Sustainability & Circular Economy – Drinks Industry

Expert Profile

Section 1: Current Strategy

1.1. How important is sustainability in your business?

It’s extremely important for Innocent. It is a feature of how they wanted to do business from day one. It took them a few years to get a bit more sophisticated about what sustainability literally meant day to day. To overcome this, they introducing a solid sustainability strategy to guide them. Throughout company history, it’s been a large commitment culminating in 2018 by becoming a certified B corporation which really validated all the work that had gone on prior to that point.

To qualify as a B Corp, Innocent didn’t actually have to make any changes as they were already doing enough to certify, which is amazing seeing as a lot of businesses have to make quite a few changes before they get across the line. Since 2018, Innocent is continuing to improve and get more points and keep building their B-Corp score.

The B Corp movement is quite significant in that you change the article’s association of your business, you make it legally enshrined in your ‘business DNA’ that you are committed to working for stakeholders, which are people and planet and your customers. As well as working in the interest of creating profit for your own business.

There’s been a few iterations of how Innocent has defined sustainability. The main one that we kept coming back to is – ‘leaving things better than we find them.’ It is Innocent’s take on being net positive.

One of the big projects that started in 2009 was to map our water footprint to understand where there were areas of stress. We began mapping our carbon footprint and making reductions. We realized that our strawberries that we sourced from Spain were grown in a region where water usage was a real issue. We had the choice to stop buying those and buy strawberries that were sourced in a less water stressed way; or do we stick around and actually try and help make that water basin, and the entire growing region operate better. It obviously takes a lot of resource and some investment, but that’s what we chose to do.

It became an award-winning project that finished last year, and it ran for 11 years. It started off as an Innocent project to improve water efficiency on the farms, but it radiated out something much bigger. We ended up handing over responsibility to a bigger working group. Our aim from the get-go was to collaborate, to achieve more.

1.2. What are your current sustainability priorities/targets?

There are three main focal areas to this sort of current sustainability strategy. The first one is, the ambition to be climate changers, which is a dedicated work stream around climate change. Headed up with the goal to be net zero carbon by 2030, like many other B corporations. There’s a very active work stream to see how far we can pull that forward, there’s a really strong ambition to achieve it before 2030. Everything around carbon reduction is probably our biggest priority.

Second point is becoming farming champions, which means working with our whole value chain and focusing on regenerative agriculture. Within that there is a commitment to 100% responsibly & sustainably sourced ingredients and that should be a goal that Innocent reaches within the next year.

There is so much work that still needs to go on within agriculture. Two big focus streams are around improving biodiversity and nurturing farmer livelihoods. There’s been a big recognition in recent years that if you don’t invest in the people, how can they be expected to invest in the planet? It has got to be the total package.

The third big focal point on sustainability for Innocent is becoming recycling activists. This really links to the concept of a circular economy. It’s an ambition to make sure that Innocent is a part of the solution. It involves a variety of commitments around making sure every single bottle is collected and recycled. Increasing the recycled content and renewable content of our bottles. Innocent smoothie bottles are unique in the market as they contain plant-based plastic and recycled plastic and are fully recyclable.

1.2.1. How are these priorities being measured/monitored?

We have four work streams for monitoring. One, is committing to communicating with and educating our consumers. If you look at the picture of the circular economy, the key is that every single part of the chain has to do their part and work together. We have a big emphasis on talking to our consumers about recycling and motivating them to want to recycle, to bring them into the solution.

Second is recovery rates. We are working with a combination of public pacts, like the UK Plastics Pact which is a really important voluntary commitment that Innocent joined at the very start. It is focused on how we can increase the infrastructure and improve the infrastructure to ensure more bottles are collected. Once we’ve motivated our consumers to put them in the recycling bin, they still need collecting and recycling. That picture includes input into a great deposit return scheme (DRS) for plastic bottles.

The third work stream is measuring how much plastic is in each pack and where we can make reductions where we make sure we’re only using the amount of plastic that’s required.

