Thursday, April 9, 2009

Competitor News: One Year Since Eliminating Plastic Bags in Stores Whole Foods Market Says Reusable Bag Use Tripled; 150 Million Bags Out of Landfills

Green Retailing Special Report: Single-Use Plastic Carrier Bags & Reusable Bags

Nearly one year ago, on Earth Day, April 22, 2008, Whole Foods Market, Inc. eliminated offering free single-use plastic carrier bags as an option in all of its stores in the U.S., Canada and the United Kingdom. Instead, Whole Foods' decided to offer shoppers only free 100% recyclable paper grocery bags (made from at least 50% post-consumer recycled paper), along with making a major push to encourage customers to bring there own reusable shopping bags with them to the stores, as well as offering a variety of reusable bag varieties for sale at a variety of price points in its natural and organic foods markets.

A.C. Gallo, Whole Foods Market, Inc.'s co-president and chief operating officer says the Austin, Texas-based natural grocery chain decided to eliminate the single-use plastic carrier bags on Earth Day last year "in an effort to help protect the environment and conserve resources, a move that aimed to protect nature and wildlife and reduce litter by encouraging customers to bring reusable bags when they shop for groceries." [Fresh & Easy Buzz, April 21, 2008: Earth Day 2008: Whole Foods Market, Inc. Becomes the First Major U.S. Food and Grocery Retailer to Stop Using Single-Use Plastic Carrier Bags Tomorrow.]

Last year hundreds of Whole Foods Market's store-level team members joined the non-profit Ocean Conservancy group's annual coastal cleanup day in which thousands of volunteers pick up litter and catalog what they found along beaches and coastal waterways throughout the world.

"During Ocean Conservancy's 2008 International Coastal Cleanup, 1.4 million plastic bags were found littering our oceans, lakes and rivers," says Dianne Sherman, Director of the International Coastal Cleanup. "Trash travels. Even if we live thousands of miles inland, our actions have a profound effect on the ocean. A bag can blow from a picnic table, wash down a storm drain into a river and wind up harming or killing a sea turtles, birds or other marine life. Trash is one of the most pervasive - but solvable -- pollution problems facing our oceans and waterways. Whole Foods Market and their customers are demonstrating how simple lifestyle changes can make a sea change."

When it eliminated the plastic grocery bags last year from the checkouts in all its stores Whole Foods Market became the first major U.S. grocery chain to do so.

Whole Foods Market operates 279 stores. All but 11 (six in Canada and five are in the United Kingdom. Whole Foods' currently has 53 natural and organic foods supermarkets in California, seven stores in Arizona and five stores in Nevada, which are the three states where Tesco's Fresh & Easy Neighborhood Market operates its current 116 grocery and fresh foods markets. Whole Foods Market, Inc. had 2008 sales of $8 billion, which ranks it as the 21rst highest grossing overall food and grocery chain in the U.S., according to a number of industry rankings.

Gallo says that in the one year since Whole Foods' eliminated the single-use plastic carrier bags from all of its natural foods supermarkets the chain has seen the amount of reusable bag use among its customers triple. Additionally, Gallo says that the natural and organic grocer has kept an estimated 150 million plastic bags out of landfills since last Earth Day.

That's a considerable amount of plastic bags for one food retailing chain with just under 300 stores to keep from going into municipal landfills, which is where most of the single-use bags go because there isn't a comprehensive recycling system for the plastic bags in the U.S. like there is for paper grocery bags.

"At first we wondered if shoppers would just switch to paper but to our great surprise, people have been truly excited about using reusable bags," Gallo says. "I think Whole Foods Market has also helped that along by offering various versions of stylish, affordable 99 cent bags that have become quite popular - our shoppers have been inspired to make a positive environmental change and have really incorporated the reusable bag mindset into their daily lives. Eliminating plastic bags was definitely the right move at the right time."

Whole Foods' sells a variety of reusable bags in its 279 stores in the U.S., Canada (six stores) and the United Kingdom (five stores). Its value-oriented "A Better Bag," which sell for 79 and 99-cents respectively, depending on size, is constructed primarily (80% of its content) from recycled plastic bottles. The bags currently feature a charcoal sketch of a tree drawn and signed by singer Sheryl Crow.

The natural grocery chain also sells a variety of lower -to- mid-ranged priced reusable tote bags on up to its premium $29.99 cotton and burlap FEED 100 bag. Each FEED bag purchased by shoppers helps provide 100 nutritious lunches to hungry Rwandan school children through the United Nations World Food Program's School Feeding Program, as part of charitable program Whole Foods Market contributes to.

