“We are all going to be naked,” says my friend Andy Ruben in an intriguing TED talk, “so you might as well get buff.” Referring to transparency in the corporate supply chain, this statement is pretty radical coming from a senior executive at Walmart. Despite its size and the fact that it is publicly traded, until recently Walmart had a reputation as one of the world’s most insular companies.
Yet what Andy is talking about is a seachange in the retail supply chain. Not only do consumers and stakeholders have access to more information about their purchases these days, Walmart managers are also looking deeper into their supply chain than ever before.
In his talk, Andy maps out the global implications of a lowly can of tomato sauce, noting that its supply chain touches three continents and dozens of different growers and suppliers.
That can of tomato sauce was one of a handful of products that Environmental Defense Fund analyzed with Walmart’s private brands team. With the help of interns from the University of Michigan’s Erb Institute, we dove deep into the supply chain to look at environmental impacts from growing the tomatoes, producing the fertilizer for the tomatoes, manufacturing the chemicals that went into that fertilizer and so on. One thing we discovered early on was that simply knowing the source of each item in the chain can provide tremendous insight into potential environmental risks and opportunities.
It can also bring surprising results. We had expected farm impacts like water and fertilizer use to be the biggest part of the tomato sauce eco-footprint, but instead, it turned out that the can itself was the biggest source of concern. The energy and chemicals required to make and transport the cans and the associated pollution adds up to far greater impacts than those found on the farm.
Changing from cans to other packaging will not be easy in the U.S. There are alternatives like pouches and aseptic boxes, but it turns out that existing handling equipment uses magnets, which work great on cans but not on foil pouches. So we’ll need some wholesale changes to the handling systems for canned goods.
Not to mention the cultural barriers. Every cook in America knows of recipes that call for “an 8-oz can of tomato sauce.” So even if new packaging retained the same volume increments, it’s still going to take some consumer education.
But the point is that without this kind of deep supply chain transparency, we wouldn’t have known where to start looking to make a difference. While the journey of that simple can of tomatoes is eye-opening, it’s only one product out of millions in global commerce. The challenge for retailers and suppliers is to make that kind of naked transparency the norm rather than the exception–and in this age of instant information and global commercial networks, that’s not too much to ask.