Module 1 – So you want to change the food system
5. Creating a sustainable business
With this guide, we’re trying to help you put your agrifood startup on the path to success both from a business and impact perspective. To contribute to a better food system and to build a truly sustainable business, it’s important to embed those aspects in your business from day one. So, what things do you need to know about whilst creating a sustainable business and why does it matter in the first place?
Why should you create a sustainable business?
We all need to eat but our current food system is putting a massive strain on the planet. In fact, it contributes 19%–29% of global anthropogenic greenhouse gas (GHG) emissions (Vermeulen, Campbell and Ingram, 2012). Food production takes up a considerable amount of resources, such as nutrients, land area, energy and water, so we should make sure those resources are used for making products that provide real value and improve people’s lives whilst not putting unnecessary strain on the planet.
Agriculture contributes to climate change through GHG emissions and reduction of carbon storage in vegetation and soil. Locally, agriculture reduces biodiversity and affects natural habitats through land conversion, eutrophication, pesticide inputs, irrigation and drainage. Unsustainable agricultural practices may also lead to direct environmental feedbacks such as soil erosion and loss of pollinators (because of excessive pesticide application). (European Environment Agency, 2012).
Today the challenges are different. According to the World Health Organisation, worldwide obesity has nearly tripled since 1975. In 2016, 39% of adults aged 18 years and over were overweight in 2016, and 13% were obese. Obesity is linked to cardiovascular problems, diabetes and cancer. It is a growing epidemic and can be prevented through better diets and lifestyles. Whilst availability of calories is no longer an issue in many parts of the world, quality nutrition is. A growing body of research suggests a link between highly processed food and adverse health outcomes. We’re routinely exposed to high levels of sugar, salt and fat to the detriment of our collective health.
The social impact of our food system is not limited to nutrition. There are a wide range of issues such as low pay/forced labour, the acceptability of innovation (e.g.: GMOs) and many others that also need consideration.
We don’t need more food businesses; we need more sustainable food businesses.
Picking your battles
Whilst being a sustainable business entails a holistic approach where environmental and social impacts are considered throughout every aspect of the business, it’s also worth picking your battles. As a startup, you simply cannot address everything at once and you will need to make compromises. Once you look at sustainability issues, you often find it’s a whole system that is not working properly and you can be tempted to fix it all. But remember, you’re only a small player in a much bigger game so you must focus your efforts carefully.
Your business can’t solve every problem from the start. Have a clear vision of where you want to get to from a sustainability perspective and work towards that vision in line with your business capabilities. Doing things differently (for instance, employing people from disadvantaged backgrounds, using a new type of packaging or manufacturing process) requires a lot of patience and grit. You’re going against traditional embedded business processes, so it makes sense that as a startup with limited resources, you can’t do it all at once. Pick your core mission, nail that and as you grow, build on that where you can.
It’s also worth noting that once you put sustainability claims out there, people will be inclined to scrutinise everything you do. Most will be supportive but there will always be those who pick on the one aspect you haven’t figured out yet. That’s ok. Be prepared for those occasions by knowing why you’ve made certain decisions and knowing where you’re trying to get to.
On creating a mission-led business
“The advice I’d give to aspiring mission-driven entrepreneurs is not to fall in love with a specific important mission at the start, but to fall in love with the general idea of building a business to solve an important mission. Just like with the rest of the business, you’ll never know upfront what your investigations will uncover.”
-Tom Simmons, Founder and CEO of Cambridge Glycoscience
The value of sustainability in creating your brand
Beyond doing the right thing, embedding sustainability from the onset has many business advantages:
- Consumers care: more and more studies show that consumers want to choose products that are positive for the environment and society (at least when they’re asked about it). A 2017 Unilever global consumer study found an over “$1 trillion market opportunity for brands that can effectively and transparently market the sustainability of their wares.” (sustainablebrands.com)
- Business customers care: most companies have sustainability targets to meet (in fact, the EU requires large companies to report on the social and environmental impact of their activities) so they are increasingly looking to work with suppliers and partners who can help them fulfill these.
This is a great opportunity for startups. - Positive differentiation in the marketplace: positive impact provides a marketing angle that can help you stand out from competition, especially more established businesses. As you create a positive impact, the media will want to talk about what you do and communities around you will be interested. Sustainability can also help you create loyalty as you help others contribute to things they care about or think are important.
- Attracting a motivated and committed team: people like working for mission-driven businesses. Recent surveys have shown that millennials want companies that strive for more than just making money and that it’s a key motivator when they’re looking for work. (forbes.com).
- It’s a market reality: past but not least, growing resource scarcity means that if you can produce in more efficient ways, you’ll be less vulnerable to market forces that affect your operations as our
world changes.
If you want to skip ahead to read more about the value of sustainability in your business, head over to chapter 7 where we talk about measuring and communicating your impact.
“The thing that excites me most about being an entrepreneur is the fact that one person is able to take a problem into their own hands and do something about it. I came up with an idea that could benefit society and felt it was my duty to make it a reality.”
-Solveiga Pakštaitė, Co-Founder at Mimica Touch