Whole Foods Market also offers customers a refund of either five or 10 cents per-reusable bag used at the stores' checkouts. The amount varies depending on the store and where it is located.

Paper bag use has increased at Whole Foods' stores since the retailer self-banned the plastic bags nearly a year ago. We know this because we've talked to store-level employees in at least 40 Whole Foods Market stores over the last year who have told us this is the case. However, that's to be expected, and we have no problem with it for a couple reasons.

First, the paper grocery bags are 100% recyclable. Nearly every city and town in the U.S has convenient, curbside recycling programs. And many of the smaller town that don't have the curbside programs allow resident to toss their paper waste into their green waste garbage cans. Since paper, including paper grocery sacks, is compostable, the disposal companies turn it and the green waste into compost which the towns use in parks and also sell to companies and often give away for free to town residents to use in their gardens.

Additionally, the paper bags used at Whole Foods Market stores are at made from at least 50% post-consumer recycled materials, and the grocer is working on 100%. This means the bags a shopper gets today came from at least half of a bag that was recycled and turned into the new bag.

Unfortunately single-use plastic carrier bags are seldom recycled in the U.S., largely because there isn't a comprehensive recycling system established to do so . Few if any curbside recycling programs allow single-use plastic carrier bags, for example.

In states like California and New York, supermarkets are required by state laws to place bins in the stores so that shoppers can return the plastic bags. The retailers also are required to arrange to have the bags picked up by a company that will have them recycled.

But the simple fact is that American consumers generally will only recycle if its convenient to do so, which is why residential the curbside system works best. Before that cities used drop off centers. Recycling rates were minimal. Curbside increased the rates dramatically.

In addition, only about three or four states have such laws.

In 2007, Whole Foods Market introduced all-natural fiber packaging at its in-store salad and food bars that comes from plants that grow wild or are cultivated and harvested annually.

Whole Foods' says it's currently searching for alternatives to its use of plastic bags and plastic containers in its stores' produce, seafood, bakery and bulk foods departments, according to Gallo. Since customers generally use a single plastic bag for each individual item purchased in these departments, that adds up to using lots of these single-use small bags storewide for Whole Foods.

Any replacement bag for these uses though requires that the material used in the bag is food grade, since it will be coming into contact with fresh and ready-to-eat foods.

Before the invention of the plastic bag for use in produce and plastic bags and containers for in-store bakery, supermarkets used paper bags and paper boxes (remember those pretty pink bakery boxes?) in these departments.

Some supermarkets still use paper along with plastic in their in-store full service bakeries. However few do largely because the cost of plastic is cheaper.

Switching to paper is something we think Whole Foods should take a look at and consider for both bakery and bulk foods. It's a bit more difficult for produce, although their are supermarkets that still offer a choice of plastic and paper bags for shoppers in the produce departments. Paper can be used to wrap fresh fish but usually stores put it in a bag first in order to preserve its freshness. That could be more difficult to find a solution for.

One of the reasons retailers like using plastic in produce, bakery and bulk departments is because the store checkout clerks can see the item through the bag, which speeds up checkout. However, we think in the case of bakery and bulk, going to paper for Whole Foods wouldn't slowdown checkout all that much, particularly once the clerks got used to peeking inside the bag when the need to, mostly in the case of produce since the bulk bags are supposed to be identified by code numbers anyway.

It would be hard of course to go to paper completely in any in-store bakery we realize because in some cases clear packaging, prepacked cakes and the like, is needed to display the product in self-service. But items in the full-service cases could be packaged using paper bags without much difficulty. Safeway Stores, Inc. for example does this in its stores, using a mix of paper (for service bakery) and plastic.

Of course, a truly biodegradable-compostable plastic bag for seafood, fresh meat, produce, bakery and bulk that doesn't cost retailers an arm and a leg would be a great solution. But none are available at a decent cost yet on the market that we've been able to find.

There is a slow behavior change going on among consumers in terms of bringing their own bags to the grocery store. And since Whole Foods Market happens to cater to the "greenest" of "green" consumers it's likely the behavior change is and will always be more dramatic in its stores, compared to say conventional supermarkets.

But with steady education, along with economic incentives designed to decrease plastic and even paper bag use by shoppers, its our analysis that over the next few years we will see more and more shoppers, regardless of where they shop, bringing there own bags to the grocery store.

In fact, it is some of the no frills, deep-discount grocery chains like Germany-based Aldi (Europe and the U.S.) and Lidl (Europe), and Supervalu's Sav-A-Lot (U.S.) that are leading the way in encouraging shoppers to bring their own bags to the store because they charge customers a small fee (usually five to 15-cents per-bag) for each single-use plastic bag they request at checkout, providing a small but still real economic incentive to shoppers to bring their own bags to the store. Many shoppers bring single-use plastic bags or paper bags from previous trips or from other stores with them to these stores, not just specifically designed reusable tote bags. Doing this takes the "single-use" out of the paper and plastic bags.

