Just over a year after the company launched a €25 million Sustainability Fund, the Musgrave Group announced last month that its SuperValu and Centra stores had reduced their carbon emissions by 9% in the past year. Group CEO Noel Keeley talks to Maev Martin about his ambition to make Musgrave the most trusted and sustainable business in Ireland.
The Musgrave Group is one of the largest companies, and one of the largest privately held companies, in the country.
“This means that we have a duty to contribute in a positive way to a sustainable future for everyone,” he says.
“We are a 147-year-old business that has proven itself to be sustainable, having been passed on from generation to generation.
“We want to run businesses that are commercially successful, but we also want those businesses to do good in the communities in which we operate.
"We want to grow a world class food and beverage business, but if we are to achieve that we must continue to invest in our brands, to invest in the partnerships we have with our independent retail partners, and to invest in the long-term sustainability of our business, and of society as a whole.
“Our values – honesty, working hard, achievement, long-term partnerships, and not being greedy – are very important to the business and have been for 147 years.
"We are an honest company to deal with and we regard any relationships that we have, whether with colleagues or our retail supply base, as being long-term.
"We are up against the biggest retailers and food services operators in the world, so we have to remain competitive.”
Noel is passionate about the broader sustainability agenda.
“We have never faced a bigger crisis than the one that we are facing into now,” he says.
“All we have to do is look at the weather patterns in the northern hemisphere. However, I think that because climate change doesn’t represent an immediate threat, it is hard to get people to realise how serious it is.
"Our experience with Covid proved that when there was a major public health crisis, we were able to protect ourselves, but we are not doing that when it comes to climate change.
"During the pandemic, Ireland’s death rate was much lower than other countries because we did what we needed to do, but if we don’t do something about climate change, at the pace that we need to do it, then our very existence will be threatened.
"The difference between Covid and climate change was that we always knew there would be a vaccine for Covid, but there is no cure for climate change, only prevention.
“That is why our industry needs to work together to do what we have to do to hand our environment on to the next generation in a manner that it is sustainable.
"The Musgrave Group believes, as I do, that the industry, and the leaders in the industry, must step up to the plate and do what is necessary to solve this problem.
"That will mean investment and an impact on the bottom line. We have shown our commitment with our Sustainability Fund, but the entire supply chain will have to invest in this.”
Musgrave’s Sustainability Fund
Musgrave’s Sustainability Fund, which focuses on the SuperValu and Centra brands, was launched in June 2022 and runs until the end of 2023.
The €25 million that is being invested in the fund is complemented by investments from SuperValu and Centra retailers, with a combined €27.7 million invested to date.
“430 retailers have availed of the fund so far, which is about 65% of the overall estate,” says Noel.
“Under the scheme, stores are allowed to draw down the funding for anything that will reduce their overall carbon footprint – it could be refrigeration, solar panels, packaging, or electronic shelf edge labels – and we have also supported putting recycling equipment into stores.
"It is all about stores implementing whatever measures they believe are necessary to support the overall sustainability agenda and our ambition as a business to achieve net zero by 2040.”
Last year, SuperValu launched its new food experience at its Dublin flagship store in Knocklyon as ‘an exemplar of the future of retail’.
SuperValu described the store as ‘revolutionising grocery shopping with a transformed food and enhanced sustainable experience’.
They recently launched another flagship store in Newcastle, Co Dublin.
“Our Knocklyon store is the most significant revamp that we have carried out in recent years,” he says.
“This store, and our SuperValu store in Newcastle, are exemplars in terms of what the fund can support and in terms of what we want to achieve around sustainable retailing and food.
"When it comes to sustainability, there are many other flagship stores in the Musgrave Group, including Kavanagh’s SuperValu in Westport, the Garvey Group stores, which are very committed to the sustainability agenda and, of course, our own stores.”
Building Sustainable Communities
Musgrave’s sustainability strategy centres around caring for the planet, creating vibrant communities, and sourcing for good.
“Building sustainable communities is hugely important and sometimes we forget the importance of a store in a community, but we learned that in a significant way during the pandemic because we couldn’t move and people realised how important it was to have a store nearby,” says Noel.
“In many ways, Covid highlighted the real purpose of our business, which was to make sure that we kept our supply chain clean and open in terms of people having access to food.
"The real heroes of that experience were the people who continued to go to work in stores and warehouses every day because without them our customers would not have had access to food.
"We now have an opportunity to think about how we can build better communities for the next generation. For example, the Tidy Towns competition started as a litter initiative and we think that can be expanded out now to a sustainability and bio-diversity initiative which impacts the entire community.
"We are working hard on that now to take it to the next level.”
Sourcing For Good
Like many other businesses, most of the Musgrave Group’s emissions are Scope 3, and the food supply chain is a huge contributor to emissions in terms of production, transportation and distribution.
“During Covid we needed food, shelter and medicine, so we can’t disrupt our food supply chain in a way that is detrimental to consumers, but we have to address this climate issue as a matter of urgency,” he says.
“That will mean having to invest, but it will arguably be the best investment we ever make because we will avoid, potentially, our extinction.”
When it comes to the achievement of Musgrave’s carbon emissions targets, Noel points out that the business is reliant on others in the supply chain to do what they need to do.
“That is the reality for most food retailers,” he says. “What that means, therefore, is that the entire supply chain has to move together to solve this problem.
“If we become net zero by 2040 and everyone else doesn’t do what is needed, then our impact can only be very slight, so the industry now needs to deliver on what it says it is going to do.
"Many companies make target statement but my experience to date is that, whether it is industry or government, we are not hitting these targets.
"We have to follow through and measure progress. If we don’t, we will miss the target, and if we miss it this time it could be potentially catastrophic.”
