December 21, 2018

Circular business models deliver sustainability wins

By Suzanne Lindsay-Walker | Columnist

Consumer choice is exploding in today’s technologically advanced society, transforming the methods for making, moving and selling goods. At the same time, people also expect businesses to minimize their environmental impact to meet this demand. These seemingly contradictory trends put increased pressure on companies to find creative ways to improve their sustainability efforts.

Companies today are responding in positive ways, increasing their efforts to improve the world and society in which they operate — whether that means reducing corporate carbon footprints, minimizing waste, or donating to and volunteering with nonprofits.

Companies in the produce industry are no exception. They’re looking for, and finding, ways to maximize agricultural output while doing it in the most responsible way, for both their land, their employees, customers and the communities they serve.

One way businesses are doing so in this industry and beyond: they’re evaluating business partners, so they can identify and then collaborate with suppliers and vendors that have circular business models.

Eliminating waste

At its most basic, a circular business model ensures that certain products or materials are recovered, repaired and shared again and again. It’s an approach that aims to reduce or eliminate the amount of waste generated in produce supply chains.

CHEP, the global leader in pallet pooling and supply chain management solutions for the manufacturing and retail sectors, has a circular business model that provides a good example of how these types of systems work. CHEP and its parent company, Brambles, help move more goods to more people, in more places, than any other organization on earth. CHEP and its more than 300 million trademark blue pallets, crates and containers form the invisible backbone of the global supply chain, and its assets are continuously in motion across 55 countries.

CHEP customers share and reuse blue pallets over and over again, effectively eliminating — not just reducing — waste. This model is most effective when a supplier has an extensive network. CHEP, for example, provides service to so many customers in so many places across the world that anywhere our blue pallets end up, we can reuse them again and again.

Improved public, investor opinion

This circular business model also enables CHEP to give clients a sustainability report that measures the environmental impact of the supplier choice they made. Investors and the public are increasingly asking for this level of transparency.

Between 2009 and 2017, Melon 1, the largest watermelon producer in the U.S., worked with CHEP and was able to avoid sending nearly 1.7 million pounds of solid waste to landfills, and reduced carbon emissions by nearly 1.3 million pounds (that’s like taking 1.3 million passenger cars off the road for one year).

Suppliers with circular business models can often add value in other areas because of their advanced supply chain. CHEP’s pallets are constantly on the go, and opportunities abound within the supply chain to generate revenue or discounts for customers. Empty truck miles can be filled by utilizing advanced analytics to identify synergies, generating revenue opportunities for the customer. For example, in one year, CHEP customers in North America generated more than $12 million in transportation revenue and achieved better asset utilization of their private fleets. One major retailer moved more than 8,000 loads for CHEP, filled almost 1 million empty miles and generated more than $2.5 million in revenue.

Whenever possible, businesses should consider working with manufacturers, suppliers and retailers that are pursuing a more circular, sustainable business model. Constantly reusing materials in a virtuous cycle that dramatically reduces waste and emissions is the ultimate way for the produce industry to win the sustainability game.

— Suzanne Lindsay-Walker is director of sustainability for Brambles, CHEP’s parent company. Brambles’ purpose is to connect people with life’s essentials, every day, and its 610 million pallets, crates and containers form the invisible backbone of the global supply chain.

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