“Mission only accomplished when we become superfluous”

“There is something weird in our economic system. You deduct from a lorry, but not from the natural and social capital you use. We would rather shift those costs to our children, that is not right.” This is the firm conviction of Eosta manager Volkert Engelsman. With the revelatory True Cost of Food campaign, the importer and distributor of fresh organic fruit and vegetables makes a case for more fairness and transparency in the supply chain. “The hidden social costs of producers should become more transparent. Even if the numbers are not in your favour. Only then can consumers make an informed purchasing decision that does justice to their health, the environment and decent working conditions,” Volkert resolutely says.

Volkert has noticed that the sustainability discussion has got into its stride in society. “Ever more parties realise that sustainability should become part of the economy’s DNA, of our profit definition. They plead that you can no longer speak of profit or a fair price as long as production comes at the cost of people and planet, of fertile soils, the climate or just working conditions for people. That redefinition is not just initiated by activists and social organisations, but increasingly often by large financial institutions, including accountancy offices such as Ernst & Young, KPMG, PWC and Deloitte as well.” A step in the right direction, but practice often leaves much to be desired, according to Volkert. “We find people and planet increasingly important, but the market system is still too addicted to a one-sided profit definition that only serves the short term, and in which the liability principle cannot be found.”

“The real price of food on the shop floor is not just calculated per kilogram, but also per hectare. Cultivators deserve to be compensated for soil structure, clean surface water, biodiversity and initiatives that contribute to the binding of greenhouse gases,” Volkert continues. Eosta therefore expands the True Cost of Food campaign with the so-called True Cost Accounting in Food, Farming and Finance pilot, in close cooperation with banks, food companies the Natural Capital Coalition, the WBCSD (World Business Council for Sustainable Development) and various departments of the United Nations, including the FAO. Volkert thinks it is a great honour that Eosta gets to shape the central pilot.

“We can be a pacesetter in that, but you naturally also need partners to scale it up. For that, it is important that this vision is embedded in major international forums. And that is what we are doing. It is remarkable that the Dutch horticultural sector is not much represented in that. We are too busy working on the world within our fences, while so much distinctive and competitive capital can still be got from the market. All you have to do is hop the fence.”

Investors, banks and entrepreneurs are increasingly often willing to give account about finances, but also about natural and social capital. “If you correctly calculate the true costs, the so-called profits immediately look different. Climate change is costing society a ton of money in the eyes of commander-in-chief Tom Middendorp. Much social unrest, such as in Syria right now, for example, is related to climate change.”

But these questions are also important closer to home. Volkert gained national fame with his call for more transparency in supermarkets in the Financieële Dagblad. He stepped into the breach for cultivators for whom it is becoming more difficult to stand up for social interests such as soil fertility, clean surface water, biodiversity or fair working conditions for their employees because of the ‘race to the bottom.’ “In that interview, I was not so much concerned with a specific retailer, but with exposing the perverted incentive of a failing system. A system that still shifts the costs of social damages to future generations. That vision was widely welcomed, we received nothing but statements of sympathy, also from the conventional sector. And from Albert Heijn, which indicated to also strive for more transparency and sustainability in the supply chain, with an eye for the actual costs. Those conversations are in full swing.”

“Thanks to this discussion, cultivators are feeling as if they are heard, and they rightfully are coming to the foreground more. One of the reasons that we are a European market leader, is because we have a loyal and strong cultivator pool. We make the unique story behind every cultivator transparent, as well as their contribution to a better environment and better working conditions. Our communication campaigns are now focused on making clear that organic is not too expensive, but that conventional is too cheap. It is even more noticeable in the Netherlands. Because we are a transit country, prices for organic product quickly stand out compared to the low prices of their conventional counterparts.”

“It was not too long ago that the chief of the Sioux reached the front page of the FD when he singlehandedly blocked an oil pipeline,” Volkert says. An odd combination at first sight, a newspaper that traditionally serves the interests of the financial markets. “In the past, reports like that were not taken seriously at all, they were jeered, even. And now? People think twice before putting an old school oil pipeline in a nature reserve while the rest of the world is becoming more sustainable.”

“And what about Robeco’s investment fund, which coolly announces that Shell should deduct half of its oil, gas and coal reserves as stranded assets. Reserves that should never again get an economic value if we want to keep to the Paris climate accords. That has enormous consequences for the financial markets. Only one-fifth of all fossil fuels can be used if they do not want to exceed the fixed standard of the temperature rise of two degrees at most. Even before the limit is reached, people will become aware that the remaining materials should not be used anymore, and therefore no longer represent an economic value.”

Traditional economic models are only of limited use in the current zeitgeist, Volkert wants to illustrate with these two examples. He pleads for looking at profit and loss accounts differently. “As a sector we would do well to not just measure climate, fair working conditions and soon health effects, but to also provide these with a price, that is, monetise it.”