Fourthly is making sure that our bottles are fully designed for recyclability. We set really high standards for this, to make sure every single bottle is a hundred percent recyclable, right through every single component right down to the glue that’s used on the labels.

1.3. Who are the key internal stakeholders to engage with?

Internally there are two really big ones. One is the supply chain operation. We are working with them and the packaging technologists to make sure that sustainability goals are fully embedded. We’ve been building that into the way we do business for so many years that their goals absolutely align with sustainability goals. We are bringing them the latest insights and connections in the industry to make sure that they can keep bringing the best possible practice to the way they design our packs.

Another stakeholder is the marketing function because at Innocent we have such a great opportunity to use the brand voice and space on the labels to talk about recycling and really raise awareness so that more consumers recycle. Keeping that team engaged has been really critical.

The third group I would say is the entire employee base, no one joins Innocent without having some conscience around sustainability. Everyone to some extent is a stakeholder in sustainability. When everything has come to light around the issues with plastic, it’s been a really interesting journey explaining to them that there are some serious issues with plastic, everyone who uses plastic needs to use the minimum amount they need to. But then it’s about recognizing that the problem with plastic is where it’s ending up. If we can build a circular economy that ensures that those bottles are valued and then properly recycled and reused, then that’s where plastic is the right thing for a lot of different formats.

The biggest issue that faces our planet is climate change. Plastic offers a really low carbon solution, and for a company like Innocent drinks, possibly the lowest carbon way of conveying their drinks. It’s been a really interesting challenge in engaging everybody.

Externally, there are two big groups, one is consumers, and the other is this cross-functional working dialogue that’s been really by the UK Plastics Pact. Which is run by a charity called Wrap. Unless you get everybody at the table, you’ve got the risk of building a ‘crescent shaped economy.’ But it isn’t a circle unless you everybody is brought into it and the interdependencies are huge.

1.4. What are your current sustainability initiatives?

One initiative that I loved was working in the Borough of Kensington and Chelsea in London where the Innocent offices are. It is a very diverse Borough in terms of the population, the businesses there, and a mixture of residential buildings. We did a piece of work with a fantastic agency called Hubbub to understand what the barriers to recycling were across the Borough. And then set about a set of interventions the Innocent could support on or fund or, brand whatever to improve recycling rates in the borough.

There was a load of great feedback through all of the social media posts that we put out about it. The data will come through probably within the next month actually to see whether we demonstrably did improve recycling rates in that Borough, through the intervention. So, what we did was put advertising over the sides of rubbish bins, the recycling collection trucks in the area, and laid out really clearly what could be collected and put in your recycling bin.

The point was it was taking the Innocent tone of voice and adding a bit of humor. Trying to make it more interesting and engaging for people. And what we’ve really learnt is that it landed well, through some of the label designs that we’d put out on our bottles for the previous two years. We realized that recycling is a pretty boring topic and if you can make it remotely interesting or fun or engaging, you can actually get really great response from people. So that was the crux of it. It was working out literally what was wrong with a very measurable goal at the end of moving up the recycling rates in the area and trying to achieve that using brand tone of voice and making it light and engaging.

Section 2: Future Strategy & Challenges

2.1. What changes will be made to the operational model to further sustainability?

The really huge change for Innocent is finally building their own factory. For 21 years, Innocent has used an outsourced supply chain, as many food and drinks manufacturers do. We have invested into them in terms of sustainability which requires building great relationships with those third-party suppliers and working with them on improving their sustainability, supporting them, and guiding them on that journey wherever we needed to.

We are midway through building and now probably getting close to testing the lines of an Innocent owned factory. The goal of the factory is to develop the most sustainable, soft drinks manufacturing facility. So, all the time they’re getting a benchmarked picture of what is actually going to go in and how it compares to what else is going on out there. It’ll be zero carbon generating energy on site, really strong commitment to employee wellbeing.

