Ahold Delhaize Sets Ambitious U.S. Sustainability Agenda

Responding to what officials described as a dramatic shift in consumer attitudes around their food purchasing decisions, Ahold Delhaize USA this week unveiled new health and sustainability goals as part of a strategy to enable shoppers to make healthier food choices, while providing industry-leading product transparency, reducing food waste, and taking new actions to address the climate crisis.

The programs, which align with its Dutch parent company’s overarching sustainability ambitions, detail specific actions toward those goals unique to the U.S., including the introduction this week of online product sustainability ratings at its Giant Co., Giant Food and Stop & Shop websites, and intentions to disclose the percentage of healthy food sales from its own products and from national branded items, providing a level of transparency company officials say is unique to the industry.

“We want to lead the industry on these topics,” Brittni Furrow, VP of health and sustainability for Ahold Delhaize USA, told WGB in an interview. “It's important to us. It’s what what our culture and our company believes in, but it’s also what our customers are asking for now.”

Niche Gone Mainstream

The company’s proprietary research indicates that shoppers are demanding healthier and more transparent products more than ever before, with an “intentional” shopping trend going mainstream.

A survey taken last year indicated 43% of Ahold Delhaize consumers feel sustainability is “extremely important,” up from 28% when asked the same question prior to the pandemic.

“Having worked in this field for years, that’s actually surprising,” Furrow remarked. “We’ve always talked about this space as being very niche, with only a small segment of customers that really care about this stuff. But that seems to be changing, and we're seeing that within our own customer data.”

Furrow said consumer attitudes have been influenced by younger shoppers gaining purchasing power, by behavior changes brought about the pandemic, and by topics such as the climate crisis gaining more mainstream attention.

Greater Transparency

The online product ratings represent a new activation of third-party data provided by How Good, which has previously partnered with Ahold Delhaize’s Giant Food chain in a shelf tag program that identifies specific items with a sustainability rating based on an assessment of various environmental and social practices expressed with one, two or three “leaves” in a good-better-best rating in a manner similar to Ahold Delhaize’s proprietary Guiding Stars system, which provides shoppers with ratings on healthy foods at a glance.

Taking the ratings online allows shoppers at the participating brands to filter and sort ratings based on the specific elements of the data behind them, so consumers concerned about labor conditions associated with a product, for example, can see how the products rate in that category. Others may want to choose based in plastic reduction or humane treatment of animals.

While declining to share specific data with regard to how products tagged with How Good rating performed at Giant stores, “we do have results there that show sustainable items are growing  at a higher rate,” Furrow said.

The company’s transparency goal, established this week, calls for it to enhance the information provided about where products come from, beginning with fresh produce and meat, by 2025. By the same date Ahold Delhaize USA will also expand its current progress to sustainably source seafood, coffee and tea to be 100% sustainably certified in cocoa, palm oil, pulp and paper products and packaging and making key advances in animal welfare and human rights, it said.

Healthier Choices

In addition to making nutrition and health information transparent to shoppers through Guiding Stars, Ahold Delhaize USA said it also committing to improved access to healthier food, saying its goal was to have 54% of its private brand food sales comes from healthier items by 2025.

A recently announced initiative with the Partnership for a Healthier America will support this goal and includes plans to publicly disclose the percentage of sales from healthier options throughout its assortment, a move officials said marks the largest pledge to increase healthier food sales and transparency from a grocery retailer in the U.S.

Increasing these percentages includes decisions on assortments and on reformulating private brands, Furrow said, but also includes marketing and merchandising tactics intended to incentivize customers to make healthier choices. For example, she cited a move at Food Lion stores to remerchandise checkout areas with fresh foods and waters vs. soft drinks and candy. And Giant Food has had success in expanding its wellness efforts outside of its stores in some communities, she said.

Eliminating Waste

A newly stated goal on food waste elimination incorporates relationships with hunger relief organizations like the Feeding America food banks, recipients of 2 billion meals through donations, and separate partnerships to reduce packaging and plastics. Ahold Delhaize is a signatory to the Ellen MacArthur Foundation New Plastics Economy Global Commitment to eliminate problematic or unnecessary plastic packaging and move from single-use to reuse packaging models, and it is a participant in the Beyond the Bag initiative seeking to identify, test and implement alternatives to single-use plastic bags.

The company is also buying smarter through supply chain software that reduces inventory to stores and distribution centers.

Its waste goal calls for committing to reduce food waste by 50% by 2030 and work toward “zero waste” by achieving 90% waste diversion. Additionally, by 2025, Ahold Delhaize USA will seek to reduce its overall use of single-use plastics. This includes making private brand products 100% reusable, recyclable or compostable and increasing recycled content by 25% by 2025.

Taking Climate Action

Ahold Delhaize last year released science-based targets and time-bound goals for climate action by 2030. Ahold Delhaize USA is participating through a commitment to reduce carbon emissions by 50% from its own operations by 2030, while working with suppliers to reduce emissions from the supply chain by 15%.

In 2019, Ahold Delhaize USA and its local brands signed up for the Science Based Targets initiative to help set climate targets that are in line with the need to reduce carbon emissions.

“Food—and how consumers shop for it—has far-reaching impact,” said Kevin Holt, CEO of Ahold Delhaize USA, in a release. “As food retailers, we recognize that our role in food supply chain comes with great responsibility. Our expansive network means we can make a real and positive impact on local communities and our planet. That’s why we’ve committed to these goals—to hold ourselves accountable to the customers we serve and our world.”