ANAHEIM, CA -- Becoming a more environmentally friendly firm basically involves a more efficient use of resources, which in turn results in significant cost savings.
That was the view of a group of panelists who discussed "Finding the ROI of Sustainability" during a workshop session Oct. 4 at the Produce Marketing Association Fresh Summit International Convention and Exposition, held here Oct. 2-5.
Kathy Means, vice president of government affairs and public relations for the association, moderated the session and also gave some real-world examples of cost savings as she set up the discussion by giving an overview of the sustainability movement within the fresh produce industry.
Ms. Means said that there are many examples of significant cost savings when firms adopt more sustainable practices, and she needed to look no further than the headquarters of her own employer. The association has gone to an on-line filing system, replacing the paper-heavy process that it used in the past. She said that PMA has saved $80,000 in paper costs in the first year alone, and she noted that the association's web site lists many other examples, including the saving of 60 million gallons of water by PMA member Stemilt Growers Inc. in Wenatchee, WA, when the firm made a more concerted effort to cut its water use.
New Zealand Fresh Cuts in Auckland, New Zealand, determined that it would attempt to cut its carbon emissions in the water, power and refrigeration systems it uses, and careful analysis led to conservation practices and a savings of more than $500,000 per year.
Ms. Means said that a good sustainability program can save real dollars and it can also enhance a company's image, increase efficiency and attract and retain employees. She disclosed the results of a survey of PMA members that showed a significant percentage is adopting sustainability practices. Most are doing so because of pressure from their own buying community, and she said that research also shows that a significant number of consumers at least sometimes consider the environmental practices of a company when buying its products.
The three panelists who participated in the session all have interest in the sustainability movement, and each agreed that their efforts have resulted in costs savings.
Tina Fitzgerald, director of produce and social accountability for the Subway- affiliated Independent Purchasing Co-op in Miami, said that Subway has adopted many sustainable practices as a way to create value for the company's franchisees. In both opening remarks and during the panel discussion, Ms. Fitzgerald reiterated that everything Subway does along these lines must have a return on investment.
Initially, Independent Purchasing went after what she called "the low-hanging fruit," which were identified as the easiest and most profitable ways to adopt sustainable practices. Reducing packaging and creating a more efficient distribution system were the first pieces of low-hanging fruit.
Ms. Fitzgerald said that because Subway has 32,000 stores, any savings becomes tremendous when multiplied by the number of stores. The reduction in packaging has saved $5 million annually and eliminated the use of 3 million pounds of plastic. The firm's more efficient distribution systems have reduced road miles driven to a number that is equivalent to taking more than 120,000 cars off the road every year, and it saves $8 million annually in fuel costs.
Nelson Longnecker, vice president of business innovation for Four Seasons Produce Inc. in Ephrata, PA, had a similar story to tell, though on a much smaller scale, which demonstrated that virtually any company can take waste out of its own system and save money.
In 2005, Mr. Longnecker and his colleagues at Four Seasons created a G.R.E.E.N. team, which stands for Gaining Resource & Energy Efficiency Now. Since that time, the company has reduced electricity use by 25 percent and water use by 30 percent and is currently recycling 87 percent of its waste stream. He said that the payback is on the firm's sustainability projects have ranged from six months to five years, but all of them do have a return on investment.
Mr. Longnecker called the company's sustainability effort a "journey" that is always revealing new possibilities to reduce the firm's use of resources. He told the crowd that this effort is a necessity and that every firm should be participating because "in the next 10 to 15 years, we are going to live in a world where resources are constrained or at the very least very expensive."
Jeff Dlott, president and chief executive officer of SureHarvest in Soquel, CA, which has helped many companies develop their own sustainability programs, ran through the important steps of such a program. He said that it is a five- step process involving gathering information, developing a strategy, building a plan, executing the plan and refining it and reworking it over time.
Like the other panelists, Mr. Dlott said that one of the main keys to success is to have complete buy-in by upper management as well as the employees throughout the firm. The panelists all agreed that when first starting a program, it is a good idea to pick an area where payback is quick and significant.
"A couple of wins, and [management] will listen to you," Mr. Dlott quipped. Mr. Longnecker said that for a sustainability program to be successful and sustainable, a company "needs a champion and a project leader" to keep the project rolling and on track.
Ms. Fitzgerald said that it is very important to do baseline measures so the success of the program can be quantified as time goes on.
Each of the panelists also said that sustainability practices can be used as a competitive advantage. Although she is not yet marketing the carbon footprint that is involved in each sandwich that Subway sells, Ms. Fitzgerald can envision a future where that is every bit as important as the number of calories in each foot-long offering.