Supply Chain Information: Accommodations & Food

Sector Name: Accommodations & Food Supply Chain

SIC code: 73

The implementation of sustainable methods within the food supply chain has become an industry standard. It is common for large distributors to use bio-fuels, fuel-efficient vehicles, locally grown produce, and sustainability reports throughout their operations. Major food distributors like SYSCO and US Foodservice have made these and other green retrofits to their businesses in order to reduce carbon emissions and operation costs.

Fast food restaurants are the latest companies to enter the sustainable food supply chain. Burger King has pledged to purchase 100% cage-free eggs and hogs by 2017.  After consumer outcry, McDonald’s discontinued the use of “pink slime”, a highly processed meat by-product, in the production of its burgers. Kraft’s Foods is the latest food supplier/producer to convert to more sustainable food sources. The company, which owns Oscar Meyer, has pledged to end the use of gestation crates in the production of its pork supply by 2022. Gestation crates are viewed by animal rights activists as unethical and confine pregnant sows for the duration of their four-month pregnancy. The decisions of Kraft Foods, and other large food providers, have the potential to bring positive changes to America’s industrial food and farming industry. Review the latest entry by the Environmental Leader to learn more about the sustainable future of Kraft Foods.

Major Players

Accommodations Industry

• Hilton Worldwide Group
• InterContinental Hotels Group
• Marriott International, Inc.
• Omni Hotels and Suites
• Wyndham Worldwide Corporation

Food Supply Chain (By Order of Size)

• SYSCO
• US Foodservice
• Performance Food Group
• Gordon Food Service
• Food Services of America

Major Issues

Accommodations Industry

The excess emission of greenhouse gases, the majority of which come from buildings, is an ever-growing concern for the hospitality industry. To address this issue, hotel chains are retrofitting and constructing their buildings in accordance with various certifications (i.e. LEED, EPA Energy Star), as well as, authoring annual sustainability reports to keep track of their sustainable efforts.

Food Supply Chain

Reducing carbon emissions is also a concern for socially responsible food distributors. Increasingly, companies are redressing this issue by using bio-fuels, purchasing fuel-efficient vehicles, as well as adopting high-tech logistics software. These adaptations help increase fleet efficiency and reduce a company’s road miles, their carbon footprint, and their cost of operations. Due to increased pressure from consumers, food distributors are also purchasing more locally and regionally grown produce. The purchase of more regional produce introduces distributors to new consumer markets and helps reduce carbon emissions by lessening the number of miles traveled by transportation fleets.

Major Benefits 

The primary benefit of encouraging sustainability in the accommodations industry is that it increasing consumer satisfaction. Studies (Abrams, 2012; MindClick, 2012) show that sustainable practices are a key motivator in consumer decision-making and that green hotel practices contribute to customer satisfaction and brand loyalty (Deloitte, 2008). Practices such as, energy and water conservation, building retrofits, changing internal operations procedures, and acquiring green certifications have become standard within the hospitality industry.Investments in green practices like bio-fuels, fuel-efficient vehicles, locally grown produce, and logistics software are important to food distributors because they help reduce production costs and carbon emissions. The use of technology, in particular, is a component that many food distributors use to increase operational efficiency. ArrowStream, a logistics software company, has received notoriety for its Inbound Transportation Management solutions system. This program is used by Steak n’ Shake, IHOP, Popeye’s, Cinnabon, and many other restaurant chains to streamline operations and cut operations costs.

Key Requirements

The international accommodations industry, as a whole, is focused on reducing carbon emissions while increasing company profits. The implementation of green practices and the adoption of green certifications are become necessary for achieving these goals. Business owners seeking to remain competitive in these industries must consider developing green business practices to reduce company costs and improve consumer satisfaction.

Key Food Supply Certifications

Certification of Halal

• Islamic Food and Nutrition Council of America (4Life Research, Bard Valley Medjool Date, Cabot Cremery, Nutrilite, Baqi, Inc., Toms of Maine, Inc.)
• American Halal Foundation Certification (Association of American Halal Certifiers, Council of Islamic Organizations of Greater Chicago, Islamic Society of North America, USA Halal Chamber of Commerce)

Certification for Kosher Foods

• Kosher Supervision of America (Alaska Seafood, Counter Culture Coffee, Baba Foods, Krispy Kreme, TAZO, Smirnoff)
• OK Kosher (Hickory Harvest Foods, Kellogg’s/Worthington Foods, Chef’s Choice, ConAgra Foods)
• Earth Kosher (Agave International,Blue Mountain Organics, Mountain Green, Young Living Essential Oils)
• KOF-K Kosher (Good Humor, Listerine, Canada Dry, Cinnabon, Chirardelli, ConAgra Foods, Trader Joe’s)

General Certifications

• Safe and Local Supplier Approval (SALSA) (Specialist Cheesemakers Association, Seafish, FoodFix, Simply Ice Cream)

Key Accommodations Certifications

• Sustainable Travel International (Eco-Certification) (The Leading Hotels of the World, Vail Resorts, Rocky Resorts)
• Audubon International (Audubon Green Leaf Eco-Rating Program) (Grand Hyatt New York, Marriott Vacation Club)
• USGBC LEED Certification (InterContinental Hotel Group)
• Green Globe (Crowne Plaza, The Ritz Carlton)
• Energy Star
• International Organization for Standardization (ISO) (Hilton Worldwide Group)
• Forest Stewardship Council (Omni Hotels & Resorts)

Getting Started

A sounds good first step for food distributors and the hotels is to inquire into the green practices for your industry. Understanding where other businesses have stumbled and succeeded is an asset when developing individualized sustainable practices. Also, seek and subscribe to publications that address the needs of your industry. Food distributors have a rich resource in Food Logistics, the only magazine that focuses on the sustainable food supply sector. The Hotel Business Review is a good resource for those in the hospitality industry.

