by Caroline Rennie
Nestle Waters has told Plastics & Rubber Weekly that it expects its suppliers to be making demonstrable progress towards sustainability:
“We are going to be pushing more on our suppliers to figure some of this stuff out” said Kim Jeffery, President Nestle Waters.
Are you ready the day your customer tells you he “expects you to figure this stuff out”?
Customers flag their intentions to the stakeholders they worry about: retailers, environmental NGOs, government regulators, and interested consumers. What they don’t necessarily remember to do, is flag their intentions to you – until you receive a demand in the mail. In their annual report, Nestle Waters North America stated that they want to have PET bottles with 25% recycled content on the market by 2013, while developing a “next-generation bottle” manufactured entirely from recycled materials or renewable materials by 2020.
If you are not ready for these kinds of demands, the costs to you can be huge. Coca-Cola was behind the successful development by its suppliers of the plastic can in the 1980s (the PETainer – PET body with aluminium ends). The aluminium industry convinced municipalities and community groups (who earned money collecting aluminium cans) that if a tiny number of these containers came to their smelter, the smelter would explode and aluminium recycling would be finished. An exaggeration perhaps, but effective enough to convince several states to ban the can and scupper its chances of making it in the market. The result: Coca-Cola didn’t buy, and the development, testing, marketing and manufacturing costs were born entirely by the suppliers, with no return.
Today Nestle Waters is under pressure as cities and counties (from San Francisco to Toronto to New York to Bern) call for a ban on plastic bottles for water on environmental grounds (there is even an award winning documentary in theatres called “Flow” that takes issue with Nestle’s use of water. Nestle felt compelled to respond to it, also by video, though on their website rather than theatres). To save their business Nestle Waters want to ensure their environmental story is good and improving – and they are turning to suppliers to make this so.
Which brings us to the question – how do you ensure that your product is “future proof” when your customers, under pressure, put the performance burden on you?
- Check their websites and reports and find out what their public commitments are with respect to the environment;
- Check out the broader context – in this case “bottled water bans” – and see where the pressure is coming from;
- Determine how you impact your customer’s environmental impact – and what you can do to reduce not only your own impact, but the impact you have on them.
- Start developing the products that will let you grow as the pressure increases: In this case, if you were providing the raw materials to Nestle you would want to have had a programme working on recycled content and renewables for some time if you are to meet their market demand by 2013. (“By 2013, we plan to reduce carbon intensity by 20% across our full value chain — from the production of plastic resin to delivery of products to our customers.”)
- ..and you may want to know what your competitors and Nestle’s competitors are doing already. Coca-Cola has had a more ambitious plan on their website for years. And Wal-Mart is increasing the pressure on the entire supply chain to provide products that are zero waste or fully renewable.
Related posts: