The Packaging Pitch: Farming’s eroding social license to operate

October 07 , 2019

By Fresh Produce Marketing founder Lisa Cork

As someone who speaks on trends impacting the fresh produce industry, I am always on the lookout for new trends. When I speak, I believe it’s important to raise awareness of issues that may not immediately impact your businesses – but need to be on your radar – especially in the current climate of so much disruption.

Recently, I came across something I believe needs to be on every produce company’s strategic agenda. In talking with produce CEOs, only a few had heard of it, most had not. The concept I am referring to is the concept of ‘social license’ or what is also known as social license to operate or SLO.

Mashing together a range of definitions from different sources, a social license to operate is the ongoing acceptance of a company and the way it operates by its employees, stakeholders and the general public. Put another way, it is the ability of a company to carry out its business because of the confidence society has in it that it will behave.

Let me give you a couple of examples why this is on my radar.

The first example requires you to understand the current trend of plant-based proteins. There are three primary reasons the plant-based protein trend is more than a fad…and more than a ‘millennial thing.’

  1. People are concerned about saturated fats from animal protein sources.
  2. The argument is mass-scale animal protein production is unsustainable as a strategy to feed the growing world population. Increased demand for animal-based proteins is creating irreparable damage to the environment and is not an efficient use of natural resources.
  3. Animal cruelty. This is self-explanatory.

What plant-based protein has done is given people an alternative to animal-based proteins. Consumers who feel strongly about one or more of the reasons listed above now have the option to increase the amount of plant-based protein in their diet…and decreasing the amount of animal-based proteins.

A great article in the July 2019 issue of Outside Magazine was headlined, “This Is the Beginning of the End of Meat.” It’s a compelling story and worth a read. But what does this have to do with social license?

The animal protein industry lost social license by not responding fast enough to changing consumer demographics and changing food consumption trends. Aside from a concerted move away from battery hens to barn-raised or free-range, few other industries have changed their husbandry practices to deal with consumer concerns.

As we saw in the definition of social license, it implies an acceptance to operate by consumers and other stakeholders. When an industry is seen to not be responsive to changing consumer needs, social license can be lost.

I am part of a Facebook group out of the USA called, My Job Depends on Ag. Recently, one of the regular contributors submitted a tongue-in-cheek assessment of agricultural production in California.

As we all know, California is the USA’s largest fruit, vegetable and nut producer. If California stops producing fresh produce, the world will feel it. The commentary went like this.

“With your help, we can eradicate Agriculture in California during our lifetime. The following is a set of ideals and concepts to enhance our lives and give us and our children the life we deserve in California. That being said, we, the far left and politically correct in charge of California, dictate the following to Agriculture:

Item 1. We don't want you. We don't need you. We can get our food from the stores. Our life and our state would be much better off without you. Note - All other items in this manifesto are superceded by item 1. If any items are unclear or unfair, always reference item 1

Item 2. You cannot use water. No pumping, piping or conveying water from natural water ways or underground aquifers. Only large metropolitan areas are allowed to divert water for their use such as Hetch Hetchy or making sure we keep our waterways clean by flushing out (pun intended) the sewage generated by cities along waterways. We must keep our rivers clean for our children so they can dump their sewage in the water in the future.

Item 3. No diesel engines. All power will come from renewable energy sources. All electric powered devices must be recharged from solar or wind. If you can't find a clean viable replacement solution, too bad! (See item 1)

Item 4. No chemicals will be used to produce food and fiber.
You can put seed in the ground. That's all. If it rains, grows and matures, you can harvest. If it doesn't, see Item 1. No fertilizer, no pesticides, no water.”

Item 14. Ag workers (farm labor) make too much money. All other minimum wage workers in the state are limited to 40 hours. It is not fair in socialist, redistribution of wealth, California that ag labor is allowed to work 60 hours per week. That gives ag workers a 50% higher income than other sectors. Not fair. Ag labor is reduced to 40 hours /week

Item 15. Farmers are not allowed to make a profit. Profit is capitalistic and bad for socialism. Being successful, risking their capital and working hard doesn't give farmers the right to make a profit. Farmers will be taxed at a progressive tax rate of 100% of their profits. For every $1 made over production costs, the tax rate is $1.

I have only included excerpts above, but the ‘manifesto’ carries on for seventeen points (full manifesto here if interested).

The article goes on to close with the following:

EXEMPTIONS TO ALL ABOVE ITEMS:

Hemp and Cannabis Farms
• Grow whatever you want
• Use as much water as you can
• Spray any chemicals necessary
• Exploit labor
• Process products with no testing, inspection, truth in labeling, not knowing actual content of product
• Advertise the benefits even if never tested.

In reading this, do you sense the decline in social license? Do any of these tongue-in-cheek points hit home? Can you identify with the frustration of the writer?

Why write about social license?

Ten years ago, who would have imagined we would be seeing the demise of the animal protein sector. Yet, a combination of societal and consumer demographic change plus mass scale global environmental awareness now means headlines like  “This is the beginning of the end of meat” are common to read.

In growing fruit, vegetables and nuts, there is a sense we have an untouchable social license because we produce fresh foods that are good for people. I question…is that social license guaranteed? The debate we are seeing about plastic apple bags and plastic-wrapped cucumbers shows that we do not have an untouchable social license - people want plastic in the fresh produce department gone! Yet these same people have no understanding of the implications of no plastic on food waste, varietal choice or food safety. This tells me our social license is not guaranteed.

Some questions to consider in your business: 1) Is the subject of social license on your board or senior leadership team’s strategic agenda? 2) A bit like the triple bottom line measurement from a few years ago, are you documenting, measuring and monitoring social license metrics? 3) If people were to question your social license to operate your fresh produce business, would you have a response?

There is no doubt that at times, the scrutiny placed on the fresh fruit and vegetable industry seems unfair. I think this is partly because we have never well documented or promoted our social license in a way that was better understood by the masses. Maybe we need to be thinking about a new conversation.

Maybe we need to be talking about our industry in terms of healthful nutrients produced per liter of water used or servings of fruit and vegetable contained within a gram of plastic as part of communicating our social license more effectively.

What I do know is something does not seem right when our industry is challenged about plastic bags or water use when we grow healthy, nutrient-rich, real food. IMHO, society would be better off challenging the social license given to mega-soft drink companies, which generate 108 billion bottles per year of flavored, high sugar fizzy water that contributes nothing to the good of humanity aside from obesity, diabetes and tooth decay.

Looking ahead, our industry’s ability to earn, maintain or improve our social license with society is a trend that needs to be on every company’s strategic radar. Our right to produce healthy food is never guaranteed.

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