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Soapbox: Why sustainability makes perfect business sense

Published:  10 February, 2022

Mariella Menato, strategy director at drinks design specialist Denomination, talks about the rise of sustainability as a key consumer requirement, and why today, more than ever, it is vital for business success, as well as safeguarding our planet.

More and more drinks producers are creating products with sustainability in mind because they understand that it’s both an environmental and a commercial imperative. But we have a long way to go to join up all the dots and establish a truly effective sector-wide response.

As it stands, there are different levels of commitment and understanding throughout the value chain, from growers and winemakers to brewers, distillers and retailers, not least because of confusion and the costs involved in implementing positive change. But, as an industry, we’re finding that the decision is fast being taken out of our hands. Consumers care about the state of the planet and are making big demands of producers, and Extended Producer Responsibility regulations being tabled from the EU to the US pose enormous challenges to the way the industry operates. To stay in business, we have to accommodate and adjust.

The media has been saturated with stories about sustainability and environmental, social and governance initiatives in recent years, and rightly so. Regardless of sector – energy, transport, fashion, food, drink – we simply can’t afford to kick the can down the road.

Not least because bumping sustainability issues makes no commercial sense. According to You Gov, many consumers worldwide are willing to pay more to address their environmental concerns. Three in five shoppers in Germany agree they’re happy to bear the additional expense to buy products that are better for the environment. Other markets where more than half of grocery and drinks shoppers show a similar inclination include the US (58%), UK (57%) and Australia (53%).

But it’s not just about consumers. Increasing numbers of businesses in the drinks sector are learning that, for many stakeholders, staff, VCs and investors, sustainability is a priority too. Adopting an environmentally switched-on agenda is now essential for futureproofing your business, as well as the planet.

Sustainability is also becoming the latest mark of luxury. US management consultancy Bain & Company has done a lot of work on the “post-aspirational mindset” and the rising influence of Generation Z and Millennials on high-end spending. The research demonstrates that social and environmental values are key to engaging the younger luxe consumer, who is looking for brands that not only deliver on product excellence, but also reflect their desire to make the world a better place.

To respond to these modern cultural principles and safeguard our sector, we need to get our house in order. The pandemic and recent climate events have shone a light on the fragility of our supply chains, so strengthening them through the lens of sustainability will not only work towards saving the planet, but will also ultimately save businesses time and money and improve the consumer experience, because in breaking down your supply chain you can identify areas of waste and inefficiency.

We’re seeing some of the bigger brands put pressure on suppliers to up their game, even offering financial incentives in some cases. Many glass and bottle manufacturers, for example, are fast-tracking the development of their sustainable portfolio because of client demand.

A big focus for Denomination is to guide the drinks industry along the road to impactful and meaningful change by embedding circular thinking into the packaging value chain. We call it our Futureproof model, and we work in tandem with sustainable solutions group Circuthon, global consumer insights specialist Wine Intelligence, and some of the world’s leading packaging manufacturers, suppliers and printers, to help drinks brands keep up with shifts in regulations, stay on top of product innovations, their associated costs and the impact on the bottom line.

Brand identity and packaging are powerful tools here, too – done well they can inspire consumers to make better choices and create positive impact. But there are a lot of misleading environmental claims (aka ‘greenwashing’) in circulation, so, as a brand owner you need to convince people that you’re legitimate.

Storytelling, especially in drinks marketing, is intrinsic to creating a brand that people can believe in. Every great packaging strategy originates from a strong, authentic brand story – nowhere is that more important than in demonstrating green credentials.

Most people want to make the right choices when it comes to sustainability, so a significant role for designers like us is to tell businesses’ stories the right way so consumers can do just that, and recognise you as the brand that empowers them to create the change they want to see in the world.