The Musgrave Group has been pro-active in seeking out and utilising alternative sources of fuel throughout the business.
“We need to look at new technologies like hydro-treated vegetable oil that comes out of the food service industry, is recycled and given some additives, and is a direct replacement for diesel,” he says.
“It reduces diesel emissions by 90% and our intention is to have half of our fleet operating on this by 2030.
"However, the challenge is that HVO is pegged to the price of diesel with a premium, so that is an industry problem for us.
"We need to accelerate the increase of alternative fuels and address how government and industry can work together in a sensible way that allows us to achieve our sustainability targets.
"Transport emissions have increased by 60% year on year and that comes predominantly from the supply chain.
"Also, a lot of our emissions come from beef and dairy. However, we need to make the required changes in a way that, on the one hand, doesn’t put our agriculture industry into commercial crisis, but on the other, allows us to make the changes we need to make to hit the targets we need to achieve.”
A National Effort
Noel would like to see a partnership between government, the retail industry, and the energy sector to co-ordinate the pivot to HVO and alternative fuels.
“The switch to alternative fuels such as HVO is a significant investment for any company that relies on diesel,” he says.
“If all industries worked together we would get a lot more done, but at the moment there isn’t a body championing that agenda and there is a need for an entity that represents producers, the transport sector, distributors, energy providers, and end users.
"The reduction of Scope 3 emissions isn’t being looked at collectively. No one is looking at it end to end, so government has a big part to play in helping businesses to achieve that green transition.”
As Group CEO, what are the key sustainability achievements of the Musgrave Group that Noel is most proud of?
“Firstly, I am proud of the fact that we are investing in sustainability the way we are – it has become a key pillar of our strategy and is supported wholeheartedly by our board,” he says.
“We have put our money where our mouth is in terms of investing in sustainability and accepting that this won’t come as a cost neutral initiative. I am proud that we are a business that lives our values and sets targets that we can achieve.
"However, we aren’t looking for kudos for having a strategy and setting targets. We want to be judged by what we do, not what we say we are going to do.”
Noel is also proud of the three pillars of the Group’s sustainability strategy.
“Our strategy is about protecting the planet by reducing emissions, caring for the communities in which we live and work, and making it easier for our customers to shop sustainably,” he says.
“In addition, Musgrave have shown leadership in this area. We were the first retailer to be named as a Sustainable Development Goal Champion in 2019 and that was renewed in 2023.
"We were also the first retailer to achieve Origin Green status, and we are now planning to move half our fleet onto HVO fuel by 2030, and that is a substantial investment as it is much more expensive than diesel. These are the type of steps that we believe are going to make a real difference.”
Making The Right Choice
Are shoppers aware of all the sustainability efforts that Musgrave is making, both in-store and in terms of how they operate as a business?
“I think there is some awareness, but the biggest challenge we have at the moment is that people need help to make the right decision,” he says.
“They don’t automatically know the right product to purchase, so we have to give them cues and clues in store to help them make the right choice.
"We have to figure out simple areas, such as POS, to help them make decisions around sustainable products.
“We have made progress on this, but there is more to do because people need guidance.
"One day, a woman tweeted a picture of a six pack of tomatoes from one of our stores and it said 100% recyclable packaging. She said that she knew this was the right choice to make and she praised us for helping her make the right choice, so there is an opportunity to help people get around the store to make a sustainable shop.
"However, the right choice comes with a premium and you can’t eat principles, so when people come in to do their shopping many are on a limited or tight budget.
"They can’t afford to make a right choice even though they want to.
"We have to not just help people make the right choice, we have to make it cost neutral and, ideally, ensure that making the right choice also means getting value for money.
“This is an industry problem that involves going right through the supply chain because as long as there is a premium attached to making the right choice you will exclude the vast majority of consumers coming through the door.”
A Culture Of Sustainability
Noel is passionate about fostering a culture of sustainability within the Musgrave Group.
“When you are in a role such as mine, me saying what I’m saying to you doesn’t achieve anything unless I can bring the entire organisation with me and get them to understand the big goal and what their role in achieving that is,” he says.
“I use the analogy of two people side by side breaking rocks in a quarry – when asked what he is doing, one of the guys says he is breaking rocks, and the other guy says he’s building a cathedral.
"At Musgrave, we want to build cathedrals. People are much more driven when they understand the larger goal rather than just the task, and Covid was a great example of that – people realised their purpose wasn’t packing trucks and stocking shelves, it was about keeping the supply chain clean and open.
“We want to become the most trusted and sustainable business in Ireland.
"Collectively, we have 1,000 locations across the country in terms of our stores, we are a significant part of the Irish economy, and we have an opportunity to make a difference.
"However, we have to help our people understand our objectives. To that end, we have set up an employee resource group and we have invested in bringing in a partner in this area – an award-winning social enterprise called Change by Degrees, whose co-founder Dr Tara Shine is an expert in this area.
"She is helping us to develop a curriculum for sustainability. This is an online learning platform where all employees are being given the necessary materials to understand why sustainability is important to us and what their role is in achieving the overall corporate goal.
“At Musgrave, we believe that a company-wide initiative like this is vital because, ultimately, if we don’t change our behaviour in terms of how we live, then all the strategies and goals in the world will be useless.”
Musgrave Group Targets
- To cut its carbon emissions - including those from its energy usage - by 46% by 2030
- To achieve a 50% reduction in food waste by 2030
- To become net zero by 2040
- To have more than 26,500 solar panels installed across 100 stores in the group by the end of 2023
- To install LED lighting in all its stores by 2025, with doors fitted in 75% of its outlets’ fridges
- To have all own-brand packaging made from recyclable, reusable or compostable material by 2025