Product range field of action

Products from permaculture

Ecological products play a central role in Real’s sustainable product range composition. At the end of 2014, the company was one of the first German retailers to introduce fruit and vegetables from permaculture. Since then, Real has worked exclusively with the supplier Lehmann Natur GmbH, a wholesaler for organic fruit and vegetables based in Meerbusch near Krefeld. The sometimes more than 15 permaculture products are marked with the Real permaculture logo and grow on acreage in Spain.

Permaculture is a special form of ecological agriculture with some supplementary aspects. Fruit and vegetables are grown in harmony with nature and on the basis of sound cycles. Its purpose is to avoid the negative influences of modern, conventional agriculture. Other aspects reveal what makes this approach special: Permaculture

• does without any chemical or synthetic fertilisers, pesticides and fungicides, thus exceeding by far the requirements placed on the ecological agricultural production of food according to the EU eco-regulation,
• is free of treatment agents,
• promotes the build-up of the humus layer in soil, which is an important source of CO2 and improves soil fertility,
• contributes to the preservation of species diversity, nature and habitats due to mixed cropping methods and
• uses water sparingly, for example by storing and using rainwater.

In addition to their quality, communication is a crucial factor in convincing the customers of the products’ advantages. To this end, Real provides comprehensive information and background concerning permaculture on its company website as well as in brochures, booklets and newspaper inserts.

The Permaculture Advisory Board, established in 2016 and consisting of experts and representatives of NGOs, assists Real as an independent body in an advisory function, for instance in the approval of new suppliers and products as well as the training of employees and in external communication.

Since it was established, Real’s portfolio has grown steadily. In 2017, for instance, olive oil and peanuts from permaculture production were included in the product range for the first time. Depending on the season, Real offers more than 15 different permaculture products. The goal is to further advance awareness of permaculture and to expand the product range – depending on availability.

Launch of Demeter products at Real

Another important step in sustainable product range composition at Real was the launch of Demeter products in 2017. Initially, the portfolio contained about 100 different items, including various ground grain products and pasta, juices, sauces and bread spreads. By now, Real’s product range includes more than 150 Demeter products and is to be further expanded.

Demeter is Germany’s oldest organic food association. Its standards are significantly higher than the legal EU eco-criteria. For example, Demeter demands that an agricultural operation switch entirely to biodynamic agriculture^[1] in line with the Demeter principles and creating closed cycles.

1 The term ‘biodynamic agriculture’ can be traced back to the teachings of Rudolf Steiner, the founder of anthroposophy. It describes the agricultural holding as an individual entity, an organism that is largely closed in itself, where the different partial areas combine to form a live unit and which produces all essential elements of agricultural production (for example feed for the animals or fertiliser for the plants) itself in the required quantity.

Sustainable product range composition

As a provider of more than 80,000 products, Real is at the interface between producers and consumers, which gives it special responsibility. The company lives up to this responsibility in many different ways.

Real undertakes various efforts to make its product range as sustainable as possible. For example, the company issued purchasing guidelines for a number of products and raw materials which define mandatory standards for the products. These standards are reassessed every year and adjusted to current developments. Objectives are also reassessed and redefined.

Real has already accomplished the overall goal of generating 30% of its revenues from the sale of sustainable products in the food and near-food segment by 2019. To rigorously further pursue this path, the company has set itself a new goal: by 2030, Real wants to have a 100% sustainable product range in the food and near-food segment. Adjusted individual goals have been developed for the different product groups which contribute to achieving the overall goal.

Sustainable products include items for whose production special ecological or social aspects were considered, resulting in value added for human beings, animals or nature. The expansion of the organic product range plays an important part in this context. Organic products are marked as such and must meet specific minimum criteria which are defined in the EU eco-regulation. Real’s product range already contains more than 4,000 organic products. However, this category also includes other logos and seals or set criteria – in other words, products which offer significant value added for human beings, animals or nature. A pertinent example is the Irish Beef which the stores offer. The animals graze on Irish pastures where they can move about freely during 10 months of the year.

Product safety and quality

A basic requirement of product range composition is that products are impeccable and safe. Here Real often relies not merely on the legal requirements and controls but offers its customers additional safety be implementing and complying with international quality standards such as Qualität und Sicherheit (QS) and the International Featured Standards (IFS). Real defined further standards for specific product groups that exceed the legal regulations. Regarding fruit and vegetables, for instance, the company requires GlobalG.A.P. certification. Moreover, Real backs the demand to minimise the use of pesticides and advocates legislation that only allows the use of pesticides in fruit and vegetable production that are approved in Europe. No more than 70% – and from 2019 no more than 50% (20% in the case of glyphosate) – of the legal maximum residue amounts for pesticides may be utilised. Additionally, it has been determined that a maximum of 5 different active ingredients may be used and only 80% of the total threshold value may be utilised. Real carefully checks the quality of the products on a regular basis via supplier audits, lab inspections by accredited labs as well as warehouse controls.

