sustainability and profitability

Embracing Sustainability Leads to Profitability

More companies are embracing sustainability these days and discovering that not only does it improve brand reputation, but leads to profitability benefits as well. These businesses are discovering that sustainability is a great way to save money, but also to generate new revenues.

In the food and beverage industry, sustainability extends into packaging lifecycle management, raw material sourcing, health and nutrition and production. Many food and beverage manufacturers are offering more organic products, either through acquisitions or new product introductions. In fact, according to Food Manufacturing magazine, “Organic packaged and prepared foods saw double-digit sales growth from 2005 to 2014 as compared to just 3% growth for the overall food industry. Organic food sales are expected to increase by 14% each year from 2013 to 2018, which demonstrates a clear growth opportunity for processed foods companies.”

Manufacturers can charge more for organic foods and consumers will pay it because they perceive the products to be better for them health-wise. Millennials in particular have embraced organic labels because many of them strive for positive change in the environment. Most recently, several companies – including McDonald’s – announced they would be using cage-free eggs in their products, proving the growing acceptance of sustainability in their businesses.

Packaging has become an area of sustainability growth, with many manufacturers recycling shipping and packaging materials or using less or alternative materials in their packaging operations. In fact, PepsiCo announced that it has eliminated 89 million pounds of food and beverage packaging in 2014, amounting to a savings of $48 million.

As transportation is one of the highest expenses for a manufacturer, the focus has been on shipping fuller trucks, instead of partial loads. This requires robust transportation management technology to coordinate pick-ups and loads, optimize routes and eliminate empty or less-full loads. By improving transportation operation efficiencies, companies can reduce volatility issues, such as a sudden spike in fuel costs. It also decreases the adverse impacts associated with these costs.

Working with a 3PL that has an eco-friendly mindset can help companies improve their sustainability efforts. As one of three finalists in the 2015 Logistics Quarterly Best 3PL Supply Chain Sustainability Performer Awards, Transportation Insight provides a win-win solution for clients who want to create strategies to benefit the environment, while lowering costs, reducing risk and optimizing supply chain processes. With robust transportation technologies that provide visibility from end-to-end and resources to support packaging improvement initiatives, clients that work with Transportation Insight can address areas within their business that lead to sustainability efforts and increase bottom line profits.