocery products, hard goods and other products they purchase.

Of course, green or environmental consumerism isn't without its challenges, conflicts and even contradictions. This also is true for grocery product manufacturers, marketers and retailers who are increasingly producing, marketing and selling "green" or sustainable products.

Like Kermit The Frog says: "It isn't easy being green."

Washington Post staff writer Monica Hesse has an article in today's addition of the publication in which she analyzes and discusses a number of aspects of green consumerism and the challenges and conflicts it poses. As our readers know, we don't often run pieces by others. However, we read Ms. Hesse's story early this morning and wanted to bring it to you, as we think it offers some interesting insights.

The article begins below. Then, to read the rest of it, just click on the link provided.

Greed In the Name Of Green
To Worshipers of Consumption: Spending Won't Save the Earth

By: Monica Hesse
Washington Post Staff Writer
Wednesday, March 5, 2008

Congregation of the church of the Holy Organic, let us buy.

Let us buy Anna Sova Luxury Organics Turkish towels, 900 grams per square meter, $58 apiece. Let us buy the eco-friendly 600-thread-count bed sheets, milled in Switzerland with U.S. cotton, $570 for queen-size.

Let us purge our closets of those sinful synthetics, purify ourselves in the flame of the soy candle at the altar of the immaculate Earth Weave rug, and let us buy, buy, buy until we are whipped into a beatific froth of free-range fulfillment.

And let us never consider the other organic option -- not buying -- because the new green consumer wants to consume, to be more celadon than emerald, in the right color family but muted, without all the hand-me-down baby clothes and out-of-date carpet.

There was a time, and it was pre-Al Gore, when buying organic meant eggs and tomatoes, Whole Foods and farmer's markets. But in the past two years, the word has seeped out of the supermarket and into the home store, into the vacation industry, into the Wal-Mart. Almost three-quarters of the U.S. population buys organic products at least occasionally; between 2005 and 2006 the sale of organic non-food items increased 26 percent, from $744 million to $938 million, according to the Organic Trade Association.

Green is the new black, carbon is the new kryptonite, blah blah blah. The privileged eco-friendly American realized long ago that SUVs were Death Stars; now we see that our gas-only Lexus is one, too. Best replace it with a 2008 LS 600 hybrid for $104,000 (it actually gets fewer miles per gallon than some traditional makes, but, see, it is a hybrid). Accessorize the interior with an organic Sherpa car seat cover for only $119.99.

Consuming until you're squeaky green. It feels so good. It looks so good. It feels so good to look so good, which is why conspicuousness is key.

These countertops are pressed paper. Have I shown you my recycled platinum engagement ring?

In the past two weeks, our inbox has runneth over with giddily organic products: There's the 100 percent Organic Solana Swaddle Wrap, designed to replace baby blankets we did not even know were evil. There's the Valentine's pitch, "Forget Red -- The color of love this season is Green!" It is advertising a water filter. There are the all-natural wasabi-covered goji berries, $30 for a snack six-pack, representing "a rare feat for wasabi."

There is the rebirth of Organic Style magazine, now only online but still as fashionable as ever, with a shopping section devoted to organic jewelry, organic pet bedding, organic garden decor, which apparently means more than "flowers" and "dirt."

Read the rest of Ms. Hesse's Washington Post piece 'Greed in the Name of Green,' here.

Editor's Addendum: Additionally, the Washington Post featured Leslie Garrette, the author of the popular book "The Virtuous Consumer" which is about the growing "green" or environmental consumer movement, in an online chat this afternoon.

Ms. Garrett discussed the challenges and conflicts people, businesses and organizations can face in trying to buy green, as well as in saving the environment. The Washington Post has a transcript of the online chat this afternoon here. The discussion offers some interesting consumer insight about green consumerism and related issues. We suggest you read Ms. Hesse's article first, then read the transcript from this afternoon's online chat over at the Washington Post.

The story by Ms. Hesse and the online discussion with Leslie Garrett are good consumer intelligence pieces for anybody in the food and grocery industry, as well as in business in general. They also should be of interest to all of us as citizens of our respective countries as well.

Note: The graphic at top is by Roger Chouinard.