October 26 2020

‘In the loop’ - Sustainability in the Wholesale Industry

Setting the Scene

Millennials are without a doubt the most environmentally-conscious, sustainability-driven generation ever. It can sometimes feel like every way you look, Industries and businesses, big and small, are doing what they can to contribute to positive change and remove practices which worsen an already global issue - Climate change.
With global warming reaching the headlines on a daily basis, it’s unsurprising that companies are placing the issue at the forefront of their efforts when rethinking their internal practices. Ethical business strategies are not only seeking to reverse environmental damage, but they are a way to reach more customers, helping align business standards with ever-growing consciousness surrounding such a globalised issue.
It’s fair to say that retailers, given their exposure to the public’s watchful eye at all times, have been leading the way in terms of an Industry-wide sustainable standpoint. The average retailer will invest 11.4% of their revenues into sustainable deliveries, and 9 out of 10 retailers will have resources to achieve greater sustainability in the delivery process. (1) On top of this, retailers are doing whatever they can to stand at the forefront of progressive change; from the encouragement of recycling to the marketing and promotion of plant-based, biodegradable packaging and the introduction of electrical vehicles.
The Foodservice Industry is showing big signs that it is following suit by listening to consumer demands, rethinking strategies and refining supply chain processes to improve efficiency and reduce wastage wherever possible, and this has not gone unnoticed.

Consumer power

Every Industry involved with the supply of consumer goods understands the importance of aligning values with their audiences. For the food and beverage businesses, this has always been about paying close attention to emerging movements, trends, habits and preferences, and synchronising internal processes to match them. New products and greener practices are quickly commended by the public, and more and more businesses are seeking more information about their Industry’s audiences to satisfy new behaviours and new consumer preferences.
Health-conscious consumption has excelled massively in the last decade, with higher and higher numbers of consumers wanting to know more about their food and where it’s from. “In 2017, about 5.5 percent of total food sales in the United States were generated by organic food.” (2) Additionally, the estimated sales of plant-based meat alternatives in the U.S is set to reach over 30 billion dollars by 2026. With these enormous predictions, it becomes crystal clear why businesses and Industries everywhere are seeking out opportunities in such a rapidly growing movement.
Alongside consumers being driven by healthy products, there is a growing emphasis on environmentally-friendly packaging. One study published in 2018 indicated that “packaging material has the strongest influence on consumer purchase intentions”. (3)
Consumers as individuals invest their values using their purchasing power - Consumers are quick to support businesses who align values with the individual, and this goes further than simply stocking meat-free or organic products. Electrically-powered vehicles are becoming far more common on a commercial scale, with Amazon investing in 100,000 custom-made, last-mile delivery vehicles which will be implemented by 2030. (4) Achieving sustainability aims means restructuring details of sourcing, production and distribution that have remained consistent for decades.

Collaborative efforts within Supply Chains

The nature of supply chains relies on communication and co-operation to function as seamlessly as they can. It is true that a chain is only as strong as its weakest link, and with the prioritisation of environmentally aware approaches, this means every business must look at their own processes to have an impact on a grander scale.

Changing practices

At the heart of improving sustainability lies the knowledge of practices that are detrimental. With more and more information in recent years, we’ve been able to target key processes that demand improvement if Industries are going to function with less environmental impact.
Introducing digital systems have not only made businesses more efficient, but they have allowed companies to get deeper insights into the function of their operations, allowing them to make data-driven decisions which promise positive outcomes.

Reducing CO2 emissions

One of the most obvious, and important changes has been the reduction of CO2 emissions. For Food Service Wholesalers, this has largely meant optimising routes to reduce driving time, with the collateral benefit of reaching customers quicker. This is one of the most easily achievable aims for wholesalers, as it simply demands a more competent planning system.

