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Jennifer Grebow is editor-in-chief of Nutritional Outlook.
Why sustainability makes sense for the dietary supplements and healthy food industries.
These days, it makes sense for companies to maintain an environmentally friendly profile-more customers demand it; it’s good for company image. But sustainability also makes sense when it comes to the bottom line. That’s what I learned at a February press event hosted by ingredients supplier DSM at its headquarters in Basel, Switzerland.
DSM is looking at sustainability as a profits driver in several ways. First, trimming waste-such as excess energy, water, or materials use-also cuts down operating costs. Secondly, with most brand marketers looking to become more sustainable themselves, including in the ingredients they source, eco-friendly suppliers face increasing business opportunities.
Sustainability has in fact been proven to yield higher profits-something pointed out by Lara Yacob, one of the event’s guest speakers and a representative of investment firm Robeco. Yacob displayed a chart showing that over the last decade, companies focused on sustainability have financially outperformed companies that have not-a fact that hasn’t gone unnoticed by investors.
“Sustainability is no longer a matter of philanthropy and corporate citizenship, but an integral part of how these companies do business,” Yacob said. Today, she said, “sustainability and shareholder value go hand in hand.”
DSM has taken an innovation-based approach to sustainability. Fokko Wientjes, DSM’s director of sustainability, said, “Eighty percent of what comes out of the innovation pipeline today must now be ‘Eco Plus’-environmentally better than the materials they are replacing.” Over the next two years, the company will continue its ambitious effort to measure the eco-footprint of its entire nutrition ingredient portfolio and supply chain and figure out where improvements can be made.
Companies looking to do future business with DSM should be aware: this aggressive attitude toward sustainability will guide the company’s future decisions-including new product development, mergers and acquisitions, research and development, and third-party sourcing. “If something doesn’t meet certain sustainability standards, we won’t be able to go forward with it,” said Anthony Hehir, global marketing manager, Quality for Life, DSM.
Thoughts about sustainability filled my trip, even during sightseeing and at my hotel. The ferry that took our tour group back and forth across the Rhine River ran using no power except the energy of the river’s natural current. And upon first stepping into my hotel room, I simply couldn’t figure out how to turn the lights on. (Please don’t laugh.) I had to telephone the front desk to figure out that the only way to turn the lights on was to insert my hotel key card into a power box and leave it there-meaning there was no way to leave the lights on, wasting electricity, any time I left the room with my key.
That may just be the perfect example of how participating in sustainability has become less of a choice and more of a necessity in order to survive. Has your company seen the light?