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Costco Agrees to Sell Sustainable Seafood: Victory, Paradox, or Both? Costco Agrees to Sell Sustainable Seafood: Victory, Paradox, or Both?

Costco Agrees to Sell Sustainable Seafood: Victory, Paradox, or Both?

by Nicola Twilley
February 26, 2011

Seafood is big business at Costco. The company is the largest retail-sector purchaser of seafood in North America, and sold an astonishing $500 million's worth globally in 2006, the last year for which figures were available.

That's why today's announcement from Greenpeace that Costco has acceded to most of its campaign demands and pledged to adopt more sustainable seafood policy, is a really big deal. Perhaps the most significant change Costco has agreed to make is to stop selling 12 species of fish listed on the International Union for Conservation of Nature's Red List of Threatened Species, including popular favorites such as Chilean sea bass and swordfish.

Greenpeace began its "Oh-No-Costco" campaign nearly a year ago, after giving the wholesale club a "Fail" grade in its 2010 Carting Away The Oceans report on the seafood retail industry. Today, the environmental pressure group called Costco's new policy a "victory," although they noted that the company will need monitoring to make sure it follows through on its promises, and "still has a long way to go."

Costco's announcement comes hot on the heals of Walmart's shift towards stocking more organic and regionally-sourced foods, and both form part of a growing trend toward sustainability on the part of major corporations. It's an interesting relationship: After all, some would argue that the overconsumption that companies like Costco and Walmart encourage is the antithesis of sustainability. Indeed, back in 2007, Harvard professor Michael Norton published a study on what he called the "Costco Effect," arguing that the membership fees and bulk packaging of these big box stores encourages impulse buys and increased levels of food waste. Meanwhile, there are plenty of proponents of artisanal and local "Slow Food" who would argue that the sheer scale of globalized retail can never be truly sustainable, given the distance it puts between grower and consumer.

On the other hand, Costco's huge volume business also means that it has an equally huge impact on the seafood industry—and thus on the environment. Among salmon suppliers and MBAs alike, Costo is legendary for its transformation of farmed salmon in the late 1990s. A recent article in the industry's Seafood Business magazine included quotes from several vendors that made the extent of Costco's leverage clear:

Club stores brought farmed-salmon consumption to "a whole new level," says 
Jason Paine, VP-sales for Multiexport Foods, a Miami-based Chilean-salmon importer, [...] by sheer volume and by demanding that portions of fresh, farmed salmon be skinless, with any brown-colored flesh and pinbones removed.

"At one time, Costco was the single-largest buyer of farmed-salmon fillets in the country, by far," says Tom DeMott, managing partner of Encore Associates, a retail-industry consulting firm. "When you have that situation, a major buyer with a certain spec, now the vendor can more easily supply that product to the industry as whole."

Corporations of this size clearly have a huge impact on global environmental and public health—and, as examples such as Walmart's support for compact fluorescent lightbulbs, PepsiCo's salt and sugar reduction pledges, and now Costco's sustainable seafood policy show, this impact can be positive as well as negative. And in today's political environment, the reality is that global capitalism is not going to disappear—which means that gigantic corporations such as Walmart and Costco are going to have to be part of the solution to the resource challenges we're facing, despite the undeniable problems associated with their business model.

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