By Treena Hein
In Part One of this two-part series, we looked at certification programs
now available to Canadian growers, participation levels and some of the
differences among programs.
In Part One of this two-part series, we looked at certification programs now available to Canadian growers, participation levels and some of the differences among programs.
|SCS auditor, Dr. Michael Keyes, surveys a greenhouse in Leamington, Ont.
This month we will look closely at savings that stem from becoming certified and cost return. We will also consider marketing strategies – checking in again on these angles with two Canadian operations that have become certified.
The process of getting certified inherently involves a close examination of input costs, but just how much costs are reduced – and what the return on investment timeline will be – varies among each greenhouse operation for a variety of reasons, says John Harrington, communications manager for Oregon-based Food Alliance (FA), a group that has offered a ‘Nursery and Greenhouse Standard’ since May 2012.
“We do not require specific mandatory improvements,” he notes “but rather, make a variety of recommendations which an operation may choose from, based on what makes the most sense for their unique situation. Operational efficiency improvements and related cost savings … [therefore] depend entirely on what an operation currently has in place and the changes they choose to invest in.”
Dr. Michael Keyes says operational production decisions and market conditions are the two key factors in how quickly ROI can be realized with the two programs his firm (SCS) offers: Veriflora and “Certified Greenhouse Farmers.”
Keyes is the principal auditor of both certifications, and a senior agricultural and natural resources specialist in SCS’s food and agriculture division.
WORKING TO COMPILE THE DATA ON SAVINGS
■ While international certification firm MPS asserts that its participants benefit from using less energy, water, crop protection agents and fertilizer, it doesn’t have complete statistics available. However, western U.S.A. MPS spokesperson Charlotte Smit says, that among certified growers over the first 15 years of their MPS-ABC program participation, energy use was reduced by an average of 25 per cent and crop protection agents by an average of 23 per cent. (ABC refers to MPS “environmental criteria packages” A, B and C.)
|Dr. Debra Basil says sustainability is becoming increasingly important to mainstream consumers.
“Of course, we know that during these years, many other things contributed to these reductions,” says Smit, “but we have been told by many growers in the program that the information presented to growers in the ABC program helps them focus on the best use of their efforts to save resources through the fact that MPS is a benchmarking tool.”
MPS water use savings data is not yet available, as this was recently added to the MPS-ABC system.
George Sant & Sons in Kleinburg, Ont., has been certified with MPS since early 2011. In terms of cost-savings from reduced energy and/or water use from the certification, accounts manager Mark Sant says nothing substantial changed with the audit; the company installed a water collection and reuse system about a decade ago, and so the savings started then.
However, he says the new, more-meticulous manner of data collection (and the monthly reporting of water usage that they have been doing since late 2010 to seek MPS certification) means “we are able to make better decisions going forward by looking at what we’ve done in the past.”
STUDY IN 2010 LISTED A NUMBER OF GROWER CONCERNS
■ Dr. Roberto Lopez and his colleagues at Purdue University in Indiana conducted a survey (reported in a 2010 issue of the journal HortScience) that nearly two-thirds of 112 U.S. greenhouse flower growers were not interested in spending the time and money to become certified sustainable.
Lopez says the ability to recoup the cost of being certified was the chief concern. “They feel that conversion to sustainable production practices is still risky,” he explains. “They’re unsure of some of the technology.”
He notes that converting to a sustainable technology or practice – water recycling systems or alternative energy systems – can be costly, and that using some of the technology incorrectly also could lead to losses (for example, if recycled water use spreads disease).
Dr. Rossitsa Yalamova, an associate professor in the department of finance at the University of Lethbridge in Alberta, qualifies the decision of whether it’s financially worth it to be certified on size of operation.
“It’s evident that producers with large greenhouse capacity will find it beneficial to get through the certification process and recoup the cost through large contracts with retailers like Wal-Mart and Costco,” she says. “The cost of certification creates entry barriers for smaller producers.”
