Have your say in October... Lucas Simons from the Netherlands!
What other ways do you think will drive us to a sustainable future? Please share your thoughts in the comment section below, we'd love to read all of them!
"If you trully want to transform markets you need to change the rules of the game and prevent the sector from becoming unsustainable".
By: Juan David Hernández, MBA candidate.
In October we got deeper into the sustainability certification labels topic and share insights with Lucas Simons, founder and CEO of two companies: NewForesight, a strategic consultancy company working on sustainable market transformation, and SCOPEinsight, a farmer organization assessment company that bridges the gap between professional farmer organizations, markets and sources of finance. This guy knows exactly where the gap between small farmers and big agriculture companies is but also the role of sustainability in the business. Let's go!
Florverde® Sustainable Flowers: Why is it important to stimulate sustainable products in global markets?
Lucas Simons: Because if we don´t, we are left with sectors and producing systems were it is only about the lowest price, cheap food and as soon as the systems only care about it, we will promote a system of rewards of unsustainable behaviour so the farmer who cuts the rainforest or uses child labour gets the business. We are getting undesired side effects because we are rewarding the wrong behaviour and we are punishing the right behaviour. The biggest questions that we have to answer as stakeholders in agriculture are: what is important? what is is the quality? what is the value? how do we recognize it? how do we measure it? how do we value it? That means those who are able to deliver it should get the recognition and should get rewarded for it. Now you have sectors that rewards quality, innovation, environmental protection and entrepreneurship. We are seeing that marks that rewards unsustainable behaviour are becoming less vital whereas those that rewards all these aspects are more vital.
FSF: Are we taking about European markets specifically?
Lucas: No, this is a global game. This is happening in global markets: palm oil, coffee, soy, cotton and so on. It is not enough for just one country or continent like Europe to say we have certain standards. For example, we see this in the tea sector where 80% of the tea is consumed locally and 20% of the tea goes to western markets so what does it matter if 20% of the consumers demands higher standards and you still have 80% of unsustainable markets? Eventually, this is a global game but it takes time before the whole industry and sectors reach this level. It is important to work with first movers like the European Union but it doesn´t stop there, it is only the first step.
FSF: What are the driver forces of changing global markets towards sustainability?
Lucas: There are four forces that drive sustainability. The first one is how easy or difficult it is to be a farmer. What we see is in many commodity sectors it is quite easy to find opportunities in these markets. The second one is what does the market reward? We have to analyse if markets reward only lowest price or quality aspects. The third force is regarded to governments or sector organizations and how we organize our selves, if we give farmers what they really need because in many countries farmers are left to their faith so it is about how are we supporting them in an enabling environment. The forth one is how can farmers move out. Are they dependent to their livelihoods? Or are they struggling to remain being a farmer? It is about how these four forces work together to shape the outcome of agricultural production. If markets don´t care as long as products are cheap, governments are not doing the things to support agriculture and farmers cannot get out and they stay in the bottom, the sector start to compete with poverty. When famers have to accept low prices because they need to survive, now you probably have a failing system. The only way to change agriculture is to look at these forces and think: what does the market reward? does it reward quality? who are the farmers of the future? how do we stimulate them? what is the role of the government? That is how we change the rules of the game.
FSF: From your experience, what are the phases or stages of sustainability in the organizations?
Lucas: It is true that markets change but they have similar phases. When there’s an issue within the sector (it could be poverty, child labour, plant diseases, low prices or climate change that affects crops). We first start denying the issues and then we do projects because we don´t know what else to do. The second phase is very important because it begins to change and figure out how to compete. As soon as you get first movers, you have second or third movers that are doing something similar but slightly different (that is competition) so that is great. Then, you can move to the next phase and make a separation between what it is competitive and what is not competitive.
For example, climate smart is great if you compete on your technology or your way of doing things but suddenly you will need to think on research or how your are doing things. It is about growing up as a sector and starting seeing these things that finally will become a norm. These are the maturity phases and once you have to think how you can accelerate it, go quicker and more efficiently.
FSF: Are there any phases in regards of sustainability from the consumer perspective?
Lucas: That is a very good question. These four phases that I just described from an industry or sector are not necessarily the faces from the consumer point of view. The consumer (at least in western markets) goes from a non-interest to an increasing interest. People want to see action and movement. This is where labels play an important role when consumers feel they can do something when they buy their products. However, if we have a lot of labels the consumers will start to lose interest as they might be feeling like everything is solved so apparently they are already contributing to a better world.
Moreover, regular consumers also have a lot of things in their minds: they have to buy thousands of products every year, they have troubles in their jobs, they don´t have a lot of money, they have issues at home. As a result, consumers say: if you want me to buy it, you have to take care of it.
FSF: What are the real benefits of the sustainable market transformations and what is the role of certification labels such as FSF?
Lucas: If you trully want to transform markets you need to change the rules of the game and prevent the sector from becoming unsustainable. Certification labels are good to treat patients with a bad lifestyle and get them to be healthier. In this sense, the role of certifications is very important and limited at the same time: it is important because it enables you to link the issue of sustainability to the competitiveness of your brand and differentiate yourself. In fact, that´s what competition is all about. However, at some point it will become so costly and you will have to start working together with others.
Standards like Florverde are fantastic and they are part of the process of getting to truly sustainability. The certification is a tool, but is not sustainability itself. Standards are great but the will not solve everything. Therefore, we will need to start working together in order to change the rules of the game.
