3 MIN READ
The perception of sustainability has changed from compliance and regulations, being seen to ‘do the right thing’, into an economic necessity.
FMCG is not traditionally known for their forward thinking when it comes to all things green. They are having to reassess their decision-making, not least since candidates are increasingly basing their decisions on a different set of circumstances than in the past.
One of which is, ‘just how much responsibility does this company take for their impact on the environment?’ Moral goals align with the need to attract the right customer and the right talent. It is no longer an option to ignore the protection of the environment – today and tomorrow.
FMCG, with its issues of shelf-life and expiration, transportation from diverse original locations, historical reliance on single-use plastic and glass packaging, use of diminishing natural resources to make products is not an industry with obvious symbiotic links to sustainability.
However, there are moves in the right direction. Where companies are conscious and respectful of crops, the communities who grow them and the methods by which they reach the end consumer, there are FMCG giants who have committed to improving behaviour.
Innocent Drinks have established ‘Protectors’ and ‘Agitators’ as part of their sustainability mission. The Co-op’s commitment to have 100% of the plastic packaging they use to be fully recyclable by 2025.
C&C Group ensure their key raw materials are now sourced locally, with the company aiming to be 100% carbon neutral by 2025, a full 25 years ahead of the UK’s carbon neutral target, with no more single-use plastics and a sustainability code to which all employees must adhere.
One key aspect of any environmental aim is to use employee engagement to work on how to reduce waste, reduce water use, as part of a cultural change.
“Those companies who involve their employees, are far more successful than those who simply impose new working practices.”
FMCG and the drinks industry in general are huge users of water, that most precious of resources. The onus is on the industry to find creative ways to re-use, find ways to harness hydro power and focus on a renewable aspect. Coca-Cola and Bruichladdich, are both successful household names and both clients of Denholm Associates, who have made sustainability central to their forward planning.
Coca-Cola are among the 250 signatories of the Ellen MacArthur Foundation and New Plastics Economy – accountability and transparency are part of the tender process – not just a morally commendable response, but an expected business imperative.
Among the Scottish/UK FMCG companies committed to change are those companies signed up to the Flexible Packaging Initiative – Unilever, Nestle, Pepsico, Mars, Mondelez International, all of whom have committed to changing traditional reliance on glass or single use plastic, moving to less harmful containers.
Another example of a large, recognisable and therefore powerful name in the market who is paying more than lip service to the commitment to sustainability, is Danone, who have been certified as ‘B Corp’ in Australasia.
This is certification which demonstrates that a company has had a positive impact through policies and practices, showing accountability and a focus on stakeholders. Their European parent company is determined to have all entities designated as ‘B Corp’ by 2025.
Plastic Packaging Tax
We cannot ignore the current costs of ingredients, raw materials and energy. As of 1/4/2022, any business producing more than 10 tonnes of plastic packaging per year will incur an environmental tax to incentivise businesses to use more recyclable plastic packaging. Anything less than a 30% recyclable product will result in a costly tax implication. There could be price rises as a result, but consumers increasingly want FMCG manufacturers to embrace more environmentally-friendly packaging.
One way of achieving this is to increase the use of monomaterials, usually much easier to recycle than packaging made from multiple materials. Many consumers with the kind of disposable income available to spend on FMCG goods, the ‘green £’, if you will, are increasingly aware of their own carbon footprint and decide to make eco-friendly purchases.
When it comes to recruiting future fit talent, it is clear that sustainability matters when choosing an employer. Three quarters of existing and potential employees would like their company to place a greater emphasis on environmental and social issues.
Stakeholder, supplier, partner, consumer expectations must be taken into consideration and are now vital to secure a competitive advantage, particularly when looking to attract customers and the kind of talent to ensure future success. There is, quite simply put, no way for a forward-looking firm to avoid facing up to the issue of sustainability.
Talk to Denholm
If you have a permanent or interim requirement, need some help scoping a brief, or you are simply looking for some up to date market insight in an ever-changing FMCG landscape, we are ready to help.
Please contact Steph Buckley on 07432 467 032 or steph@denholmassociates.com today. Thank you.
Useful links
https://www.ukaiddirect.org/wp-content/uploads/2016/04/What-sustainability-means.pdf
https://www.insider.co.uk/news/scottish-sustainable-food-drink-businesses-26268250
https://www.coca-colacompany.com/sustainable-business
https://insidefmcg.com.au/2022/03/09/danone-becomes-australasias-largest-b-corp-certified-company/
https://ellenmacarthurfoundation.org/topics/plastics/who-we-work-with
