CLIMATE CHANGE: Drinks firms think green

The trade is ever more attuned to environmental issues and hence the drinks business, in conjunction with JF Hillebrand, launched Confronting Climate Change. Ben Grant hears from three key speakers and listens to the vigorous debates

In the last few years, the wine industry’s favourite colour has undoubtedly been pink. At the 2008 London International Wine Fair it was clear that the rosé revolution continues uninterrupted, but there is a new colour which has captured the imagination and attention of the trade: green. Environmental impact has catapulted to the very top of the news and political agendas in the last 12 months. Legislators, industry and consumers have realised the urgency of the issue and have begun to think about how we can tread more delicately on our fragile planet, and the wine trade is no exception. From producers and distributors through to retailers and logistics providers, ever more companies are working to reduce their impact, and there was an unmissable buzz surrounding the subject as the industry gathered in London in May.

With the exception of the few remaining Hummer-drivers whose heads remain firmly in the sand, there is near-universal acceptance that we need to change the way we live our lives and conduct our business. But while the response to the green issue is characterised by honourable intentions and soundbite solutions, when you scratch beneath the surface it is incredibly technical. Navigating the maze of complex scientific solutions is a pretty tall order for the uninitiated. In order to bring a little more clarity to the subject and help individuals and companies understand how best to turn their concern into effective action, the drinks business hosted the Confronting Climate Change seminar, in conjunction with JF Hillebrand.

Top priority
The popularity of the event made it abundantly clear how important a priority the issue has become. It took place on Tuesday morning at Excel – just hours after the show opened its doors. This is traditionally one of the busiest times on the trade floor, yet the event attracted an unexpectedly large crowd and it was standing room only 10 minutes before the speakers had even begun (pretty remarkable popularity – and punctuality – for a drinks trade event).

Traditionally, such events tend to be dominated by a series of presentations. However, given the nature of the subject matter, it was decided that an interactive Q&A session would provide a better platform to stoke up the kind of debate that is required for the industry to work collectively and collaboratively in order to make genuine progress. But before the debate kicked off there was time for three companies who have made significant headway in reducing their carbon footprint to share their experiences with the audience.

First up was David Mawer, managing director of logistics specialist JF Hillebrand. The transport sector is the third biggest contributor to greenhouse gas emissions in the UK, so Hillebrand has been investing heavily in reducing its impact. Such work, he explained, is essential in order to protect the future of the industry. “The government has set ambitious objectives, and it expects business to play its part in meeting these commitments,” he said, before going on to warn that while the government is starting out by offering carrots to proactive organisations, it would soon start wielding a stick towards the inactive.

“The challenge is for us to work collectively,” he continued, “many companies in the wine industry are confused by the lack of clear guidelines, there’s activity but it’s very patchy and uncoordinated.” It’s very easy to make claims about environmentally friendly business activity, but far harder to actually prove authoritatively that they are genuine. As such, Mawer argued, the industry needs a clear methodology to validate these claims, and Hillebrand has done exactly that. Working in conjunction with the WSTA, it has created the Carbon Calculator, a tool that accurately measures the precise impact of importing wine into the UK.

The next speaker to address the crowded room was Dan Jago, Tesco head of BWS, who explained that the issue is now a top priority for the UK’s number one retailer. “It’s absolutely clear what we should do, and at Tesco we are clear that we must be a leader.

“We must make it easier for all our customers to make green choices,” he explained, “not just the enlightened or the affluent.”

He went on to outline the various work that the company is doing to reduce its emissions, from rewarding green choices through the loyalty card scheme and working with the Sustainable Consumption Institute at Manchester University to ship more goods by canal and invest in developing new renewable energy systems.

Tesco is committed to reducing packaging by 20% by 2010, he said, “this will be a key objective for our buyers, it’ll be critical to the NPD we’re doing”. The nation’s top retailer has set some ambitious targets and Jago made it very clear that the company expects its supplier partners to play their part. “In this industry I see many examples of companies making a great commitment [to reducing their environmental impact] but I also see a lot of resistance to change.” Any doubt as to the pre-eminence of the issue was ruled out as Jago concluded, saying that greener business practice “must be a priority for any company doing business with Tesco”.