Compliance with social standards

Global, complex supply chains have developed in the wake of globalisation. Coffee from Columbia, fruit and vegetables from Africa and New Zealand or textiles and electronic products from China and Bangladesh are only some examples where the products are sent around half the globe before they become available for customers at the shop. While here at home laws and often also unions and works councils protect employees against exploitation and working conditions that are inhuman or endanger their health, this is not a given in other regions of the world. Especially in emerging and developing countries, laws are frequently insufficient or inadequately enforced. Therefore more and more customers wonder about the social conditions under which the goods they purchase were produced. For this reason, sustainable product range composition must also take social aspects of the production along the supply chain into account. And so Real requires all its business partners to contractually pledge compliance with the labour standards of the International Labour Organization (ILO). The strict prohibition of child and forced labour as well as any kind of exploitation is as much part of the agreement as are other forms of labour that are exploitative, damage a person’s health or violate his or her dignity. This applies to the entire food and non-food product range, without qualification.

Real is a member of amfori BSCI (Business Social Compliance Initiative) via METRO AG. The goal is to implement safe working conditions along the supply chain. Real demands transparency regarding the production sites used, that carry out the final value-creating production step, as well as compliance with the social standards of amfori BSCI from all non-food own-brand suppliers (non-food own-brand products as well as own import products) which produce Real own brands in so-called risk countries (based on the evaluation of amfori BSCI). This must also be validated by an adequate audit result (i.e. A, B or C, for the Amfori BSCI or an audit that is acknowledged as equivalent). By the end of financial year 2017/18, 98% of factories had a valid and adequate audit.

Regional product range

To show customers which products are from the region, Real marks them with the ‘Gutes aus der Heimat’ (Prime local produce) logo. More than 20,000 items already bear this logo. Especially fruit and vegetables as well as sausage products are from nearby enterprises which are located within a radius of 100 kilometres of the respective store at most. The company strengthens the local economy with regional products. Shorter transport routes and more efficient logistics protect the environment.

Products with reduced fat, sugar and sodium content

A number of heavily processed foods have a high sodium, fat and/or sugar content. This may lead to consumers taking in amounts of these nutrients that far exceed the recommended daily allowance. For this reason, Real has been working for years on optimising food composition for the benefit of consumer health. In 2015, the company set itself the aim to reduce the sugar, fat and sodium content of about 150 own-brand products by 2017. Real has accomplished this goal: the composition of more than 150 items (including the own productions at the stores) has been optimised. The main focus was on products which are frequently consumed by children, such as ‘real QUALITY TOMATEN-KETCHUP für Kids’. Real was even able to reduce the sugar content of this product by 30%. The company plans to check all own-brand products and own productions by 2022 and – if this is possible without any sensory loss – to alter the formulations in terms of a lower sugar, fat and/or sodium content.

Sustainable fish purchasing

Overfishing is considered the main reason for the decline of many species within the marine ecosystems. Even though the stocks of some fish species have been able to recover during the past few years, a large part of the stocks is still considered overfished or endangered. Aside from the ecological aspects, such issues as adherence to social standards as well as human trafficking and forced labour are major challenges for global fishery.

Together with suppliers and stakeholders, Real has developed a number of measures in order to promote sustainable fisheries and in this way contribute to the protection of the marine ecosystems as well as the people employed in the fishery industry. For example, Real excludes fish species that are critically endangered according to IUCN if they are not available as sustainably certified goods. Additionally, Real carries Victoria perch from the Naturland Wildfish certification programme in Bukoba, Tanzania, which strengthens smaller fisheries. The standard contains ecological, social and economic criteria. Not only is the impact of fishing on the environment reduced in this way, but the working and living conditions of the fishers are improved, too.

Real has the concrete aim of having 100% of all fish products under its own brand certified with a sustainability standard by 2020 if they are available. These standards include, for instance, the seals from the Marine Stewardship Council (MSC), the Aquaculture Stewardship Council (ASC), GlobalG.A.P., Bio, Friend of the Sea, Best Aquaculture Practices (BAP), Naturland Wildfish and the Eel Stewardship Fund (Initiative zur Förderung des europäischen Aals e. V., ESF).

In order to furthermore improve the working conditions as well as promote adherence to social minimum standards in the fish supply chain, Real obliges its suppliers contractually to comply with the ILO key labour standards and prefers manufacturing companies and fisheries which are certified according to a social standard such as BSCI, SEDEX-SMETA or SA8000.

