ROUND TABLE: Green Day

Packaging, transport, consumer awareness and environmental currency were among the issues discussed by a distinguished panel of drinks trade professionals at the recent Mentzendorff/the drinks business round table. Charlotte Hey reports

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To coincide with our Green Issue the drinks business, along with Mentzendorff, brought together a diverse group of industry experts to discuss the issues facing the drinks sector when it comes to environmental responsibilities at a commercial level. The subject inspired very lively debate among the assembled panel, with issues ranging from packaging to transport, and from consumer consumption patterns to the commercial implications for individual businesses.
The discussion initially centred around the dilemma as to whether the drinks trade as a whole was doing enough for the environment, to which Michael Lainas, managing director, Cert Octavian, emphatically responded, “I’d say no. Each company feels that it is doing enough but as a whole I don’t believe we are. These days I would think that most companies have green initiatives as part of overall company policy, probably because they feel they have to but why are they really doing it when the truth is that commercial success and service are what drives business in the drinks trade.

“We run the risk that if the trade does not start to work together soon in a meaningful way the enthusiasm will dwindle.”

Early days
Andrew Hawes, managing director, Mentzendorff, responded, “Perhaps, but there is a sense for the first time that environmental issues have gone from being somewhere low down to being top of the agenda. The problem is that green concerns and the environment have yet to get to the next stage, it really is very early days.” To which Melissa Draycott, category range planner, Sainsbury’s, agreed, saying that she felt it certainly was early days especially “when you think about issues like glass – it’s not that long ago since we were talking about how to differentiate wines that should command a premium price point. Heavy glass bottles were considered the only option and still are in many cases. It’s really only incredibly recently that suppliers have started to consider lighter glass and to work with organisations in order to offer more environmentally friendly packs.”
There was general agreement among the panel that there was much conflict between what the trade were doing and what the consumer actually understood. Simon Gotelee, brand manager, fortified wine, Mentzendorff, interjected: “Wearing the consumer hat too often we are faced with conflicting demands, some of which are consumer driven but there are some inconvenient truths out there that mean that people are not quite clear on what being ‘green’ really is.
“Some proper yardsticks need to be established for the trade as a whole before we can really start to work together. Going back to the premium packaging message, not too long ago there was a piece in the Financial Times stating that luxury brands had no green credentials.”
“But that is one of the contradictions of luxury packaging as a whole,” interjected Hawes, “Talk to consumers and they want the plush and the heavy when it comes to spending more on a product, but that is in direct conflict with the environmental truth about the kind of luxury pack that is expensive to make and often impossible to recycle. It’s going to take people a long time to get their heads around the whole thing.”

“I’m not so sure – it wasn’t long ago that the consumer was very reluctant to convert from cork to screw cap,” said Jane Masters MW, consultant. “It was the same kind of discussion that we are having now, and look at the acceptance level we have in the UK now for screwcap. Perhaps it is the case that the environment is not the first thing the consumer thinks about, but if given a choice people are certainly starting to take a more environmentally friendly option if they can and are prepared to spend that bit extra.”

Building consumer awareness
But as Susan McCraith MW, managing director of ethicalwine.com stated, “What it comes down to is building consumer awareness. Companies and businesses have to be responsible for informing and educating the consumer and the drinks industry has to get people to the base point first.” She added, “As with everything in business the sums have to add up first and there has to be a benefit to the bottom line. If we took a look at the supply chain initially I am sure that there are ways that not only can you add value but also save money by trying to be more environmentally friendly on a day-to-day basis.”
“Surely it’s about really obvious things to start off with, otherwise it’s just too complex,” said Masters, “I mean how do you define from which point you track your product’s environmental status. If it’s confusing for us then what is it going to be like for the consumer? The easiest way perhaps is to look at CO2 and energy expenditure in the process of making wine, the packing of it and its transport and distribution. A lot depends on where you are in the globe – there are so many variables. Look at glass light weighting for example. If it’s done in the UK then fossil fuels are most likely to be used; that’s a big “no-no”. In France, however, it’ll probably be nuclear power used; no CO2 emissions but…”