Having heard from the retailer and logistics specialist, the final presentation was delivered by a supplier that has successfully turned itself around with environmental sustainability at the very core of its business model: Adnams. Speaking passionately about the project, managing director Dr Andy Wood explained how in 2000 the increasing impact of high spring tides together with a declining core market combined to inspire a period of reflection within the organisation. The result was a meaner, leaner, greener organisation, and Wood proudly explained how the company was able to launch East Green earlier this year, the first carbon neutral beer.

These pages have insufficient space to outline all of the remarkable work that Adnams has done to improve its efficiency. However, any supplier who is confused about what steps to take in order to reduce its carbon footprint should check out adnams.co.uk for inspiration. Perhaps the most striking aspect of the project is that while the work required significant capital investment, this has rapidly been recouped by massive energy savings – not to mention the increasing popularity of the product itself among consumers who are committed to making green choices. “It’s a sustainable beer, and it’s also a commercial beer,” Wood explained. It should be pointed out that both Tesco and Adnams have worked extensively with The Carbon Trust, a government funded organisation that advises business on commercially viable, environmentally sustainable business practices. Any other company that would like to take advantage of the organisation’s expertise should log on to carbontrust.co.uk.

Question time
Having heard three inspiring examples of best practice, the debate was then opened up to questions from the floor with the remaining four panelists also taking part. The first questions revolved around packaging, looking at the use of materials as well as the possibility of additional labelling. The consensus was that information about carbon footprints should not be included on the label because, as WSTA chief exec Jeremy Beadles pointed out, “there’s too much information required already, and this results in label-blindness. We need to think about better ways to communicate with consumers”.

David Cox, MD for Europe for Brown-Forman Wines, then posed an interesting question about separating the fact from the fiction in what is a highly complex technical subject. Wood responded: “It’s about openness. Businesses must be held to account, they should be made to report [about their environmental impact] just like they do with their financials.” He argued that the danger is that a few companies making misleading statements about their impact could drastically undermine consumer confidence. Dr Nick Kirk, British Glass research manager, continued by stating that “a common methodology is crucial. Everyone must be implementing the same system”.

Responding to a further question about glass weight from Barlow Doherty’s Abigail Pitcher, Waitrose wine buying manager Justin Howard-Sneyd MW, commented, “We’re not going to stop selling wine in heavy bottles … but we are looking at more lightweight premium lines.”

While Kirk then explained that research has indicated that consumers don’t even notice a 10% reduction in weight, so
significant savings can be made without compromising quality perception.

There followed a question about whether the supermarkets should be cooperating in order to make it easier for consumers to understand. However, the bruising encounter between Tesco’s Jago, Waitrose’s Howard-Sneyd and Sainsbury’s Melissa Draycott that followed indicates that the multiples are still a long way from working together harmoniously on the issue.

Next up came a question about how suppliers should prepare for impending legislation. “Looking to the future, the Climate Change Bill is going down the right track,” explained Beadles, “and it will certainly pose some interesting challenges. Also the government will be looking to industry to make a difference as it ups the targets for recycling.”

Howard-Sneyd then continued: “Businesses need to ensure that non-financial issues are given more importance,” so that business can take a lead on the subject, rather than being forced to react to legislation. Mawer added a hint of optimism by pointing out that all the solutions that Hillebrand has implemented have been cost-effective.

The panel were then quizzed about consumer willingness to participate in more environmentally conscious consumption – and there was near unanimous agreement that not only is the consumer willing to participate, but that they actively want businesses to help them make greener choices. Wood emphatically pointed out: “Don’t underestimate the desire of consumers to make ethical choices. It’s our job to provide them with a choice, and to explain it to them. If we provide a range of products and clearly communicate with our consumers, I’m confident that if we’re doing the right thing then they’ll make the right choice.”

Unsurprisingly, the Confronting Climate change seminar asked more questions than it answered. This is an incredibly complex issue and it was hardly likely that a few hundred delegates would come up with the authoritative solution to the greatest challenge of our times during a 90-minute seminar.

But what the event did create was a forum for the industry to gather together and consider how to progress, because one thing is sure: the question of environmental sustainability goes beyond individual brands, companies or even countries. This is a global problem, and it will only be tackled through cooperation and shared best practice.

db © July 2008