Cocoa from certified and sustainable farms

Cocoa is one of the most important trade goods in the world. Most cocoa growing areas (about two thirds) are in West and Central Africa on small farms. The working and living conditions of these small farmers are very hard. Often the farmers’ income is not enough to make a living and invest in pest management, good plant material or improved cultivation methods. This in turn exacerbates further evils such as child and forced labour. In addition to a number of social challenges, there are also ecological problems in connection with cocoa growing which must be overcome. To make a contribution towards solving the diverse challenges in the cocoa industry, Real has developed a purchasing guideline for cocoa in which the criteria for cocoa procurement are defined. For instance, since 2015 the company has demanded that only cocoa be used for all own-brand products which has been certified according to one of the 3 internationally recognised standards of Fairtrade, UTZ Certified and Rainforest Alliance and which was procured in compliance with the Mass Balance supply chain option. Now that this goal has been achieved, the company plans to gradually switch to the ‘Segregation’ (SG) and ‘Identity Preserved’ (IP) supply chain models, as long as the market situation permits.

Sustainable palm (kernel) oil

Palm and palm kernel oil can be found in many convenience goods such as food, cosmetic products and detergents. Due to its specific properties, it is used in the field of consumer goods in many different ways. Demand for it is therefore high – and steadily increasing. To meet the growing demand and gain new acreage, large parts of rain forests continue to be cleared. This contributes to the destruction of the habitats of people as well as numerous animal and plant species, and has far-reaching consequences for the environment and the global climate.

In terms of production, palm and palm kernel oil, however, cannot be easily and meaningfully replaced by other oils. This would only shift the problems or even exacerbate them, as other oil plants yield less oil than the oil palm and would therefore require more acreage.

In view of these facts, Real, in conjunction with its suppliers and other stakeholders, advocates sustainable oil palm cultivation. The company has been a member of the Roundtable on Sustainable Palm Oil (RSPO) since 2011 via METRO AG. The association of relevant stakeholders of the palm (kernel) oil supply chain supports the sustainable cultivation and use of the oil palm. Since 2015, Real has only used sustainably produced and certified palm or palm kernel oil according to the supply chain models Identity Preserved (IP), Segregation (SG) or Mass Balance (MB) or alternative raw materials for all own-brand food items. The company has now committed itself to a new target: by 2025, it wants to use 100% certified palm oil or palm kernel oil based on RSPO’s ‘Identity Preserved’ (IP) or ‘Segregation’ (SG) supply chain models for its own-brand food items, as long as the market situation permits. In addition, the range of own-brand detergents and cleaning agents as well as cosmetics products is to be switched to sustainable palm oil based on one of the above-mentioned supply chain models, if the market situation permits. Currently, the palm or palm kernel oil is certified according to the IP or SG supply chain model for more than 50% of all own-brand products.

Commitment to the protection of animals

Real’s corporate principles require that products of animal origin are marketed that were made with animals reared in species-appropriate ways. Since current legislation does not always sufficiently guarantee this in farm animal husbandry, the company, in conjunction with various stakeholders and suppliers, is continuously working on measures to further advance animal welfare. Real has summarised the pertinent goals and measures in a purchasing guideline for animal products which was published in 2016 for the first time and has been further developed since then.

Real is engaged in broad-ranging projects which advance animal welfare in general, as well as in specific measures concerning individual animal species or individual product groups. To make its portfolio of animal products as sustainable as possible, the company steadily expands its range with products whose standards exceed the legal requirements. In the poultry segment, for instance, Real carries conventional products bearing such quality seals as ‘Für mehr Tierschutz’ (For greater animal protection, basic level) or ‘Label Rouge’ as well as ‘Nature & Respect’.

New additions in 2017 were products of the ‘Kikok’ label in selected stores. It has also tougher requirements, such as lower stocking density, the provision of toys and animal feeding requirements. In the pork segment, some Real stores carry sausage products of the ‘frohNATUR’ brand. Here the pigsties are divided into different areas (for example an outdoor or digging area) and are equipped with straw and toys for the pigs, among other materials. The stocking density is lower than in conventional pig husbandry. The feed is not genetically modified. As for beef, for the most part Real carries Irish Beef. Irish cattle spend almost all year long (at least 10 months) on pastures where they can move about freely. In addition to conventional goods, the company has meat and sausage products in organic and Demeter quality in its assortment. Real is also active with respect to such animal products as milk, dairy products and shell eggs. Under its own brands ‘real BIO’ and ‘real QUALITY’, the company does not sell shell eggs of laying hens whose beaks have been trimmed, as committed in the buying guideline for shell eggs and egg products. Additionally, Real carries eggs which have been distinguished with the ‘Für mehr Tierschutz’ premium level logo. Here, too, the beaks of laying hens are not trimmed. Moreover, the company has added 100% certified organic ‘haehnlein’ eggs to its product range Germany-wide. Here, the male chicks of the laying hen line are also reared and later used for meat production. This is currently not standard practice yet, as male chicks have such little meat that they are not as profitable for the meat chicken farms as the chickens that are specifically reared for meat production. Real sells the meat of the male animals in selected stores.