I think it’s the first factory that’s applying for the ‘Well Certification’ and Well is something that’s historically been aimed at offices. And making sure office workers have, good clean air, view of nature but the factory is aiming to achieve that as well. So, everyone that works in that factory feels valued and has a great working environment.

That factory won’t manufacture absolutely everything for Innocent, but it will do a lot. So that is going to be a massive shift. And over the next year or two, as everything migrates over there, we’ll see a huge chunk come out of the carbon footprint. So that’s the biggest thing happening right here right now.

There has been quite a bit of activity from third parties engaging with sustainability. From my experience, it’s building those great relationships, investing in those relationships with your suppliers, I’d urge any brand to take that step because it absolutely pays back. A brand could easily feel like that it’s not their direct operation that you can’t influence it, that is a hundred percent not true. Something that has massively shifted in the last couple of years is that consumers are demanding sustainability. So, there’s just nowhere left to go and we know that pretty much every brand is going to start demanding it because their consumers are.

There are self-motivated changes from third parties, it varies. I think the thing that Innocent has always strived to do is work with suppliers that have a shared outlook. So, it’s not that we’ve ever undertaken work with someone who we had to literally transform them completely in terms of sustainability. That’s just not the starting point. We wouldn’t engage with anyone that does not engage with sustainability. And I would urge no other brand to do so either.

You need to start that relationship knowing that the will to improve sustainability is there. And yes, our experiences with a lot of those people, they already had some of the measures in place. What Innocent was able to provide was the impetus to make sure that those metrics were scrutinized at every level of their organization, not just by the health safety and environment manager, but actually right up to board level, insisting that it was in our board level meetings, these are just some of these simple steps that you can take to bring sustainability up on the agenda.

2.2. How will technology such as IoT, AI/ML, product innovation help move towards a circular economy model?

This is a really interesting area as food and drinks is probably going to be one of the later sectors to adopt some of this rigor. The practicalities and costs involved of getting the kind of level of tracking that you’d need onto a bottle that’s worth £1.50 which inevitably gets drunk and simply put in a recycling bin. However, it’s not that it’s not being explored. There could be some amazing ways of tracing a bottle and guaranteeing that it goes all the way around by having some kind of monitoring device on it. But to my understanding some of the movement in this space is much further along in other sectors. There is a massive opportunity without a shadow of a doubt. Because I think that was one of the issues that exists in a lot of these circular economies is traceability.

And then the lack of trust that comes from that. So, if you can’t demonstrate that some of these things are genuinely staying in the loop, then people further down the line will ask, ‘what’s the point of me putting it in the recycling bin?’. If you can start to actually prove it’s happening and that these systems work, I think it will boost uptake. So, without a doubt, the opportunity is there.

From a product innovation viewpoint and Innocent’s packaging channel, there have been developments. So, it is part of a deep dive into the fourth pillar of our recycling activist strategy. I think historically it would be easy to stop progressing as we have PET bottles and HTP caps, they’re both recyclable so ‘end of story.’ As soon as you get under the surface and realize how differently some of these recycling processes operate and that for some of them, they can deal with any label in any glue, but some of them, they really absolutely can’t, as such, you could be at risk of contaminating a recycling batch. If you’ve not done that due diligence and understood what glues you’re using, what labels you’re using and how they get removed during the process and for a company like Innocent, the clarity of the resin that comes out the other end is of paramount importance.

If we don’t have as clear a grade plastic as possible, it really, it has a real impact on the product. It’s not stopped Innocent buying recycled plastic, which obviously costs more than virgin plastic and it looks worse than virgin plastic, but it doesn’t stop them buying it. But wouldn’t it be great if we could get that clarity as best as possible and by making sure all those are the components and the labels, and the inks are all off that bottle before it goes around the chain. That’s how you guarantee the great quality plastic. That commitment to making sure every single component of our packaging is a hundred percent recyclable is a work stream that we’ve invested in more than ever in the last couple of years, as we’ve understood those impacts more. And I’d urge as many brands as possible to take that step as well.