And of course more and more cities, counties and even states and nations (Ireland, China) have and are passing plastic bag ban laws or laws requiring shoppers to pay for the single-use plastic bags in stores if they request them. As more of these laws are passed, which they will be, that obviously will decrease the amount of single-use plastic bags used overall, both in the U.S. and globally.

For example, China banned the bags nationwide last year. That resulted in a huge global decrease in usage in one legislative fiat. And since passing a law three years ago that charges shoppers for plastic bags in retail stores in Ireland, the government says it has reduced the volume of single-use plastic carrier bags distributed by stores on the Emerald Island by a whopping 94%

Of course it would be better if consumers adopted the use of reusable bags without all the added new legislation.

What's needed are additional and new creative ways to change shopper behavior more towards the bring-your-own-bag concept, along with some solid economic incentives designed to move the behavior change along more rapidly. We see both coming, particualrly among first-mover food and grocery retailers.

Fresh & Easy Buzz Linkage - Related stories:

>April 21, 2008: Earth Day 2008: Whole Foods Market, Inc. Becomes the First Major U.S. Food and Grocery Retailer to Stop Using Single-Use Plastic Carrier Bags Tomorrow

>March 19, 2009: Another Tesco Fresh & Easy Future Market City Bans the (Plastic) Bag: No Plastic Carrier Bags In Palo Alto, CA Supermarkets Starting September 18th

>March 7, 2009: Analysis & Commentary: The Seven Retail Operations Changes Tesco's Fresh & Easy Neighborhood Market Needs to Make to Help it Get On the Success Track

>December 7, 2008: Fresh & Easy Offers New Definition of 'Double Bagging;' Says Sales of Reusable Bags Has Doubled Since Introducing its 99-Cent Bag in October

>August 13, 2008: Tesco to Offer Shoppers Free Plastic Bags in UK Stores Only if Requested; Still Offering Plastic Bags-Only in Fresh & Easy USA Stores; No Paper Option

>August 1, 2008: Bag Bans and Fees: Seattle, Washington Imposes 20-Cent Fee On Single-Use Plastic Carrier Bags; Bans the Use of Foam Meat Trays in Supermarkets

>July 23, 2008: Plastic or Plastic: Single-Use Plastic Carrier Bag Bans in California Cities Threatening Tesco Fresh & Easy's Free 'Plastic Bag-Only' Policy

>September 25, 2008: Competitor News: Wal-Mart Joins Tesco, Others in Announcing A Plastic Bag Reduction Program of its Own

>April 20, 2008: Earth Day 2008: California Bag-Fee Bill AB 2058 Passes California State Assembly Natural Resource Committee; Next Stop Appropriations Committee

>April 21, 2008: Earth Day 2008: City of Los Angeles, CGA and Southern California Grocery Chains Partner in Major Reuseable Shopping Bag Giveaway Promotion

>April 18, 2008: Earth Day 2008: New Issues Are Beginning to Emerge With Growing Consumer Use of Reusable Shopping Bags: Worker Injuries, Shoplifting, 'Double-Bagging'

>April 24, 2008: Legislation: Oakland, California's Plastic Grocery Bag Ban Law Not in the 'Bag' Yet

>April 13, 2008: California State Assembly Natural Resource Committee to Vote on Statewide 25-cent Single-Use Plastic Carrier Bag-Fee on Monday

>March 15, 2008: UK 'Banish The (Plastic) Bags' Campaign Update: Morrison's Latest to Make Announcement; Tesco Holds Firm

>March 5, 2008: Britain's 'Banish The (Plastic) Bag' Campaign and Tesco: London Street Artist 'Celebrates' the Tesco Plastic Bag; More UK Retailers to Charge Bag Fee

>March 8, 2008: More UK Retailers Jump On The 'Banish The (Plastic) Bag' Campaign.]

>March 4, 2008: "Message From Across the Pond: Tesco is Right Square in the Middle of the 'Banish the (Plastic) Bags' Campaign in the United Kingdom

>May 1, 2008: Green Retailing Report: UK Supermarket Chain Waitrose Creates A 'Reusable-Bag Only' 'Green' Checkout Lane in One of Its Stores

>April 21, 2008: Earth Day 2008: Massachusetts'-Based Stop & Shop Supermarket Chain and General Mills Launch Free Reusable Shopping Bag Cross-Promotion For Earth Day

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