“Jane is right,” interrupted Fiona Wheatley, natural resources manager and member of the Sainsbury’s environmental team, “there are so many variables. Certain clones and varietals react differently and then you have to take the different seasons into considerations. It’s a challenge for the industry as a whole.
“From the outset sustainability is the key, climate change, natural resource depletion, poverty and human effect. If we work with these premises in mind then we will be going a long way further than the first base. It’s all about addressing one aspect without affecting another. We can’t deal with the big impact issues if we haven’t first looked at the basic impacts of our industry on the environment. Certification and third party endorsement help to ensure that you’re not using pulp fibre from illegally logged forest for example.
“If companies started to measure and create incentives in our businesses to drive change in the right direction then we would be moving in a very positive direction and it also gives us time to start to get the other bigger issues front of mind. It’s basic stuff really – it’s all right saying that your product can be recycled but what about using more of the recycled stuff that’s out there in the first place?”
At which point Lainas interjected with the thought that embedding an environmental awareness in the industry’s commercial culture from the outset was perhaps the starting point. “It’s about setting targets and trying to fulfil them, but at a local level at first to get the whole thing in motion,” he stated, and while there was agreement around the table there were still murmurings that the commercial reality was that there were a number of contradictions still in play.

“As a supplier you have the job of educating the producer,” stated Wheatley. To which Masters agreed: “Education is the key but we have to be careful that it isn’t abused by producers or brand owners as a means of adding value and as a result the consumer becomes cynical.”
“This is where transparency comes into play,” continued Wheatley, “producers, suppliers and retailers alike have to admit that they are not going to have all of the answers. ‘Greenwash’ is an issue, especially when it’s something so important as our environment.”
“The truth is that some of the environmental stuff that companies are doing is not very glamorous. Sainsbury’s commitment to reduce water consumption for example. Very worthy, but not PR-able really,” said Gotelee.
“Maybe not,” added Draycott, “but we have a responsibility to educate our very large consumer base about what we are doing and this is much more than one-liners, or headline grabbing initiatives – it’s a very big opportunity.”

Carbon calculator
David Mawer, managing director, JF Hillebrand, added, “It’s very dangerous to play with the currency of environmental issues. Surely the whole point is that you have to be seen to be rising above that from the start. The transport industry has had the media asking ‘What about the environment?’ for years now and to be fair an awful lot of this is down to how goods are transported as there is a direct relation between CO2 emissions and faster transit times. After all, the quicker you want a product somewhere the higher the carbon impact.

“What we have started to see more recently is that the consumer wants to understand that impact. We need to develop some kind of carbon calculator but when you scratch beneath the surface it’s a minefield to try and establish some kind of reliable information.”
But as McCraith MW said, “Really what we have to do is put it all into context and ask consumers simple questions that they can relate to, like “Which is more costly to the environment? Getting into your car and driving to the supermarket or shipping a bottle of wine from the Southern hemisphere?”
“All of which goes back to the small things you can do as a business,” said Wheatley, “and how effective you can be at delivering change within your company. There have been discussions about carbon labelling on packs but there is reluctance by the government because it raises such huge questions at a micro level. How can the consumer compare the carbon impact of a beefburger against that of a bottle of shampoo?”
In reality the panel agreed that the trade as a whole was nowhere near ready to consider the carbon labelling on packs. As Lainas reiterated: “It’s the fundamental issues that we are not sitting down and talking about, such as the inefficiencies of how we service our clients, the cost of storage and turnover of stock, lack of consolidated deliveries or just-in-time deliveries for HORECA – what are the costs of inefficiencies at that level? And how can we improve our environmental impact there? We cannot hope to resolve any of these issues if we cannot sit down together and talk.”
The consensus seemed to be that the whole issue represents an absolute minefield, but that everyone involved in the industry –  either supply, retail or on-trade  – has a responsibility to start considering what they can do commercially to improve, environmentally speaking. 

 © db January 2008