Denomination sustainability blog series
Number 2: It’s all about the bottom line
It may feel counterintuitive at first, but it pays to be sustainable, and will cost more in the long term if you ignore trends and refuse to change. According to a report by global consultancy partnership Kearney, leaders that embrace circular initiatives into their business models are ‘outperforming traditional rivals’. So, there it is – what’s good for the planet and good for the global population is also good for the bottom line.
It’s not just about doing the right thing to have a positive impact on your consumers. Now, more and more businesses in the drinks sector are learning that for many stakeholders, staff, VCs and investors sustainability is a priority, too. Adopting a genuine sustainability agenda is now essential for ‘futureproofing’ your business and the planet.
There’s also evidence that the highest-spending and most frequent-buying consumers in the drinks sector are happy to pay more for sustainable products. According to YouGov, many consumers worldwide are willing to fork out more to address their environmental concerns. Three in five shoppers in Germany agree they’re happy to bear the additional expense to buy products that are better for the environment. Other markets where more than half of grocery and drinks shoppers show a similar inclination include the US (58%), UK (57%) and Australia (53%).
Alongside this shift in our understanding of the benefits of adopting a more sustainable approach, there’s the added pressure of upcoming, and frequently changing, regulations and restrictions. Extended Producer Responsibility legislation, for example – under which producers are financially responsible (and liable) for the packaging they generate across its entire lifespan, stretching beyond the point of purchase to its ability to be reused or recycled – it presents huge long-term risks to businesses and their share value. We simply can’t afford to kick the can down the road anymore.
What’s the next step?
We’ve seen it in fashion (the second biggest polluter after the oil industry) and agriculture, including vineyards. Drinks and FMCG are next in line. Our futureproofing strategy breaks down circular thinking for our industry specifically, and guides businesses through the maze in easy steps so that you can stay ahead.
Futureproofing has never been more critical, whether you’re a premium Scotch producer looking nervously at your grain and water sources, or a winemaker looking to down-weight glass and reduce transportation costs.
It’s a huge job, and there’s a risk that you’ll throw good money after bad without a top-to-tail strategy that has been configured specifically for your company. That’s where our futureproofing system comes in.
Clarity on circularity
In the past, when creating a product for market, we typically didn’t give much thought to the system into which it fits – the circular economy. It was designed to do a job and then be thrown away, with little thought given to reuse or remanufacture.
That’s why we’ve been working hard in the background to create an infrastructure that will enable us to help companies in the drinks sector get clarity on circularity and build it into their business models. Keep an eye out for next week’s blog when we talk about the importance of circular thinking, and how we put the systems in place to achieve it.