Digital solutions

Whether it’s order systems, marketing, communications, or business visibility, digital solutions have become the answer to challenges of inefficiency for essentially every wholesaler in the past few decades. Without the adoption of new technologies that massively improve the reliability of operations, any Industry would have been left behind years ago.
They refine the ways we used to work, offering new and improved opportunities and possibilities for growth. Businesses now adopt end-to-end digital systems that identify areas which need improvement, provide more accurate information to allow precise, data-driven decisions to be made regarding product lines, route planning and scheduling, order management, driver tracking and the management of invoicing and payments.
They save time for teams working behind the scenes to ensure deliveries are executed without errors, while letting drivers get to and between customers quicker.
In terms of sustainability, one of the key benefits is reducing wastage - Digital systems pay close attention to stock and sales records, providing companies with more accurate information about what to sell, how much stock to order and how demand fluctuates. This enables businesses to cut down on waste, cutting out lost profits from surplus or insufficient stock levels all the while.

Electric vehicles

This change is still in its infancy, and it is mostly large corporations taking on the challenge of implementing zero-emission vehicles. Amazon is the most obvious example of this. Due to the upfront costs of changing entire fleets, it is only natural that the larger players will be able to invest in such a massive change currently, but it is essential that these larger companies are the first to adopt sustainable fleets, as they then set the trend for decades to come.
Regardless, this transition is gaining momentum and has been largely documented by Industry news - As they become common practice, prices will naturally become more affordable, and as more companies choose to go electric, it will become the norm. However, the Industry is still in the early stages of this implementation, but regardless of this, it is a critical change to put into motion.

Reducing food wastage

We briefly discussed the reduction of food wastage using digital systems earlier on. A large part contributing effort to reducing waste is identifying where wastage is most prominent, which comes from having better data about your stock levels, reorder timing and sales records for each product and customer.
With more data, delivery operations can refine their operation, reducing unnecessary and avoidable wastage by optimising re-order levels and always maintaining the optimum stock levels across inventories. This is a fine balance to meet, as there are issues that arise with both surplus and insufficient stocks, but with better data, it is more easily achievable.

Environmentally-friendly Packaging

Options are vast nowadays with regards to packaging, and choices for manufacturers have never been so influenced by the need to adopt more sustainable options. Biodegradable and environmentally-friendly packaging is becoming an increasingly important factor for end consumers and retailers. Therefore, rethinking how goods are prepared for these 2 links is critical when thinking long-term. Change now allows distributors to get ahead of the curve and shows customers that you are an environmentally-conscious brand, which is a very redeeming quality for any businesses to have.

__Plant-based product lines __

Another benefit of having a closer understanding of trends and consumer habits is the ability to plan and predict future demand, and with a swing towards healthier options being very prominent in the food & drinks industry, aligning product lines with changes in consumption promises steady growth as your customers continue to adapt their own product lines to their customer’s needs.

Key aims to enable a greener future for wholesale:

1. More efficient practices which reduce carbon footprint
2. Leaving behind malpractices that leave a mark on the environment
3. Keeping up to date with evolving consumer trends - largely conscious consumption
The point to emphasise which will ease this transition more than anything is preparation, and having and using the appropriate tools and methods to handle rapidly changing demand, Industry standards and practices.
Changing directions on a company level can bring uncertainty - Bidding farewell to older systems and ways of working can feel unnatural and bring unease, but in the long-term, being proactive now and looking for alternative ways to achieve a more sustainable, streamlined business will not go unnoticed by customers, new and old as environmental-consciousness plays an ever-strengthening role in every Industry.
References

(1) https://www.barclayscorporate.com/content/dam/barclayscorporate-com/documents/insights/industry-expertise/sustainability-in-retail-and-wholesale.pdf (2) https://www.statista.com/statistics/273090/worldwide-sales-of-organic-foods-since-1999/ (3) https://www.researchgate.net/publication/329736165_Product_Packaging_and_Consumer_Purchase_Intentions (4) https://www.statista.com/statistics/877369/global-meat-substitutes-market-value/

How has the Wholesale Industry evolved during the pandemic?
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