Change of direction for Coles

As one of the three big players in the supermarket space, Coles is always under the microscope – usually via headline-grabbing mainstream news, such as the furore surrounding its and Woolworths getting rid of single-use plastic bags, or criticism over its Little Shop plastic toys not being environmentally friendly.

It is something that the company is aware of and knows it needs to improve on. James Whittaker’s role as the company’s head of responsible sourcing and quality has many facets – ones that are increasing, shifting and malleable at the same time. Over the past decade, Coles has put a lot of effort into not only being seen to be doing the right thing, but actually doing it. He cites the company’s policies on cage-free eggs and RSPCA-certified chickens. Then there is its decision to stop using the aforementioned single-use plastic bags, as well as its more recent foray into utilising solar panels on its buildings, and implementing the more environmentally friendly LED lighting in many of its stores.

Addressing a packed room at the Australian Food and Grocery Council’s Sustainability Seminar at the Novotel in Sydney’s Olympic Park quadrant, Whittaker laid bare what the company is planning to do over the next few years. Not only in terms of sustainability but how it can change the public’s perception of what its whole corporate philosophy entails.

He first asked a question of the audience. “What does sustainability actually mean?” There were no takers, so he gave his interpretation.

“Sustain means to keep doing something for a period of time,” he said. “For example, I could run for an hour, maybe two. But I couldn’t do it for 24 hours.”

He then put his definition in context when it came to Coles’ business and how it approaches sustainability.

“We could continue to put petrochemicals [in the form of single-use plastic bags] in landfill,” he said. “We can do that for a period of time, but eventually the raw material is going to dry up and the landfill is going to become full and we won’t be able to do it anymore.”

Whittaker and his team knows that the public is becoming more discerning about the environment – part of the umbrella that sustainability falls under. This is why the company needs to start spruiking its ideas on the environment and sustainability more fervently. Although he feels it has been transparent when it comes to corporate responsibility, getting the message out hasn’t worked as well as it could have, said Whittaker.

“Last year, we did a study and talked to about 30,000 customers every week,” he said. “We wanted to see how customers perceived Coles. We think we are doing a great job because we have all these great initiatives, yet when we talked to customers they came back with ‘You’re all about down-down (ad campaign). You’re about cheap prices. You’re a big corporate giant’.

“We thought, ‘We’re doing all this stuff, but we are getting very little recognition for it’. We realised we needed to do things differently. This resulted in Coles working to build a new strategy, which was launched recently at our investor session.”

Part of this strategy included concentrating on driving the health agenda, especially when it comes to Coles’ home brands.

Whittaker said that the company’s mission statement is, “to feed all Australians to help them lead healthier, happy lives”.

As far as sustainability goes, he admits that Coles has made the odd mistake in the past, even when it’s had the best intentions.

“I think back to when we launched our Kids with Bananas program,” he said. “When the team developed the product we looked at how we would send the bananas out, so we wrapped them in plastic. They arrived in big cardboard boxes and we were pleased because we said, ‘We can do away with all of that cardboard, and we can take the smaller bananas and we can put them in the kids’ lunch boxes. And if you look at the lifecycle, we are using less packaging’. Of course, all the consumer saw were bananas wrapped in plastic. You can imagine what they thought of that.

“Now, we have committed to all our Own Brand packaging to being fully recyclable by 2020. The Redcycle program has been a key enabler for us. On top of that, we’re committed to the Australian Packaging Recycling Scheme. I think consumer confusion over labelling and what to do with that packaging is an issue that needs addressing.”

Whittaker said the company is setting itself a goal of being Australia’s most sustainable supermarket – in every way possible. It’s an ambitious goal, and one that he knows is going to be hard but also achievable.

“We usually focus on price and other elements, so this is really a change of direction,” he said. “What this means for us is to focus on something that differentiates us from other retailers. It’s going to take a lot of work and there are lots of elements in delivering that.

“But we do have three main pillars in place that are going to help get us there. The first is working towards sustainable communities. The second is to make sure we are supporting Australian farmers – so we have an Australian-first policy. Finally, we need to be a key contributor to the communities in which we operate.”

Another aspect the company is keen to highlight is the safety of the products that are on its shelves. Whittaker said that both safety and sustainability go hand in hand.

“We decided that safety had to be part of the sustainability drive, too. Because at the end of the day, if products aren’t safe then the sustainability of the business is affected,” he said. “Then there are sustainable environmental practices. And this is far reaching. This goes right the way through our store network, our fuel business and working with our suppliers.”

And what about carbon emissions? This is something that the company has not taken for granted, and it has sought to identify where most of the emissions are coming from in its business. They have identified the main causes – now it’s a matter of putting in place policies that will address those issues.

“I was looking at some data early this week and found that 97 per cent of the carbon emissions that we produce are coming from our supply chain,” he said. “While we can do some of these changes ourselves, we also have to make sure we are working with the right partners and the right industries.”

And the transparency part of its new strategy?

“My team is committed to transparency. This is an important point. We are building our software solutions to be able to understand where all our products are coming from,” he said. “Take our Graze product, which is grass-fed beef – we have line-of-sight of all the livestock producers, and what that allows us to do is gather a lot of information about best farming practices. For example, our Graze beef producers have planted three million trees since the program began. That kind of information is very powerful.”

Time will be the measure of how successful Coles’ new strategy pans out, but in the meantime Whittaker knows what the endgame needs to be.

“We are hoping that it will change the way we think about business and about how our team members and our customers see us.”