Every industry is advised to go green because it’s a smart business practice, a good thing to do, and everyone wins. But businesses that face relentless margin pressure may view the time, money, and effort needed to meet sustainability goals as too disruptive, lacking a desirable payback, and, therefore, a risk to their survival.
Wholesale distributors are no exception. From an economic perspective, sustainable distribution can be challenging. The promised benefits aren’t immediate guarantees for improved brand reputation. Perhaps more frustrating is the constant investment in technologies, processes, and assets that compete for the same budget pool.
There are many aspects of sustainability that should concern distributors, and its impact on the bottom line is certainly one of them.
So maybe it’s time to redefine the meaning and possibilities of sustainability in the context of the wholesale industry’s operational, strategic, and market realities.
Consumers, investors, and partners are increasingly making decisions about your company based on a sustainable business model. Here, we examine the rise of sustainability as a business value.
All businesses have the power to reinvent themselves as intelligent enterprises that run as unified networks. However, each industry may need to build a framework that accounts for its direct and indirect influence on social sustainability, environmental impact, carbon emissions and reducing waste.
Take, for example, Wilbur-Ellis Company Inc. The 100-year-old distributor of agricultural products such as seeds, machinery, fertilizer, and animal feed, believes that balance is the key. “To make it 100 years is the definition of sustainability,” Wilbur-Ellis CEO John Buckley said during Forbes’ Future of Food Summit. “But the other piece I think is important is that you don’t last long without being profitable.”
Clearly, sustainable distribution presents a wide range of opportunities for the wholesale industry.
Some distributors promote high-energy efficiency assets that allow customers to benefit from green tax credits. Others respond to federal, state, or local government incentives by using low-emission or electric trucks to make their fleet more sustainable and encourage different logistics methods or bundles to reduce the extended supply chain’s carbon footprint. And in some cases, distributors are obtaining certifications and industry seals of approval to demonstrate the value they offer customers.
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Considering the individualized nature of their sustainability strategies, distributors should gradually evolve based on the changing needs of their markets. This slow-and-steady approach allows decision-makers to identify opportunities that go beyond the traditional business model of selling products. Uncovering new possibilities while negotiating with manufacturers for products takes the entire product lifecycle into consideration.
The agriculture segment of the BayWa Group is a great example of a a green distributor.
They’re seizing this moment to become a unique player in the farming community’s supply chain. By pioneering renewable energy projects and technologies, the company combines revenue growth with a worthy environmental purpose.
Such initiatives include developing solar panels that help farmers achieve larger crop yields and generate energy while reducing their use of water and fuel. Moreover, BayWa’s satellite imagery technology captures information that allows farmers to rethink where they plant their crops, how water is used, and which machinery is most effective.
The wholesaler United Natural Foods Inc. (UNFI) is going a step further by improving its logistics and supply chain operations. By retrofitting 53 of its diesel-powered refrigerated trailer units with electric engines, the company is saving approximately 135,000 gallons of diesel fuel each year, reducing particulate matter pollutants and greenhouse gas emissions. For UNFI customers, this practice is a factor that can further drive down the carbon footprint of its business.
The efforts of distributors like BayWa and UNFI dramatically impact how their customers operate while providing competitive differentiation.
When distributors accept the reality that sustainability is already changing how their customers run their business and procure goods, the profitability side of the equation becomes clear to them.
And the sooner they take charge of their sustainability initiatives, the required skills, the gradual steps and additional investments, distributors can position themselves to increase profitability and fuel long-term growth.
