Beyond Certification. Business model innovation for sustainability in food and agriculture

“Sustainability certification, is that legit?” somebody recently asked me. “I don’t know”, I said.

Innovation for sustainability in food and agriculture is stuck. We had the hope over the last few years that sustainability certification of agricultural products might compel the market to deliver on sustainability by laying down the rules by which it should play. Although the scientific basis for the sustainability criteria that products should meet is sound, certification hasn’t proven itself to be the right vehicle for criteria adoption. The focus is all on the standard, and not on the business model.

The question of what lies beyond certification for effectuating sustainable development in agri-food markets is thus very much upcoming. It is being discussed more as brands and traders are becoming increasingly confident about acting in markets for sustainable produce.

Though there is no definition of “beyond certification”, there are some examples in the market to date that in my opinion illustrate facets of a “beyond certification” innovation agenda. They all concern business model innovations, which provide a more fruitful ground for adoption of sustainable production standards. Some broad brush illustrations:

Sustainability as part of integrated brand communication. In this case the brand becomes the standard, and vice versa. The brand’s narrative leads in voicing the responsibility that is taken for the products it markets. Rather that explicitly communicating the technicalities of sustainability impact, the narrative will more likely cover topics like the origin and quality of the product, or the history/artisanship of the producer. Examples of concepts that already apply this are for instance Nespresso (a Nestle coffee brand) and Innocent (a fruit smoothies brand). Both certify or verify their product ingredients through a third party certifier, but this is not directly communicated to the consumer. The only communication regards the overall brand experience of a top quality and responsible product.

Joint platforms of brands/retailers and producers for a differentiated market proposition. In this example producers and the marketing brand would jointly invest in creating a business model to which they both contribute brand value. A successful example of this is for instance the Naked Wines online wine retail platform. Naked Wines brings together wine aficionados and independent wine makers. The platform provides pre-finance for winemakers’ harvest and produce, in exchange for exclusive sales and marketing of their wines through the platform. So far Naked Wines has appeal with a subscriber base of 200.000 people worldwide.

Rewards to achievement of sustainability performance. This example relates to finding smart combinations between sustainability impact, and economic reward systems. The case of Guayaki Maté tea and reforestation, shows how shade-grown maté under the forest canopy improves quality, and is able to capture added value in the market. This value is captured both through improved tea quality, as well as through the convincing claim that can be made to consumers that increasing their consumption of maté will expand the rainforest.

Conclusion
Complements need to sought between certification and new combinations of value creation that make it commercially compelling to adopt more ambitious sustainability standards. This will come from creating new market-based value systems at the farm level, or at the marketing level, or more likely both at the same time. If we truly aim to fulfill our sustainability ambitions, then we will need to delve deeper into the value creating process to find these synergies that will proliferate a higher standard of production and living.

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