Ambitious Net Zero goals set by the UK government have met with mixed responses from the UK business community – especially in the context of rising energy and raw materials prices. For the Unleashed Roundtable Series we spoke to 5 UK SME leaders to get their views on Net Zero goals, and its effects on their business operations.
Meet our customers, the SME supply chain experts:
- Doug Clark is Co-Founder and Director at Jenier World of Teas, a wholesale Supplier of 400 loose leaf teas or biodegradable tea bags.
- Nic Fordham is Head of Operations at Southwestern Distillery, home of the World’s Best Gin TARQUINSGIN.com |
- Sam Gilks is a Supply Chain Consultant at Young Foodies, which offers services to FMCG challenger brands.
- Denis Kelleher is CEO of Good Culture Kombucha – the world’s leading distributor of freshly fermented organic kombucha ingredients.
- Thomas Robson-Kanu is Co-Founder and CEO of The Turmeric Co.
Net Zero more than a trend
Thomas Robson-Kanu, Co-Founder and CEO of The Turmeric Co, has a stark message for those who believe the Net Zeo movement in business is just a trend. “If it isn’t a core part of your values and your purpose, then ultimately, you’re going to be losing a lot of potential customers.”
Supply Chain Consultant Sam Gilks concurs: “Sustainability isn’t a trend – if you think it is, you’re wrong. It’s absolutely the thing.”
“You need to pay really close attention to this, because every consumer out there is concerned about this, and if they’re not, those consumers won’t be around for very long.”
Circular supply chains can improve your bottom line
It’s also important to note, says Robson-Kanu, that aiming for Net Zero emissions and lifting sustainability performance can lift financial performance too. A circular supply chain view of your packaging, for example, can cut costs.
“It doesn’t just have to be about sustainability and about the environment. If you’re doing it correctly it can also positively impact your margins and the costs of the business – because that bottle and that packaging and that liner and that icepack is now coming back into circulation.”
The challenge, says Nic Fordham of Southwestern Distillery, is to “design your supply chain so that you can get not only environmental sustainability, but also margin benefits as well.”
Sustainable supplier selection is key
A good sustainability reporting framework will see you measuring the impact of your suppliers as well as your own operation. Thankfully, says Doug Clark – the Co-Founder and Director at Jenier World of Teas – this has become increasingly commonplace.
“When we went through supplier selection, we found is that a number of suppliers are now carbon neutral. They’re using photoelectric electricity generation in a significant way that makes them actually carbon neutral.”
As Gilks points out, the push to Net Zero is starting to make a real impact on the performance of the supply chain: “I was on tour this week with a lot of 3PLs across the country, and it’s amazing what they’re doing. I went into a 3PL and there were deep-freeze warehouses of 60, 70, 80 thousand feet running on solar power – almost 90%.”
Creatively reuse raw materials and byproducts
Looking for ways to improve sustainability performance can turn up unique opportunities, says Fordham. He gives the example of botanical ingredients that go into his gins: “I like the fact that, okay, I only want the peel; I don’t want the fruit. So who do you partner with that you can go into a joint venture with? I’ll take the peels, you take that.”
“You both get benefit – your waste and how you remove it from the business is decreased, but also the cost of the actual ingredient that you’re using should go down, because there’s a second value stream.”
At one distillery Fordham went as far as investing in a biomass boiler, which converted food waste back into thermal energy.
The key, says, Fordham, is taking cost out of the business by using a pre-used item again.
“For example I’ve now negotiated so that when our boxes or cases go out, we bring them back on-site and then send them back to our e-fulfilment centre, and they use them a second time. So not only does that take costs from my packaging waste, it also means I only have to pay them the first time. So that 67p case has now gone down to, say, 30p.”
“Secondary use for us is where we sit in terms of manufacturing,” says Robson-Kanu. “That’s the opportunity.”
“And an example – we put whole raw turmeric root, whole raw ginger roots, whole raw watermelons which are fleshed on-site – we’re currently processing around 5 tonne of watermelon a week. We then use raw pomegranate seeds, raw pineapple whole including the core. So the yield of our manufacturing process is very good. We’ll achieve 70–80% yield, but that’s through the uniqueness of our extraction process to deliver the finished product. But that 20% of by-product is ultimately high-quality raw material.”
“So we have tested things such as snack bars. We have tested things such as pastes. And a very interesting area which we’re looking forward to diving into once we have more resources within the business is repurposing that for pet food.”
“Again, raw turmeric root and turmeric, because of its active compounds, is a growing market in terms of pet supplements. So we’ve tested some areas to find out how how we can utilise that and put it into a product format which would then be extremely appealing for pet owners and the pet market.”
“There’s just masses of opportunity. Not only in terms of reducing costs, driving towards net zero, but also creating a commercial model which is beneficial to the market.”
Fail fast and share your journey
Gilks takes a leaf from the Silicon Valley book when it comes to telling the world about your sustainability practices: Fail fast and share your journey.
“There’s no harm in getting out there one time and failing and going again,” says Gilks, “because that’s how you learn. So I would always be really encouraging to new start-ups and new businesses who want to push the envelope [with the sustainability] of what they’re trying to do.”
“Just be cognisant of, if you promise something on the tin, just make sure you deliver behind that, because there’s no point trying to hide your way behind statistics or greenwash it, because in the end you’ll get found out. So yeah, do it right from the beginning, but do it fast.”
Robson-Kanu agrees – and cautions against traditional manufacturing firms being too shy about what they do:
“When it’s time to distribute the message, taking everyone with you on that journey, including your customers, has real value.”
“I think that’s something which a lot of manufacturing companies, because they’re so focused in terms of delivering the product, they almost miss the opportunity to share that journey.”
Everyone’s facing significant challenges, in this climate. But we’re all working hard to get through it, we’re all trying to make positive steps, and we’re continually making impactful actions which ultimately, if continued over time, will really make a positive change.”
Thanks to our customers for sharing their learnings and insights. We hope you found them useful. This is the fourth in the Unleashed Supply Chain Roundtable Series. In episode 1 Unleashed customers discuss Supply Chain Resilience and Mitigating Risk. In episode 2 we explore Scaling in a Compromised Supply Chain. In episode 3 we discuss Supply Chain Tactics for winning in Europe.