Brands go green in UK

24 February 2011

LONDON: Major brand owners including Kingfisher Group, Marks & Spencer and PepsiCo are deriving tangible benefits from enhancing their green credentials in the UK.

Kingfisher Group, parent of DIY chains B&Q, Castorama, Brico Dépôt, Screwfix and Koçtaş, believes this segment should prove a key future growth area.

"Currently, 10% of our turnover is green products, anything from insulation to sophisticated items like solar cells. I expect that to be 30% in ten years," Ian Cheshire, Kingfisher's chief executive, told the Daily Telegraph.

In a bid to stimulate this process, the company is pursuing several initiatives to assist customers interested in eco-friendly options.

"We are now planning to offer an eco-squad, for example, experts who will assess your home and suggest ways of making it more energy efficient and environmentally friendly," added Cheshire.

High-street retailer Marks & Spencer was a comparative early-adopter having created the Plan A scheme four years ago, setting out 100 commitments from utilising more recycled material to officially ranking its suppliers.

Alongside yielding £50m in annual savings through encouraging heightened efficiency, this effort has delivered a number of additional advantages.

"We are now a trusted environmental brand and we are asking ourselves what we can do with the consumer," said Mike Barry, the organisation's head of sustainable business.

"These are early days but there are some incredible opportunities for us in terms of new income streams.

"We are looking at energy, which is a £40bn market in the UK. M&S Energy is now selling energy services and even renewable energy. We are also looking at the fact that consumers are going to have to green their homes."

In an indication as to how such moves may influence various sectors, rivalries seem to be emerging between companies across a range of categories.

"There's already a surprising degree of competition from the likes of Waitrose and Sainsbury's and from big beasts like Pepsico and Unilever," Barry argued.

"There's also a degree of market positioning going on in terms of new partnerships with innovative green providers. If we don't team up with them, competitors will snap them up."

Indeed, Unilever, the FMCG specialist, intends substantially to reduce its environmental impact.

"We looked at the lifecycle of 1,500 products in 14 countries and it told us some surprising things," Gavin Neath, Unilever's svp, sustainability, said.

"What really stood out was the huge impact our products had in the consumer-use phase. They used a lot of energy and water, so we developed new detergents, for example, that washed clothes at lower temperatures or used less water."

Elsewhere, food and beverage manufacturer PepsiCo allied with the Carbon Trust, a not-for-profit body established by the government to advise private sector players about sustainability.

As part of this arrangement, PepsiCo attempted to determine the carbon footprint attributable to its Walkers Crisp brand, adding the information gained to packaging.

"We discovered 60% of the carbon footprint of our products is embedded before raw materials reach our factory," Walter Todd, vice president, operations, for PepsiCo UK & Ireland.

"It turned out to be a great way to identify opportunities and to drive productivity and innovation in our business."

As well as cutting energy use by 7%, PepsiCo has slashed the waste it sends to landfill to zero, saving £500,000 a year.

"Consumers expect companies to be seen as responsible. It's also the source of a huge sense of pride," said Todd.

Data sourced from Daily Telegraph; additional content by Warc staff