In addition to providing input savings, certification also potentially boosts sales. It helps promote an image of the grower – and the entire greenhouse sector – as environmentally responsible. “According to the marketing firm Packaged Facts,” says Harrington, “the domestic market for ethical products (eco-friendly/green/fair) is expected to grow from $38 billion in 2009 to $62 billion in 2014, with sales of non-food items growing at a faster pace than food.”
Keyes also believes participation in greenhouse sustainability certification will continue to grow.
“We do find consumers want to ‘vote with their dollars’ and some look to make a positive environmental impact with every purchase,” he says. “Many major retail chains, florists, nurseries, garden centres, and online retailers like Costco, Sam’s Club, Trader Joe’s and Wal-Mart are actively looking for suppliers who can provide sustainably-produced products. They are looking for producers who have developed high-tech operations, greenhouses that are enclosed in glass or poly with fully automated climate, food safety, and fertilization systems.”
Dr. Debra Basil also believes that sustainability is becoming increasingly important to mainstream consumers.
“In recent years, there has been quite a lot of press regarding ‘greenwashing’ and other deceptive marketing practices, whereby businesses attempt to
artificially bolster their environmental and social reputations,” notes the professor of marketing and member of the Centre for Socially Responsible Marketing at University of Lethbridge in Alberta.
“This has led to increased consumer skepticism regarding companies’ social and environmental claims. Third-party certification can be an effective means of reducing this skepticism.”
Basil notes that certification solves other programs.
“As consumers, we have so many things to consider each day, that when possible, we seek cognitive shortcuts to reduce this load,” she says. “We look for decision guides to help us make our decisions more quickly. Certification is one shortcut, or heuristic, we can use to reduce our cognitive load. If sustain-
ability is important to us, it is much easier to look for a certification mark, rather than evaluate the company’s entire sustainability record.”
SUSTAINABILITY MUST BE PART OF COMPANY CULTURE
■ Having said that, Basil believes a company’s decision to become certified should be based on whether certification is consistent with the company’s mission and values, not in hopes of increasing market share.
|Dr. Roberto Lopez authored a 2010 study on certification programs.
“In order to successfully embrace sustainability it must be an integral part of the corporate culture,” she observes. “Consumers respond quite negatively when they feel these efforts are undertaken without sincerity.
“A company should also be aware that consumers will hold them to a higher standard when they make claims regarding their sustainability or social responsibility. If the company is not ready for that level of commitment, then perhaps it should reconsider.”
Yalamova agrees. “Marketing your practices as sustainable may not be effective … as the consumer is already confused with so many marketing ‘tricks’ (healthy, ethical, organic, responsible, etc.),” she says.
“Moreover, in economic downturns, price sensitivity among consumers increases and economies of scale win. We have to find ways to stimulate small and medium-sized businesses in manufacturing, retail and agriculture and change the mentality of the consumer.”
Nature Fresh Farms (NFF) in Leamington, Ont., joined Certified Greenhouse Farmers in August, and compliance co-ordinator Jeff Gagnon says his company expects sales to be boosted “indirectly as a mark of commitment and quality.”
However, he adds, “our goal in this certification was not to use it as a marketing tool. Our primary goal was to be recognized for sustainability. Our process of designing and building greenhouses from the ground up for sustainability has been verified by the CGF certification process.”
NFF is placing the CFG logo on packaging, and Gagnon says the company will educate customers about the significance of the CGF as time goes on, and as questions are asked. “We are heavily involved in children’s programs,” he adds, “and can also use the criteria as a tool with that.”
George Sant & Sons hasn’t seen any sales increase since being certified, but Sant says that’s because the company hasn’t publicized its certification much so far. It is currently working on an MPS marketing plan.
Greenhouse operators should act now to get certified, in Smit’s view; she thinks proactivity is the best policy.
“As an industry, we cannot sit on the sidelines of the sustainability question, waiting for retailers and consumers to ask questions regarding our sustainability or on certifications,” Smit asserts. “We should be working to create answers and show our sincerity on the issue.”
Treena Hein is editor of Energy Edge.