Going Further

Incorporate and encourage sustainable practices and employee engagement into everyday operations. Business owners should be mindful that managerial decisions do not result into the immediate adoption of green practices by employees. Therefore, internal operation overhauls should be supported by incentives and employee engagement functions whenever possible.

Advanced Steps

Implement methods for tracking sustainable practices, along with sustainability reports to record successes and areas of improvement.

Best Practices

Marriott, Inc.

Marriott, Inc. has contributed over 20-years to sustainable practices and is a member of the Hospitality Sustainable Purchasing Consortium.

1 Hotels

1 Hotels will be the first LEED-built, global luxury hotels.  

SYSCO

SYSCO is the number one food supplier in the nation. Beginning in 2007, SYSCO began conducting sustainability reports to track the number of food miles driven by its trucks, as well as, the farms from which they purchase produce.

US Foodservice

US Foodservice urges its suppliers to obtain certification from the Marine Stewardship Council and has purchased a West Virginia-based company that facilitates the processing of vegetable oil into B20 (80/20 bio-fuel). US Foodservice will use these bio-fuels in its transportation fleets. 

England Logistics

England Logistics is a third-party logistics provider (3PL) and have been listed as one of twenty 2012 Top Green Providers by Food Logistics magazine. 

Key Resources

3 Pillars Network’s National Sustainable Food Summit – The 3 Pillars Network is a non-profit organization that seeks to generate knowledge and networks regarding sustainable food systems in Australia. 

Food Logistics – Food Logistics is the only magazine dedicated to discussing issues and innovations in the food and beverage supply chain. 

“Green” Hotels Association – This association is comprised of a network of green hotel owners who seek to expand their operations, networks, and knowledge base. 

Mind Click SGM – Mind Click is a performance measurement and consulting firm that measures, monitors, and maximizes the sustainable efforts of businesses. It is also the developer of the Hospitality Sustainable Purchasing Consortium.

ArrowStream, Inc. – ArrowStream is a software company that helps transportation industries maximize road miles and minimize carbon emissions. 

Hospitality Sustainable Purchasing Consortium (HSPC) – HSPC is comprised of leading companies that provide sustainably produced furniture and supplies to the hotel industry. 

The Corporate Responsibility Newswire (CSR) – CSR describes itself as the “leading source of corporate social responsibility and sustainability news, reports, events and information.” 

Carbon Disclosure Project (CDP) - CDP assists world businesses in changing operation procedures and reducing carbon emissions. 

Key Words

• Supply Chain Management – The management of supply chains to ensure efficient operations and customer satisfaction.
• Food Supply Chain – The logistical connections that exist between the farms where food is grown and the dinner tables. (i.e. manufacturing, distribution, sales)
• Sustainable Food Chain – Food chains that incorporate the triple bottom line of people, planet, and profits. 
• Corporate Social Responsibility – Business protocols that extend beyond net gains and contribute social benefits to communities.
• Inbound Logistics – Managing the transport o materials from its supplier/vendor to processors and storage facilities.
• End-of-Life Processing – Process of determining how best to re-process and/or dump products that have met their life span.
• Carbon Emissions – Greenhouse gases that emit from buildings and automobiles, trapping heat in Earth’s atmosphere. 

Sources

3 Pillars Network. 2ND National Sustainable Food Summit. Conference Program. Sydney, Australia. August 2-4, 2012. Retrieved from Conference website.

Abrams, J. (2012). “Survey Say: Consumers do Focus on Sustainability”. Hospitality Sustainable Purchasing Consortium. “Top 50 U.S. Foodservice Distributors”. Retrieved June 26, 2012 from foodservice.com. 

Courtland, Matt. “ Environmental Mission Statements: A List of Hotel Sustainability Policies”. Environmental Leader. March 18, 2010. Retrieved from Environmental Leader.

CSR Press Release. “U.S. Foodservice Acquires Waste Vegetable Oil Processing Company to Reduce Environmental Impact of Trucking Fleet.” Retrieved from CSR Wire.

Deloitte (2008). The staying power of sustainability. New Jersey: Deloitte Development. MindClick/Expedia (2012). Consumer Response to Hotel Sustainability.

Maloni, M. J. & Brown, M. E. “Corporate Social Responsibility in the Supply Chain: An Application in the Food Industry”. Journal of Business Ethics. Vol. 68, No. 1 (Sep., 2006), pp. 35-52

Smith, B. G., “Developing Sustainable Food Chains”. Philos Trans R Soc Lond B Biol Sci. 2008 February 27; 363(1492): 849–861. Retrieved from NCBI. 

Utah Business (2012). “England Logistics Receives Food Logistics’ 2012 Top Green Provider Award”. Press Release. July 3, 2012. Retrieved from Utah Business.