Being sustainable “pays off”, apparently

It seems like a misnomer in many ways. The idea that being more sustainable pays. Of course it must, or your organisation, or winery, won't be around in 5, 10, 20 years time.

But in a narrower context, the question about how environmental and social improvement to business operations contribute to the bottom line, and over what period, is still highly salient.

This article on WineSpectator.com, published a few months ago, has a few interesting nuggets on the topic. Here's a few selected quotes and my comments.

"...a new study by a team of researchers in Italy, Spain and California claims winery owners believe sustainability makes economic sense in the long term.

"...The authors note that more wineries are adopting sustainable, organic or biodynamic techniques in their vineyards."

This certainly chimes with my own primary research, visiting 20+ winemakers per year around Europe. green_wines

"Sustainability is generally defined as using business practices that are environmentally friendly, socially equitable in terms of treating employees and community fairly, and economically viable in the long term. In the wine industry, this means that sustainable-vineyard owners attempt to create healthy soil with compost and cover crops and by reducing the use of pesticides. They also try to avoid wasting water and energy in both vineyard and cellar. What’s required varies by certification program."

This above is a very American definition of sustainability. A fair weak one really.

Note the term "environmentally friendly". Actually one has to be in equilibrium with the environment to be sustainable, not just "friendly" towards it.

The wine industry definition is also a little narrow. Sustainable drinks now means more than just the above. Packaging and its recycling, distribution and pollution, are all issues for any producer.

"Try to avoid wasting water" is also a bit lame. Actually you manage water and minimise waste and create restorative practices if you are to be sustainable. And purists will of course say sustainability is not just about reducing pesticides, but going organic, as so many vineyards are doing today.

The social reference above is also quite narrow, as modern definitions also include influence over the 'value chain' in terms of, say, how workers are treated in your supply chain by other companies whom you buy from.

"For the new study, the international team of researchers surveyed 260 winery owners in Italy, Spain and California about whether they have adopted sustainable approaches, whether they have continued such practices and whether they see business benefits. The wineries were not asked whether they were certified."

www.ovisnigra.it_This is helpful given that certification doesn't always have a lot to do with seriously attempting sustainability, either on the social or the environmental side. There are lots of problems with sustainability certification. Here's an article about a free eBook that explains them, and offers some values-based, real-time solutions.

"Results show that a comparable percentage of wineries in all three countries saw a clear business benefit in implementing sustainability strategies. Only 6 percent indicated they had tried to implement sustainable practices and abandoned the effort.

The benefits the wineries saw varied by country. For example, many of the Spanish wineries believed they profited by highlighting their sustainable efforts to consumers and improved their relationships with distributors. Being green or sustainable set them apart."

Research on whether you gain competitive advantage by being more sustainable and telling your consumers/customers about it has shown mixed results in the 15 or so years I have been reading it.

It's very hard for big brands to influence consumers or to convince them to buy ethically or sustainably, and consumers certainly won't pay a price premium en masse.

But wine has more chance than most sectors of using sustainability for competitive advantage, given that some consumers have a more personal relationship with it than they do say, shampoo. But the jury is still out. Note use of the word "believe" rather than "prove", above.

"In Italy and California, however, winery owners found that adopting sustainable strategies actually allowed them to focus on cost reduction. They reported reducing waste and improving operational efficiencies. The authors noted at the conference that many surveyed wineries also believed that their wine tasted better, which was reason enough for them."

This is something one sees across many areas of business. The first business case is created by not wasting resources, and it's amazing how many we do waste.

Does sustainable wine taste better? I doubt one could host a tasting that distinguished, given the challenges. But we'd like to think so. Does it improve quality, which is not the same thing as taste? Luisa Rocca of Bruno Rocca has some views on this, and on certification in general, that you might find interesting.

"All of the wineries surveyed were small- or medium-size businesses, and many were family-owned, a fact linked to another common reason winery owners gave for going sustainable: They believe in preserving the environment—and their businesses—for future generations."

This is something I've heard time and again. It makes perfect sense. Here's a great example of this attitude "in action", from Alan Manley at Bartolo Mascarello in Barolo.

But larger wine companies too, get sustainability. Just how much depends on where they are. Witness the shift, in rhetoric at least, in California in recent times, particularly Sonoma.

Partly this may be due to existing environmental pressures around water resources. But clearly in wineries large and small, sustainable thinking is taking hold.

I'll be debating all the key areas of sustainability with some leading drinks companies at a conference I have created in London on March 15th. Here are the details and I hope you can join us!

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