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Nick Gillett: Sticks, carrots and sustainability in the spirits sector

That’s where we are right now. It’s not that the industry isn’t behind it – but the desire to improve is very much limited by the need to stay in business. But with the balance sheets aside, a transformation is still very much necessary to minimise the effects of climate change. It’s a sad state of affairs, but there are a few glimmers of hope…

The importance of demand

For a while, the rise of conscious consumerism meant that it was commercially savvy for businesses to prioritise sustainable practices, because it was backed up by demand. But Mintel’s UK Sustainability in the Food Market Report for 2025 found that there was a very real fall in the prevalence of sustainable products, due to a decline in conscious consumerism this year. The cause of this is very simple: people have less money. Sustained low consumer confidence has increased price-consciousness too, so people are actively moving away from making morally instigated buying decisions, to prioritise price. Thankfully, the same report forecasts that we will return to increasing levels of conscious consumerism as purse strings loosen, maybe as early as the end of this year.

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Now not everything that businesses do is driven by demand. But in FMCG, it’s your bread and butter, right? You’re creating great products that people want. But we live in a world where doing things more sustainably usually comes with an elevated price tag. And that narrative around the cost of sustainability isn’t helpful either. We’ve learned from greener heating systems, electric cars, etc, that being green comes with an immediately elevated price tag, whilst high profile greenwashing cases add an air of suspicion in the eyes of the consumer. The fact is – if you’re making greener decisions as a consumer or a business, you’re doing it because it’s important to you, not because it will be cost effective.

The proverbial carrot, not the stick

I say all of this, as someone who thoroughly wants to see change in the industry. I am concerned about climate change; I want a cleaner, greener world for the next generation. There’s a lot that needs to be done to get us out of this slump, and that responsibility starts right at the very top.

The UK government’s default approach to driving behaviour change is tax. And it’s punitive. Whether you’re looking at the failed Deposit Return Scheme in Scotland, or the controversial Extended Producer Responsibility for Packaging (EPR) scheme, these are methods of punishment. And that can only take you so far.

To put it frankly, the EPR scheme will work to some extent, but it’s a lot to start commercially penalising businesses when you’ve already piled extra costs on them – National Insurance hikes, business rates, and increased alcohol duty. Instead of the proverbial stick, why can’t they offer a carrot?

I’m not a politician by any means. But common sense tells me that offering incentives alongside these schemes would drive even more appetite to invest in more sustainable practices. There are ample funds dedicated to ‘greenifying’ UK industry – why can’t some of these monies be spent on offering rewards to businesses who lower their carbon footprints? Maybe it’s in the form of business rate discounts, kickbacks on their energy bills, or some quantifiable ‘green credit’ they can cash in on their tax bill. Whatever the format, I’m certain it would be well received by the industry. We saw similar incentives work with electric cars; and similar failures once those incentives ended.

The glimmers of hope

At the start of this article, I mentioned glimmers of hope. And these have nothing to do with government, but instead the businesses that are innovating and driving progress despite the difficult landscape in front of them. There are numerous spirits producers who are doing it right. Two Drifters are firmly leading the way in terms of carbon reduction – namely because they made carbon a key consideration from conception. They have an electric distillery; a close-loop chilling system to create production efficiencies; and created their very own carbon tax, to create a commercial ‘punishment’ for any unavoidable carbon generated throughout the supply chain.

Another great example, for very different reasons, is Penrhos spirits. They moved to a 100% recycled aluminium bottle for their range in 2022 – and now lots of brands are following suit. There are lots of reasons aluminium is much more sustainable than glass, and it’s much easier to repurpose and recycle. And Penrhos can firmly say they were ahead of the curve when they introduced it years ago.

But aside from producers, there is a business and a solution that has the potential to absolutely change the game for sustainability in the spirits and hospitality industries. And that’s ecoSPIRITS – a closed-loop distribution system that almost eradicates the need for glass bottles in venues. Put simply – high-volume ‘totes’ of each spirit are delivered to venues and refilled. The technology is being adopted globally, and the ‘big boys’ of spirits are on board, which of course is going to speed up adoption.

I firmly believe that it’s innovations like these that will change the game – not anything that any flavour of government can or will do. I come back to this point time and time again, but the spirits industry is full of innovative, creative entrepreneurs. It’s that dynamic spirit that will drive sustainability in the industry. So, for anyone who’s frustrated at the recent slowing of progress, panic not. Technology is evolving, good work is being done. And when there’s room to breathe again, it will very much be atop the industry’s agenda.

Nick Gillett is MD of premium spirit specialist Mangrove UK.

• Spirits
• Business
• drinks
• innovation
• Sustainability
• fmcg
• drs
• Mangrove UK
• recycle
• EPR