Furthermore, Real switched the fresh milk of the ‘real QUALITY’ brand first to pasture milk and then to mountain farmers’ milk, from which UHT milk and mountain farmers’ butter are also produced, as described in the buying guideline for animal products. Mountain farmers’ milk comes from small establishments in the Alps where the cows are in pasture several months a year and where they can move freely about eating fresh grass and fresh herbs.

Vegetarian and vegan product range

To promote animal welfare and meet its customers’ needs, Real is continuously expanding its range of vegetarian and vegan products. In financial year 2017/18, for instance, the company included various vegan meat alternatives, such as natural tofu and organic ground tofu, vegan schnitzels, nuggets and burgers, in its product range under the ‘real QUALITY’ own brand. Currently, the stores stock more than 2,000 vegetarian and vegan products which are identifiable for customers among other things thanks to shelf and product signs. On the ‘Besser Leben’ (Better living) consumer portal, Real offers its customers additional information on the ingredients of its own-brand products. Here, the consumers learn, for example, whether gelatin was used for clarification or if the rennet used is of animal or plant origin.

Sustainable wood and paper products

The world’s forest land is an important element in the regulation of greenhouse gas emissions. Advancing deforestation for the procurement of wood and paper products thus contributes to the greenhouse gas effect and hence to the global climate change. Forests, moreover, are the habitats for many animal species. To live up to its responsibility as a retail company in this area as well, Real engages in the sustainable treatment of the resource wood. In its purchasing guideline for wood and paper products, for instance, published in 2016, the company defined appropriate goals and requirements for the procurement of wood and paper products. Real has determined that all own-brand items, customer service items and products for internal use must be from sustainable sources by the end of 2020 if their wood or paper content accounts for at least 50% of their weight. Wood and paper products are considered sustainable if they come from sustainable forestry – in other words, if the material is not one of the types of wood requiring protection according to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) or fall under the guidelines of the International Union for Conservation of Nature (IUCN). Products are also considered sustainable if they were certified as sustainable or if they were made from recycled material and bear a pertinent certificate according to the standards of Blauer Engel, the Forest Stewardship Council® (FSC®), the Programme for the Endorsement of Forest Certification Schemes (PEFC), the EU Ecolabel, Nordic Swan Ecolabel or ÖKOPAplus. Wood and paper products from trees on the CITES and IUCN lists are prohibited unless they come with a certificate concerning sustainable forestry.

Furniture, such as garden chairs, beverage cartons for juices and similar and hygiene paper products (all under the own-brand range) are already certified according to PEFC, FSC® or Blauer Engel. We are constantly working on converting other product ranges to this effect.

Sustainable textiles

Most of the textiles sold in Germany are imported from abroad – often from developing and emerging countries. The textile supply chain is highly complex, and different stages of production sometimes take place in different countries. On the one hand, this industry branch offers many people jobs and can also help women to make their living on their own and independently. On the other hand, the production and working conditions in many countries fall short of the internationally defined environmental and social standards yet. One consequence of this is that child and forced labour still exist in many places and the safety at work is not ensured everywhere. In addition to the social aspects, there are a number of ecological challenges in the textile sector that must also be dealt with. These include, for instance, the high water consumption and the use of pesticides and chemicals.

Real has defined various measures to improve the living conditions of people and animals in the textile supply chain and help reduce the use of water, pesticides and chemicals. The company steadily expands its range of textiles with sustainability standards. By 2025, it only wants to use own-brand textiles with cotton content that meet a sustainability standard such as Global Organic Textile Standard (GOTS) or Cotton made in Africa (CmiA), or a seal for certified organic cotton.

Additionally, via METRO AG Real is a member of various initiatives which are actively involved in improving the living and working conditions in the textile supply chain. These include, for instance, amfori BSCI and the follow-up agreement of the Bangladesh Accord (see the section ‘Compliance with social standards’). Real furthermore strictly excludes critical products such as cotton from Uzbekistan and the so-called sandblasting method in the production of jeans as well as practices involving cruelty to animals, like the mulesing method used with Merino sheep or live-plucking of geese, ducks and Angora rabbits.