While many people know Kroger as the nation’s largest traditional food retailer, few know that they are effectively the fifth largest consumer packaged goods manufacturer in the nation and have more than 2800 retail food stores under a variety of banner names. In this episode, we learn that Kroger is committed to protecting people and the planet by advancing positive change in their company and communities and realizing that they could have multiple environmental and social impacts through their own operations, through the supply chain, and in other areas.
Zero Hunger, Zero Waste is what Kroger named their social impact plan to end hunger in their communities and to eliminate waste in their company by 2025. This plan was launched in September of 2017 and was inspired by their purpose to feed the human spirit. They are always looking to the future and have recently announced their new, and very ambitious, 2030 ESG Goals. Joining Smart Decisions Founder John Failla for this closer look are Kroger’s Lisa Zwack, Head of Sustainability, and Denis George, Category Manager – Energy.
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Stakeholder engagement is a great way for Kroger to learn what their key internal and external stakeholders think about what they are doing and what they think Kroger should be doing moving forward. Kroger engages with its stakeholders through its materiality assessment early in the year. It is a great focused opportunity to get input from their various stakeholders, investors, NGOs, and any number of people outside of the company as well as inside the company. Kroger wants to hear what is most important to their leaders as well. Investors are a key audience. There is increased investor interest in how companies are managing climate risk and climate impact and how they are reducing energy usage and moving to more renewables and reducing greenhouse gas emissions.
Kroger is generally always trying to increase and improve the amount of transparency that they use when they talk to their stakeholders as they know that they are trying to get more decision-useful information for their purposes of making investments in different companies. Kroger prides itself on being very in tune with what investors are looking for and being responsive to that. They also took part in a qualitative climate risk assessment late last year. Kroger assesses and manages risk as a company overall, but this assessment was a great foray into the more dedicated climate risk assessment process, which is something else investors are looking for companies to do.Historically Driven by Expense Savings
Twenty-some years ago, when Denis started with the company, they were more “Zero Energy, Zero Waste” before they were “Zero Hunger, Zero Waste.” Denis states that if they can fulfill their mission to their customers by using less energy, that is just a smart way to operate a business. They learned long ago that through energy efficiency they could achieve that very quickly and very uniformly. They have also found that one can achieve cost reduction in many other ways - through contract negotiations, better rates from utilities, items of that nature, and, as renewables continue to come on and there are more and different ways to engage in renewable energy acquisition those costs are coming down. This is very consistent with Kroger’s desire to reduce expenses, to maintain reliable well-lit stores, keep food safe and tasty while ensuring the quality of their food, as well as to contribute to the environment. Denis comments that it is wonderful when all those goals that can sometimes seemingly conflict come together and, by doing what they have been doing with reducing the amount of energy and starting to bring on additional renewable purchases, that they are beginning to achieve a lot of the goals all at the same time.Safety and Quality are Paramount
Three of Kroger’s four drivers mentioned in this podcast come up in varying order. Cost reduction is number one nearly 80 percent of the time, followed by greening the environment, but the one most interesting point of the conversation is the notion of food safety because that is a unique and very important driver for the entire food industry.
You could save a lot of money by turning everything off, but ice cream doesn’t work well in a zero-energy environment. Everyone’s been inside a grocery store and knows how much energy it uses, but milk has to maintain a certain temperature, the quality of ice cream depends on how cold you keep it - too cold is actually as bad as too warm. There are not only a lot of state, federal, and local food requirements to follow but a lot of other things Kroger wants to do to maintain freshness as well. Those are the rules by which Kroger must live that perhaps might not be needed in a clothing retail store or an auto parts place where humidity and temperature would not affect the product as much as it does fresh produce and fresh meat. Kroger must respect those guidelines and principles to sell their product to their customers in a very safe and comfortable environment.Resources & People Mentioned
Lisa Zwack, Head of Sustainability
Lisa is the Head of Sustainability at The Kroger Co., the nation’s largest grocery retailer, headquartered in Cincinnati, Ohio. In this role, she leads and executes on Kroger’s sustainability strategy across a variety of topics, including the company’s progress towards its 2020 sustainability goals as well as goals for the next decade. Previously, Lisa served as Sustainability Manager for Staples, Inc. for nearly five years, where she played a key role in implementing and communicating the company’s global sustainability vision. She earned her MBA from the Ross School of Business and her MS and BS degrees from the School for Environment and Sustainability, all at the University of Michigan, during which time she worked with several leading companies on sustainability-related projects.
Denis George, Category Manager – Energy
As Category Manager — Energy for The Kroger Co. (www.thekrogerco.com) — one of the Nation’s largest grocery and retail companies — Denis George manages the Company’s renewable energy acquisition, gas & electricity contracts, utility agreements, regulatory intervention, and related matters. From 1998 to 2016, Denis served as Kroger’s Corporate Manager — Energy with responsibilities that also included energy efficiency initiatives, carbon footprint calculations, mechanical system design, and Energy Star program compliance. Over these years, Kroger received numerous national and regional awards for energy efficiency and sustainability, including the Energy Star “Partner of the Year” Award (twice), the Alliance to Save Energy's top award — the "Galaxy" Star of Energy Efficiency, and an “Award of Excellence” from Platt’s Publications. Mr. George has presented before numerous Commissions and Associations, including the Edison Electric Institute, American Public Power Association, Touchstone Energy Partnership, Green Retail Decisions, Smart Energy Decisions, and the Critical Consumer Issues Forum. He serves on the Customer Advisory Board of Smart Energy Decisions and has previously served on numerous utility customer advisory groups. Denis also served two terms on the State of Ohio Public Benefits Advisory Board, a non-compensated Board advising the State of Ohio and utilities on low-income consumer energy needs. From 1980 to 1997, Denis worked at The Dayton Power and Light Company, serving in several legal and management positions that included appearances and representation before the Public Utilities Commission of Ohio as well as the Federal Energy Regulatory Commission. Mr. George received a Juris Doctor Degree in 1985 from The University of Cincinnati College of Law and a Bachelor of Arts degree in Economics/Business Administration, cum laude, from Wittenberg University in 1980. He remains a licensed Attorney at Law in the State of Ohio. Denis and his wife, Alice Sutherland George, live in Loveland, Ohio.