2.3. What would be the impact of achieving sustainability targets?

I think all of those three main areas, climate change, sustainable agriculture, and recyclable and sustainable packaging those are going to roll on. These issues are global issues and they are issues that require collaboration at the highest level, there’s no shortage of work and there’s no point on the near horizon where it’s all done. Because even for instance, just say Innocent gets to net zero soon there is always going to be more carbon that can be taken out. There is always going to be more that the brand can do to raise awareness of lower carbon living. Ultimately there’s got to be some part of that footprint that’s being offset, which means there’s still more to do to get down to that absolute zero. That work stream won’t fall away until we’re in a situation that carbon dioxide levels are coming down in the atmosphere.

In agriculture, the issues are so widespread and they’re global. For us, for a company like Innocent, whose fruit comes from all over the world, it’s a global supply chain. The best results that we’ve seen have been the real grassroots work. Where someone from Innocent, someone from a partner NGO are down on the ground with the farmer, working through the challenges. Innocent sources from thousands upon thousands of farms. To replicate that level of success across an entire supply chain. And that’s just one company. It’s a really big ongoing piece of work.

The ambition is that our work does trigger those bigger conversations that lead to shifts at a political level and then that’s where you can really start to see these things move a lot more quickly, but business can move a lot more quickly and nimbly than the political system. That’s why it’s so important that businesses keep plugging on, it’s why the B Corp movement is so incredibly important. They’ve got to keep cracking on until it’s time to hand it to the people or the layer above.

The strawberry project that I mentioned earlier led to a 40% reduction in water use and a 25% increase in the yields that were coming off those farms. It was a complete win-win all around. That figure varied over the cycle of the project but when it really hit its peak, which is around the time we then handed over to a bigger working group. That brought the opportunity to then roll that out across all growers, across the region and not just in strawberries.

We were working with the mango farmers that we source from in India. They were starting to see the impact of climate change on the monsoon. The monsoon timing started to shift, and the flowering cycle of the mango trees is a totally dependent on the monsoon timings. The reality was those farmers had to adapt to climate change and they had to do it quite quickly.

We worked with a local university and developed a five-point plan as to how those farmers could adapt to climate change. It also involved a step away from dependence on agrochemicals, again, leading to a 10% yield increase. The main thing was to stop their reduction in yield and get them back to where they were. We saw this project become absorbed by that community and Innocent didn’t have to lead it anymore.

2.4. What are the key challenges for developing a circular economy?

It’s managing the interdependencies, ensuring that everyone’s committed to the total goal and that they all work together to do that. I think that what has happened, to use the example of soft drinks packaging in the UK and Europe, is that the circular economy wasn’t there because the right communication channels weren’t in place neither was the trust and structure to keep everyone working together. For me, the exciting development was the instigation.

First of all, the Ellen MacArthur foundation started a fantastic movement to identify this precise challenge. I mean, the whole purpose of that charity is building circular economies across a variety of sectors. They did an amazing job of just highlighting some of those challenges. What they needed was practical action to actually overcome them by joining forces with Wrap in the UK. But there are other plastics pacts in other countries as well across the world, in fact. In the UK, by having a convening party who everyone in the circle trusted and listened to, you can then start to broker those conversations and move forward.

It’s not possible for a brand or manufacturer like a PepsiCo to own the entire circular economy. One of the really important parts of circular economy is the end user, especially in FMCG. I just can’t see a world where branded products are going to start driving refuse trucks. I think that’s one of the other challenges; the breadth of inputs in that circular economy. The difference between a consumer, a brand in some nice head office somewhere, someone driving a rubbish truck, someone running a processor, someone who’s got to take the incredible investment to build a line that will convert waste plastic bottles into viable new pellets. That is one of the biggest pinch points because that’s a big investment. Until they know that people definitely buy those pellets, they don’t make that investment.