Oda is a Norwegian-Swedish online-only food retailer. Since its founding in 2013 the company has gone through ups and downs, with great expansion in the Covid years, to a tougher financial situation a merger with a Swedish sister company, and layoffs now in 2024. This case tells the story of Oda’s first sustainability director and her situation in 2019/2020.
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Louise Fuchs was hired in 2018 as the first Sustainability director and started her job by doing a situation analysis of the company’s social and environmental impact. Regarding CO2 emissions, the main direct impact of Oda was in the last mile delivery to customers, including the direct fuel used by the vans and the plastic bags used to package and deliver the customers’ orders. These activities accounted for around 78% of direct CO2 emissions in 2020.
Oda eventually concluded that cardboard boxes would be the best option, combining environmental sustainability with efficiency and hygiene. The cardboard boxes could easily be folded together and put in household paper recycling bins. Each cardboard box would replace up to three plastic bags, and life cycle analysis showed that the boxes had a lower CO2 impact.
Replacing the fossil fuelled trucks was more complicated. The main challenge was the battery capacity and realistic driving range. Oda needed vans with cooling to keep the products fresh. Combined with long delivery routes and sometimes very cold outside temperatures, which reduce the battery capacity, electric vans would make operations much less efficient. The technology was improving constantly, and in the end, Oda’s management made a bet and promised publicly that all vans would be electric from 2025.
Mapping the impact of their supply chain
Oda had analysed their emissions following the GHG protocol[1]. Scope 1 emissions (direct emissions from the company, in Oda’s case mainly fuel for vehicles) accounted for 4% in 2020, and scope 2 emissions (emissions from purchased energy, mainly electricity and heating for warehouse and offices), 3%. The rest were scope 3 emissions (emissions in the supply chain, from transportation, travel, waste, boxes and bags)[2]. However, this analysis did not include a complete analysis of the products purchased and sold by Oda. Within food retail, this is the lion’s share of the impact, and Oda expected that at least 95% of their emissions come from products sold.[3]
Oda collaborated with a climate research institute and used existing, category-average data to calculate the CO2 emissions of the products they sold. The general picture for Oda’s products was very similar to the general findings about the CO2 impact of food (see Exhibit 1). Meat products, in particular beef and lamb, and dairy products had high emissions. Vegetables had much smaller impacts[4].
The largest impact came from the actual production of the food, including land use change (e.g., forests cut down to make space for agricultural production), farm production (e.g., methane emissions from the animals, use of fuel for energy and vehicles) and animal feed. Processing, transportation, retail handling and packaging had a smaller impact.
The challenge of reducing emissions from the products sold
Oda had ambitious sustainability goals, by 2025, Oda was aiming to reduce their own emissions intensity by 50%. They also aimed to reduce the emissions intensity of the products sold by 50% in the same period. By using emissions intensity (tonnes of CO2 or equivalent, divided by the operating income) instead of absolute emissions, Oda accounted for the strong growth that was planned.
Louise Fuchs realised that it would be a big challenge to reduce the emissions intensity of the products sold. She had to find effective solutions that would not reduce customers’ spending, nor their satisfaction with the store.
Discussion questions
- How can Oda reduce their scope 1, 2 and 3 emissions?
- How do you think Oda will be affected by climate change?
© 2024 by Jakob Utgård. This is a short and adapted version of the case “Sustainable Online Food Retailing at Oda.com” by Jakob Utgård and Nicholas Ind.
[1] https://ghgprotocol.org/sites/default/files/standards_supporting/FAQ.pdf
[2] Oda sustainability report 2020. https://static1.squarespace.com/static/5ebd0c207e6df55262af4c0a/t/61275520e33e582ee8e6ff84/1629967659167/Oda_SustainabilityReport_2020_210x297mm.pdf
[3] https://brc.org.uk/climate-roadmap/section-2-retail-industry-emissions-profile/21-emissions-scopes-boundary-setting/
[4] https://ourworldindata.org/environmental-impacts-of-food