Eosta’s prices for its year-round supply of greenhouse vegetables and overseas fruit are coupled, by means of the laureled Nature & More trace & tell system, to the ecological and social footprint of the products involved. Even when that is not to the company’s advantage. Volkert is convinced that much competitive benefits can still be gained for mercantile houses for fruit and vegetables with more transparency of the social impact of their products. “No sustainability without transparency.”

“As we believe in an economy in which people are central, we also believe in agriculture in which the cultivator becomes central again, instead of the commodity. We have to de-anonymise. Anonymity in supply chains is often equivalent to exploitation. It is much easier for someone to exploit someone else when they do not know the other person. Ostrich tactics pur sang. The trace & tell system from Nature & More prevents that. We take your head from the sand. More than that, we lift you up, so that you can see the horizon again,” Volkert smiles.

Sometimes, a company can acknowledge blame to that end, the Eosta manager has proven. “Ninety-nine per cent of overseas fruit and the exotics within our system is shipped as seaborne cargo. Not because we are against airborne cargo, because we also have that. For example, we fly in legumes from Kenya and Egypt. People then point out the environmentally unfriendly character to us. And we agree with them wholeheartedly. You’d be scared silly realising how much pollution airborne cargo causes. However, that is no reason to keep it quiet. We publish these kinds of emission figures on our website. But we also publish what the cultivators do with their returns on a social level. That their children can go to school, that they are given further training, amass a higher income, so that they can also create a local sales market. This is not fiction, but reality. In Egypt, 99 per cent of the cultivation was mean for export, now, that same percentage is sold locally. It can be a stepping stone towards the development of a local sales market and more prosperity for cultivators. Our approach is to not be for or against something in principle, but we allow consumers to make a thorough and informed purchasing decision.”

It is also a thorn in Eosta’s flesh that the average retailer often presents organic fruit and vegetables in a manner that devalues the progressive and ecological manner of production the sector wishes to propagate. Many organic products are presented in plastic punnets with plastic film in order to be distinctive from non-organic products. “Exceptionally annoying. Consumers want an organic product because they believe in its environmentally friendly character, preferably without packaging. And rightly so! Our own carbon assessments indicate that not transport, but packaging have the most influence on greenhouse gas emissions. Transport accounts for no more than two per cent of the emissions.”

Eosta therefore went looking for a solution to that dilemma. That solution was found in natural branding, pigmentation by means of light treatment. The concept has been around for longer already, but is only now usable in practice without the shelf life of the products being compromised. The process is optimised in such a way that the light beam just touches the surface of the product. As soon as you scrape the skin of the product with a small knife, the pigmentation disappears. Swedish supermarket chain ICA is the first to use this technique, and will soon offer the first marked sweet potatoes and avocados. “It speaks for itself that we will soon start implementing this concept on a larger scale, not in the least to recover the cost on the investment as soon as possible.”

The method is available as open source, because Eosta does not believe in forced exclusivity. Volkert’s call is therefore remarkable. “We hope everyone copies this technique, especially our competitors. They can then also immediately implement our True Cost Accounting model, and copy our trace & tell system. The more sustainability and transparency, the better. Even if that were to imply our role would be over. Our mission would then be accomplished, but unfortunately, that is not yet the case.”

For all of Eosta’s idealism, it also remains a commercial enterprise. In the coming calendar year, Volkert expects overseas citrus, grapes, top fruit and exotics to take flight. “There is a lot of tension on the market for citrus, partially because of the FCM and CBS problems from South Africa. However, Eosta has a good point of departure thanks to the broad supply from a number of diverse countries.”

Volkert further expects that organic fresh produce will make up at least ten per cent of total sales in 2020. “Sometimes, things are more nuanced than statistics would have you believe,” Volkert warns. Organic appears to be a relatively small part of the food market in total. However, in that total food market, convenience products are also taken into account, which are not very popular among the organically oriented audience. When you pick out specific products separately, percentages shoot up. Many retailers abroad replace part of their product range completely with organic. For such retailers, similar products then suddenly have a market share of the complete 100 per cent.

And finally, Volkert predicts that sustainability themes will also be placed more and more prominently on the public agenda. Not so much because of political decision making, but because it will be driven by the private sector. “What is the Dutch fruit and vegetable sector doing as private sector in the field of sustainability? Will we stick to the familiar buy low, sell high? Or will we position ourselves as a guiding country and start focusing on the next point on the agenda? Would it not be fantastic of the Netherlands becomes the leader in horticulture? And leads the propagating of the proactively healthy benefits of fruit and vegetables? There are such wonderful initiatives in the Netherlands, why are those passing by the fresh produce sector? Get on with it!” Volkert concludes.

More information:
Eosta
Volkert Engelsman