Diversity and inclusion in the natural products industryDiversity and inclusion in the natural products industry
February 4, 2021
The rallying cry heard throughout the summer of 2020 forced the Unites States to face its racial inequity of the past and present. As the Black Lives Matter protests quelled, the country looked for a way forward, committed to finding ways to repair the damage that Americans had been content to ignore.
The civil unrest against systemic racism in the U.S. was a wake-up call not only for individuals but corporations as well, prompting a reexamining of how these truths exhibit themselves within workplaces.
What transpired was a flurry of companies taking public stances against racism and making commitments to work toward racial equity, with varying degrees of promises, initiatives and accountability efforts.
As an industry that is used to being ahead of the curve, natural products industry efforts to take a closer look at the underrepresentation of people of color and women in the workplace were already underway when this racial reckoning came to the fore. In 2019, New Hope Network partnered with the J.E.D.I Collaborative—an OSC² natural products industry collaborative whose name stands for Justice, Equity, Diversity and Inclusion—to conduct a benchmarking survey to assess the level of diversity and inclusion within the natural products industry.
The objective was to obtain a view into the demographic makeup of the industry today so we know where it stands, can set benchmark goals and measure progress as an industry.
How'd we measure up? Not exactly a passing grade.
What we found was that, as an industry, we have a lot of work to do.
So let's get started.
What is justice, diversity, equity and inclusion?
When discussing diversity and inclusion in the natural products industry, many use the acronym DEI, which stands for diversity, equity and inclusion. First, let's define these terms.
Diversity is all the differences between us based on which we experience advantages or encounter barriers to opportunities. Diversity isn’t just about racial differences.
Equity is allocating resources to ensure everyone has access to the same opportunities. Equity recognizes that advantages and barriers—the "isms"—exist. Equity work addresses racism, sexism, heterosexism and more.
Inclusion is fostering a sense of belonging by centering, valuing and amplifying the voices, perspectives and styles of those who experience more barriers based on their identities.
Another term some groups—such as the J.E.D.I Collaborative—use is justice, which means dismantling barriers to resources and opportunities in society so that all individuals and communities can live a full and dignified life.
The last term to know is BIPOC, which stands for black, indigenous and people of color.
Another good way to think about diversity and inclusion is with a phrase coined by diversity advocate Verna Myers: "Diversity is being invited to the party. Inclusion is being asked to dance."
Justice, equity, diversity and inclusion metrics
In the first Natural and Organic Industry Benchmarking Survey conducted in December 2019 by J.E.D.I Collaborative and New Hope Network, industry members were asked to share the makeup of their company leadership, board of directors, CEOs and founders.
Approximately 220 industry leaders completed the survey, providing a view into approximately 1,000 leaders, 725 board members, 220 CEOs and 210 founders.
What was discovered was that industry leadership teams and boards lack diversity and are predominately made up of white men.
One jarring takeaway from the survey is that black and Latinx membership on industry boards is only 2%, while black and Latinx representation on leadership teams is 2% and 6%, respectively.
The findings showed that smaller companies are more diverse than larger ones. Companies with fewer than 10 employees have more women and people of color in leadership positions.
We can do better.
More diversity and inclusion takeaways
Why inclusion matters
As long-time conveners of the natural and organic industry, we at New Hope Network believe the industry has a responsibility to ensure that its better-for-you products reach everyone. Collectively, we must ensure that everyone—regardless of gender, race, ethnicity, orientation, disability or background—feels they have a place in the natural and organic products industry and can lead us toward becoming a more innovative force for good in the world.
Diversity isn't just a checkbox—it's an opportunity toward that goal.
The makeup of America is quickly changing, and as an industry, we are missing a growing opportunity.
The U.S. is becoming increasingly diverse and it is imperative that manufacturers and retailers serve the changing population. We could be smarter and more understanding to better serve our audience. Unconscious bias—the underlying attitudes and stereotypes that people unconsciously attribute to another person or group of people—may emerge by not being a diverse community.
Today's natural and organic consumers are predominantly white (73%), while the U.S. population is moving toward a white minority within the next 25 years. The percentage of non-Hispanic white people in the U.S. population has reached an all-time low and is expected to fall below 50% sometime around the year 2043.
Becoming a more diverse community will allow us to be able to serve the people who could benefit most from health-promoting food and products and contributes to the long-term costs that all of society pays when we support an unjust food and agricultural system.
How diversity and inclusion drive business value
Natural products industry growth is slowing despite a projection that it will reach $250 billion in 2021, according to Nutrition Business Journal. Fostering diversity and inclusion as part of company ethos can help find new growth.
It goes beyond doing the right thing. A diversity of thought, driven by unique perspectives from diverse talent, has been proven to increase the bottom line. Companies with organizational diversity yield 21% higher financial performance and 27% higher likelihood of long-term value creation, per McKinsey and Company's 2018 "Delivering Through Diversity" report.
And companies that opt out of workplace diversity pay the penalty. McKinsey—which has been conducting research on diversity and financial performance since 2014—found that companies in the bottom quartile for both gender and ethnic/cultural diversity were 29% less likely to achieve above-average profitability than were all other companies in the data set.
Hiring employees from diverse backgrounds helps companies better innovate and compete as U.S. demographics and consumer habits change. Shoppers have become more aware of the brands behind the products they purchase and continue to care about brands that uphold their values. (Notably, values-based consumer behavior has held steady despite a pandemic, according to ongoing tracking by New Hope Network NEXT Data and Insights.)
For example, Bloomberg found that Gen Z consumers—which has a spending power of more than $140 billion—want corporations to take a stand on issues, with 42% saying they’d pay more for a product if they knew the company promoted racial justice initiatives.
Learn why diversity and inclusion matter
Next steps for diversity and inclusion efforts
The events of 2020 provided the pain point many organizations needed to shift from talk to action.
And while the J.E.D.I benchmarking survey focused on gender diversity and race representation in the natural products industry, the ultimate goal for companies should be to have diversity in perspective from employees of many walks of life.
Diversity in the workplace is broad and can include race, color, ethnicity, nationality, religion, socioeconomic status, veteran status, education, marital status, language, age, gender, gender expression, gender identity, sexual orientation, mental or physical ability, genetic information and learning styles.
In addition to measuring diversity metrics of employees, inclusion in the workplace matters just as much. Inclusion is involvement and empowerment, in which the inherent worth and dignity of all people are recognized.
When companies are ready to take action, nonprofit organizations such as Women on Boards Project and J.E.D.I Collaborative are there to help companies take steps to embed racial justice, equity, diversity and inclusion into the fabric of their organizations.
Another place to start: The Harvard Business Review offers a four-step diversity and inclusion strategy to help companies move toward greater and better representation for black leaders specifically (but says the framework can be adapted for other marginalized groups).
A good first step? Making a J.E.D.I commitment.
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