GLOBAL: Balancing green agenda and pricing a challenge, admits Coca-Cola Enterprises chief
The CCE boss admitted it was a challenge keeping prices down while operating a sustainable business
Consumers expect companies to build a more sustainable supply chain but won't accept paying higher prices for products, the CEO of Coca-Cola Enterprises has said.
John Brock told an international audience at the British Business Embassy's food, drink and retail summit last Thursday (9 August) that firms like Coca-Cola Enterprises (CCE) face a challenge to build sustainability into current margins.
"Even if consumers are interested, they're not really interested in sustainability at a higher price," Brock said during a panel discussion.
Volatile food commodity prices and weak economic conditions in key markets means drinks and food manufacturers are already fighting to absorb costs.
However, Brock reiterated that CCE is committed to a "very aggressive sustainability programme" and is one of only 22% of companies listed on the Fortune 500 stock exchange that has a sustainability committee as part of its executive board.
The bottler's suppliers, Brock said, know their contracts could be torn up if "they don't play the right game on sustainability".
By 2020, the bottler has said it wants the carbon footprint of the "drink in your hand" to be one third less than it was in 2007. Rather than concentrating on emissions inside its own factory gates, CCE is one of several companies examining its entire supply chain, from field to fridge.
Packaging accounts for nearly half of CCE's carbon footprint, hence a particular focus on recycling. Within six weeks of the London 2012 Olympics closing, for example, all bottles from Olympic venues will be back on the shelf as 25% of another plastic bottle.
Sitting alongside Brock on the panel discussion, Kraft Foods Europe's president, Tim Cofer, said companies and investors looking for short-term solutions to environmental and security issues in their supply chains will be disappointed.
"I can't tell you that our sustainability investment in year one brought glorious financial returns," he said. "[But] we all need to be confident that the return on investment will be there in the long-term."
Those who propagate the 'business case' for sustainability will have been cheered by Richard Gillies, director of CSR at Marks & Spencer.
"Last year, we had a net benefit of GBP100m (US$157m) from our sustainability initiatives," he told the audience, citing lower energy bills as a major source of savings.
This month, Tom Vierhile at Datamonitor looks at recent developments in the realm of sustainable packaging for drinks products....
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