In October we got deeper into the sustainability certification labels topic and share insights with Lucas Simons, founder and CEO of two companies: NewForesight, a strategic consultancy company working on sustainable market transformation, and SCOPEinsight, a farmer organization assessment company that bridges the gap between professional farmer organizations, markets and sources of finance. This guy knows exactly where the gap between small farmers and big agriculture companies is but also the role of sustainability in the business. Let's go!
Florverde® Sustainable Flowers: Why is it important to stimulate sustainable products in global markets?
Lucas Simons: Because if we don´t, we are left with sectors and producing systems were it is only about the lowest price, cheap food and as soon as the systems only care about it, we will promote a system of rewards of unsustainable behaviour so the farmer who cuts the rainforest or uses child labour gets the business. We are getting undesired side effects because we are rewarding the wrong behaviour and we are punishing the right behaviour. The biggest questions that we have to answer as stakeholders in agriculture are: what is important? what is is the quality? what is the value? how do we recognize it? how do we measure it? how do we value it? That means those who are able to deliver it should get the recognition and should get rewarded for it. Now you have sectors that rewards quality, innovation, environmental protection and entrepreneurship. We are seeing that marks that rewards unsustainable behaviour are becoming less vital whereas those that rewards all these aspects are more vital.
FSF: Are we taking about European markets specifically?
Lucas: No, this is a global game. This is happening in global markets: palm oil, coffee, soy, cotton and so on. It is not enough for just one country or continent like Europe to say we have certain standards. For example, we see this in the tea sector where 80% of the tea is consumed locally and 20% of the tea goes to western markets so what does it matter if 20% of the consumers demands higher standards and you still have 80% of unsustainable markets? Eventually, this is a global game but it takes time before the whole industry and sectors reach this level. It is important to work with first movers like the European Union but it doesn´t stop there, it is only the first step.
FSF: What are the driver forces of changing global markets towards sustainability?
Lucas: There are four forces that drive sustainability. The first one is how easy or difficult it is to be a farmer. What we see is in many commodity sectors it is quite easy to find opportunities in these markets. The second one is what does the market reward? We have to analyse if markets reward only lowest price or quality aspects. The third force is regarded to governments or sector organizations and how we organize our selves, if we give farmers what they really need because in many countries farmers are left to their faith so it is about how are we supporting them in an enabling environment. The forth one is how can farmers move out. Are they dependent to their livelihoods? Or are they struggling to remain being a farmer? It is about how these four forces work together to shape the outcome of agricultural production. If markets don´t care as long as products are cheap, governments are not doing the things to support agriculture and farmers cannot get out and they stay in the bottom, the sector start to compete with poverty. When famers have to accept low prices because they need to survive, now you probably have a failing system. The only way to change agriculture is to look at these forces and think: what does the market reward? does it reward quality? who are the farmers of the future? how do we stimulate them? what is the role of the government? That is how we change the rules of the game.
FSF: From your experience, what are the phases or stages of sustainability in the organizations?
Lucas: It is true that markets change but they have similar phases. When there’s an issue within the sector (it could be poverty, child labour, plant diseases, low prices or climate change that affects crops). We first start denying the issues and then we do projects because we don´t know what else to do. The second phase is very important because it begins to change and figure out how to compete. As soon as you get first movers, you have second or third movers that are doing something similar but slightly different (that is competition) so that is great. Then, you can move to the next phase and make a separation between what it is competitive and what is not competitive.
For example, climate smart is great if you compete on your technology or your way of doing things but suddenly you will need to think on research or how your are doing things. It is about growing up as a sector and starting seeing these things that finally will become a norm. These are the maturity phases and once you have to think how you can accelerate it, go quicker and more efficiently.
FSF: Are there any phases in regards of sustainability from the consumer perspective?
Lucas: That is a very good question. These four phases that I just described from an industry or sector are not necessarily the faces from the consumer point of view. The consumer (at least in western markets) goes from a non-interest to an increasing interest. People want to see action and movement. This is where labels play an important role when consumers feel they can do something when they buy their products. However, if we have a lot of labels the consumers will start to lose interest as they might be feeling like everything is solved so apparently they are already contributing to a better world.
Moreover, regular consumers also have a lot of things in their minds: they have to buy thousands of products every year, they have troubles in their jobs, they don´t have a lot of money, they have issues at home. As a result, consumers say: if you want me to buy it, you have to take care of it.
FSF: What are the real benefits of the sustainable market transformations and what is the role of certification labels such as FSF?
Lucas: If you trully want to transform markets you need to change the rules of the game and prevent the sector from becoming unsustainable. Certification labels are good to treat patients with a bad lifestyle and get them to be healthier. In this sense, the role of certifications is very important and limited at the same time: it is important because it enables you to link the issue of sustainability to the competitiveness of your brand and differentiate yourself. In fact, that´s what competition is all about. However, at some point it will become so costly and you will have to start working together with others.
Standards like Florverde are fantastic and they are part of the process of getting to truly sustainability. The certification is a tool, but is not sustainability itself. Standards are great but the will not solve everything. Therefore, we will need to start working together in order to change the rules of the game.
What other ways do you think will drive us to a sustainable future? Please share your thoughts in the comment section below, we'd love to read all of them!
