Sustainability drives business gains

Articles
April 06, 2009

Sustainability drives business gains

Food and beverage companies that lead in sustainability practices gain competitive advantage, lower their year-over-year energy costs by as much as 19%, and acquire customers at a 15% faster rate, according to a new international study by Aberdeen Group. “Top-performing firms have made a resoundingly strong business case for integrating sustainability into corporate strategy,” stated the report, Sustaining the Global Food Supply Chain: Three Keys to Gaining Competitive Advantage, which was conducted in support of the Marrakech Process of the United Nations agenda on Sustainable Consumption and Production. A majority of respondents (56%) rank “the need for competitive advantage” as the top business pressure driving their organization to focus on a sustainability initiative. Where do find that advantage? Study findings show that leaders (the top 20% of companies surveyed) also experience these gains: • 17% decrease in waste and disposal costs • 13% decrease in defects and non-conforming goods over the last 12 months • 5% decrease in year-over-year overall operational costs relative to changes in volume of business

Food and beverage companies that lead in sustainability practices gain competitive advantage, lower their year-over-year energy costs by as much as 19%, and acquire customers at a 15% faster rate, according to a new international study by Aberdeen Group.

“Top-performing firms have made a resoundingly strong business case for integrating sustainability into corporate strategy,” stated the report, Sustaining the Global Food Supply Chain: Three Keys to Gaining Competitive Advantage, which was conducted in support of the Marrakech Process of the United Nations agenda on Sustainable Consumption and Production.

A majority of respondents (56%) rank “the need for competitive advantage” as the top business pressure driving their organization to focus on a sustainability initiative. Where do find that advantage? Study findings show that leaders (the top 20% of companies surveyed) also experience these gains:

•    17% decrease in waste and disposal costs
•    13% decrease in defects and non-conforming goods over the last 12 months
•    5% decrease in year-over-year overall operational costs relative to changes in volume of business

Sustainability leaders drive down operational costs while increasing operational efficiency, noted report author and research analyst Jhana Senxian.  “This has especially high impact during economically challenging times.  The hyper-visibility and critical nature of food company practices—and missteps—have driven” leaders to responsibly sustain their business as well as the environmental and societal infrastructure upon which it depends, he added.

By comparison, the lower 80% of food and beverage company performers posted these results:

•    9% climb in year-over-year energy costs
•    1% rise in year-over-year waste/disposal costs
•    7% increase in their customer acquisition rate
•    1% decline in defects and non-comforming goods
•    5% expansion of year-over-year overall operational expenses

The 33-page report specified how leaders leverage sustainability and corporate initiatives to: increase food safety and quality; dramatically reduce costs and waste; build customer and stakeholder loyalty and awareness; and achieve social and environmental stewardship. Even in the recession, sustainability goals and initiatives remain as strong—or stronger—than before for 89% of the leading companies, versus 44% for all others.

These findings present a strong business case for an unwavering sustainability culture at food and beverage companies, in our opinion at SupermarketGuru.com. Sustainability yields plenty of hard benefits along with the soft feel-goods. Visionary CEOs ought to see that their own business viability is “inextricably linked to social and environmental stewardship,” to borrow a phrase from the report itself.