When frozen meals supplier Apetito decided an all-encompassing sustainability policy was the only way forward, it led to a change in culture and mindset - not only for its own employees, but its customers and suppliers, too. Ben Walker finds out how the Catey Sustainable Business Award winner pushed through its philosophy.
The attractions of sustainability for Apetito, a company that manufactures and delivers ready meals to hospitals, local authorities and thousands of private homes, would seem obvious. Any measures that help drive down food, fuel and packaging costs for a business that serves about 30 million meals a year has got to be good news.
Yet the impetus to develop a serious and strategic approach to sustainability was not simply a question of saving money, and many of the benefits which the company is now seeing are not as tangible as cash in the bank.
"There is a positive feeling that runs across the business," says Graham Forrester, the member of Apetito's UK board with responsibility for developing its sustainability strategy.
The company's implementation of an all-encompassing sustainability policy needed to change the culture and mindset of not only its own employees, but its customers and suppliers, too. Explaining Apetito's holistic approach, Forrester says: "It is not enough just to apply water or fuel-saving measures in isolation, and equally we cannot say Apetito are doing brilliantly if others in our supply chain are not similarly engaged."
Examples of this engagement include Apetito's demand that its food suppliers meet the standards of the Ethical Trading Initiative Base Code, which requires suppliers to drive year-on-year improvements in working conditions and commit to ethical trade. Another example is how its housebound elderly customers and hospital clients are supported to help them recycle packaging from their meals.
The world was changing in 2006 when Apetito devised its 2012 Sustainability Vision. Terms such as corporate social responsibility came to the fore and Apetito's decision-making was reinforced by the attitudes of its customers. The NHS and local authorities started to write environmental requirements into their tenders.
"We did not want to just go through the motions so we worked on creating a credible plan with audited standards," says Mark Lovett, Apetito's health, safety and sustainability manager.
Apetito uses ISO 14001, an internationally recognised system that does not dictate performance standards but serves as a framework to assist organisations in developing their own environmental management systems which are then certified by a third party.
The company partnered with consultant PIRA to analyse its carbon footprint and quantify both its own direct emissions and the emissions right through its supply chain. It was then able to prioritise which areas to tackle first and to monitor progress using carbon emissions as the measure.
Apetito UK is part of a group with operations in the Netherlands, France, Canada and Germany - where the business originated and is still headquartered. "We also applied some best practice from our German colleagues such as monitoring energy usage in factory and offices," says Forrester.
But the real key to Apetito's success has been how it has communicated the sustainability agenda to its workforce - after all they are the people who have to deliver it on a daily basis.
"We've spent a hell of a lot on training. It is about winning hearts and minds and getting buy-in from the workforce, and it has been achieved by effectively cascading communication down and across the business," says Forrester.
In 2009, Apetito, which employs 1,200 people, increased its central training budget by 40% to £217,000. This was in addition to individual divisions which each have their own training budgets totaling £206,000.
One example of the worker's support of the company's sustainable policies is how the drivers of Apetito's 60 delivery trucks reacted when computers were fitted in their cabs to monitor how well they were driving. You could easily imagine this might cause dissent and resentment at being spied on, but Forrester says it has been accepted because the drivers understand its purpose - to record and eliminate incidences of poor vehicle handling, such as accelerating too fast, which consume unnecessary fuel. Such a measure, among others, has helped reduce annual diesel consumption by 13%.
One of the definitions of the word "sustainable" in the Oxford Dictionary is "Able to be maintained at a certain level or rate" and it applies well to Apetito's staff retention record.
In 2007, nearly three quarters of the workforce (73%) stayed with the company; in 2008, the figure rose to 78%; and in 2009, it increased to 84%. