Kraft Foods Inc. uses a cream cheese byproduct to help power a New York plant. Sara Lee Corp. plans to run a New Mexico bakery using solar energy. Al Gore's campaign against global warming is turning up the heat on the food industry. After years of taking on the oil and coal companies, environmental organizations are scrutinizing the makers of Oreos and Jimmy Dean sausages, and that's attracting the attention of consumers and investors.
Kraft Foods Inc. uses a cream cheese byproduct to help power a New York plant. Sara Lee Corp. plans to run a New Mexico bakery using solar energy.
Al Gore's campaign against global warming is turning up the heat on the food industry. After years of taking on the oil and coal companies, environmental organizations are scrutinizing the makers of Oreos and Jimmy Dean sausages, and that's attracting the attention of consumers and investors.
Fearing retribution from environmentalists that could taint their brands, Kraft and Sara Lee are among companies responding by reducing the amount of energy and water they use.
"CEOs ignore this environmental movement at their own peril," said Steve Hellem, executive director of the Global Environmental Management Initiative, a Washington, D.C.-based non-profit organization whose members include Kraft and other large corporations.
"If a company is identified as environmentally irresponsible, it will hurt their reputation and brands. The food companies know they need to focus on this, but they are still trying to figure out what to do," he said.
Sara Lee got the message after bombing in a recent ranking: New Hampshire-based advocacy group Climate Counts gave the Downers Grove foodmaker 2 out of 100 points for its reporting of green policies and efforts to reduce its impact on the environment.
Audra Karalius, Sara Lee's vice-president in charge of environmental issues, said the score was the result of not providing information to the group. The company is working to improve its rating, she said.
"The food industry has never been under siege before about environmental issues," she said. "But that is changing, and we have learned that if we don't talk about it, people assume you aren't doing it."
Two weeks ago, Sara Lee added a section to its Web site detailing its commitment to environmentally friendly practices. In the next six months, Karalius said, the company plans to provide more specific information about water and energy usage.
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She said Sara Lee is reconfiguring its distribution centers so it can shorten its truck routes and save more than 240,000 gallons of fuel in the coming year. The company also is looking at alternative energy: After studying windmills to power its New Mexico bakery, Sara Lee opted for solar panels.
Kraft reports on its Web site that it has decreased energy usage by 14 percent in the last five years. The Northfield company is powering about a third of a New York plant with methane gas created by adding bacteria to whey, a byproduct of cream cheese production.
It also has repackaged its Miracle Whip in plastic containers instead of glass, reducing the number of trucks needed for distribution, a spokeswoman said.
"There is definitely increased awareness around global warming with Al Gore winning the Nobel Peace Prize," she said. "Consumer awareness is definitely higher than it has ever been."
At least 30 percent of shoppers look for environmentally friendly products and packages when selecting brands, according to a study released this month by Chicago-based market researcher Information Resources Inc.
Investors are taking notice, too. Some Wall Street firms, including Goldman Sachs Group Inc., have begun to review companies' environmental policies as part of their investment research reports.
Boston-based consultant Ceres Inc. runs the Investor Network on Climate Risk, a group of more than 60 institutional investors who manage a total of $4 trillion in assets. The network looks at how companies set environmental policies and deal with climate change.
Institutional investors "want to know how companies are positioning themselves around this risk," said Andrea Moffat, a Ceres director.
These changes can be costly for food companies that have thin profit margins. Kraft and Sara Lee decline to comment on the cost of their green initiatives.
Publicly reporting energy and water use will become increasingly important for the companies as they compete for the environmentally conscious consumer, said Paul Dickinson, CEO of the Carbon Disclosure Project, a London-based non-profit whose Web site tracks corporate greenhouse gas emissions data.
"If you are part of the solution, you will make a lot of money," he said. "And if you are part of the problem, you will go bust."
