Sustainability programs can deliver value for poultry companies
Representatives from poultry and egg producers say that sustainability and corporate social responsibility programs have delivered tangible business benefits.
“Now, having a good CSR [corporate social responsibility] program is a competitive advantage which makes you more attractive to customers,” said Don Adams, vice president, sustainability, Keystone Foods. “In the future, it may be necessary to have a good CSR program to have a seat at the table [with customers].” Adams told the audience at the 2012 Animal Ag Sustainability Summit, which was held prior to the International Poultry Expo in Atlanta in January, that sustainability is a component of Keystone’s KeyStar corporate social responsibility program.
Paul Helgeson, sustainability manager, GNP Company, said, “We believe that through resource efficiency and effective stakeholder engagement, sustainability can create a long-term competitive advantage.”
Some poultry companies have begun sustainability programs because of requests or requirements from large international customers like Walmart and McDonald’s. Sustainability can be defined in a number of different ways. Alan Andrews, director of marketing, Cal-Maine Foods Inc., said that at its core, “sustainability is the capacity to endure through a culture focused on the long-term wellbeing of our employees, laying hens, customers, suppliers, the environment and the communities where we live and work. Not sustaining the wellbeing of any one of these has the potential to significantly impact Cal-Maine’s long-term success and or existence.”
Sustainable means survival
Andrews presented examples of companies that have not had a sustainable business model and failed, such as personal computer pioneers Compaq and Osborne, Harvard Graphics, Northwest Airlines and others. Some of these companies had well known brands and were innovators in emerging industries, but could not survive despite their initial success. He said that Cal-Maine’s mission statement for the sustainability program, “To be the most sustainable producer and reliable supplier of consistent high quality fresh egg and egg products in the country, demonstrating a culture of sustainability in every thing we do,” captures the significance of the program to the company’s future.
Sustainability is more than just environmental programs, according to Andrews. Worker health and safety programs were cited as an important part of sustainability because the company can’t survive without its people.
Adams said that previous success with employee involvement in safety programs at each location was used as a model for rolling out the KeyStar corporate social responsibility program at Keystone Foods. Adams said that the lessons learned from the success of safety programs at Keystone were that individual locations must take ownership of the program, demand continuous improvement without dictating goals, recognize accomplishments and communicate results globally. This approach has yielded strong results for Keystone’s safety programs. Dr. Ken Opengart, vice president, live operations, Keystone Foods, reported that all of Keystone’s U.S. poultry operations have accident incident rates below the industry average and five out of the seven are less than half the industry average rate.
Andrews said that Cal-Maine assumes that 100 percent of all workplace accidents are preventable and works to instill this in all employees. He said that employees respond to what they see more than to what they hear, so it is important to lead by example. “Sustaining a safe work environment is our highest priority, and that must be obvious to everyone,” he said. “Everyone needs to be safe and healthy both on and off the job.” To help keep employees safe, even when not on the job, Cal-Maine encourages employees and their families to do things like drive defensively and take safety courses focusing on their hobbies like hunting or boating. The company also supports health and wellness management for employees and their families.
Andrews said that three quarters of health care costs are related to preventable diseases like diabetes, heart disease and stroke. According to healthcare experts, 80 percent of heart disease, stroke and diabetes and 40 percent of cancers can be eliminated through proper diet, increased physical activity and smoking cessation. Focusing employees on taking action to improve their long-term health is part of sustainability for Cal-Maine.
Environmental projects with payback
Opengart provided some examples of Keystone’s successful environmental projects. Methane captured from a covered anaerobic wastewater treatment lagoon at the company’s Albany, Ky., plant was being flared off. Now a dedicated boiler system burns the biogas to heat water used in the processing plant. In 2011, 41,038 million standard cubic feet of gas were captured and burned which replaced the equivalent of 341,500 gallons of liquid propane. The first year savings were $572,661 and the project had a return on investment of less than 10 months.
Another successful project was the installation of a boiler heat stack economizer and moisture control system at the company’s Eufaula, Ala., feed mill. Waste heat from the boiler exhaust system is used to preheat water that becomes boiler make-up water and water used in the conditioner for the pellet mill. This system reduces total energy usage, improves pellet quality and bird feed conversion. The projected annual savings for the project are over half a million dollars and the payback is around five months (See Table 1).
Opengart said that the Eufaula feed mill sustainability project was a good example of how you need to look at all aspects of a project’s impact to figure out the costs and benefits. The savings in feed conversion resulted from the improved pellet quality and these savings need to be factored in to reveal the total value of the project.
Bird welfare part of sustainability
Opengart said that animal welfare is part of the KeyStar program. In the Camilla, Ga., complex, Keystone inspects birds for damage prior to the picker by flock and reports these results back to the catch crews. Daily feedback gives the crews a report card on how the flocks that they caught looked at the plant. In 2009, the company started an incentive program for the catch-crew personnel focused on reducing wing damage. Since 2008, this complex has experienced a 29 percent reduction in the amount of pre-picker wing damage, which is estimated to be worth $175,000 over the course of a year.
Make sustainability part of your culture
In order for sustainability program to be effective it has to become part of the company’s corporate culture, just as an effective safety program does. An effective sustainability program is not just what a company does so that it can bid on business with customers who have required it from suppliers. Sustainability programs don’t have to be a net cost for poultry companies.
When commenting on the value of a sustainability or corporate social responsibility program, Adams explained, “Our CEO once said, ‘It is the right thing to do and it makes good business sense.’ It does deliver value.”