SPECIAL REPORT: Supply chain sustainability

As market interest in sustainable business practice increases, many wine producers are keen to work with partners that have excellent environmental credentials. But what does that really mean and what areas should producers be considering to achieve a truly sustainable supply chain? Liam Maguire explains 

Only ten years ago, shipping wine in bulk and bottling it in the UK was practically unheard of. But thanks to improved processes and a greater technical understanding, bulk shipping is enjoying a continued growth.

This is, in part, due to an investment in state-of-the-art packaging facilities ensuring local market needs, such as screw cap closures or different sized bottles, can be easily met. But what other benefits does bulk shipping offer?

It’s better for the environment. 

A standard tanker will hold between 12,000 and 13,000 standard 75cl bottles of wine. The same size tanker will hold the equivalent of 32,000 bottles, if that liquid is packed in bulk, meaning that more than double the amount of liquid can be moved in the same number of shipments, cutting carbon emissions and associated costs in half. The Waste and Resources Action Programme has concluded that, shipping wine to the UK in this way from the southern hemisphere saves 137g of carbon per bottle. 

It offers better quality control.

Wine shipped in bulk also has a much better thermal inertia than wine shipped in bottles, due to the increased amount of liquid. In bottle form, wine temperatures on a shipment from Australia to the UK can reach as high as 60˚C. Not only does this significantly damage the overall taste and quality of the wine, including accelerated ageing and premature browning, the high humidity results in excess moisture, encouraging the growth of mould and mildew and possibility of damaging the containers.
In comparison, the temperature of the liquid shipped in bulk varies by, at most, 10 to 15˚C, while a rapid improvement in flexi-bag technology has significantly reduced the harmful ingress of oxygen into wine during transit.

So far, the benefits of deep-sea bulk shipping have been enjoyed by the volume end of the market – the large multi-national producers, multiple retailers, Scandinavian monopolies and importers, and large on-trade chains. Over the coming decade however, there is a huge opportunity for mid-tier and independent players to access the cost, logistical and cash-flow benefits currently enjoyed by larger companies.

Innovations in logistics

Over the coming years, logistics will increasingly be seen as a crucial element of a wine producer’s route-to-market and sales strategy, with more collaboration between producers at the point of origin to consolidate the shipping of finished and bulk wines, and help negotiate better freight pricing.

Improvements in the supply chain will be key to ensuring processes remain as sustainable as possible, while real-time information and monitoring, as well as more powerful web platforms, will enable producers to take greater control over its environmental impact.

Innovation is key. For example, one of the developments that really makes Encirc stand out is its ability to consolidate deliveries. This means that the truck delivery to a retail outlet or supermarket could contain products from a number of requested beverage producers. This approach to loading shortens the supply chain significantly and is particularly popular with retail partners, some of which have saved upwards of 30 loads per week. In addition, all drivers working at weekends re-route themselves via Encirc’s pallet provider to load up on stock before returning to Elton, removing the impact of an empty return leg. Working in this way saves approximately 150,000kg of carbon a year – the equivalent of 20 homes’ electricity use in one year.

Know your suppliers

Sustainable products rely on sustainable supply chains and, with as much as 70 per cent of product sustainability coming from suppliers, it’s essential that drinks producers know the credentials of the third parties they are working with.

By ensuring suppliers have similar values to their own, including ethical practises and health and safety certifications, as well as environmental procedures, producers can ensure that their wines meet the required standard, at all points in the supply chain.

While there are many factors to consider to ensure a sustainable supply chain, there are endless developments that can be made to ensure it becomes a reality. However, with even the smallest changes – such as marginally reducing the weight of a bottle – quickly adding up, it’s important that each one is taken into account.

In an increasingly global industry, those producers open to exploring the advantages that innovations in the supply chain can offer will not only be at a competitive advantage but could increase their sustainability credentials significantly.

For more information visit the Encirc website

4 May 2015 - Liam Maguire Encirc, logistics and supply chain director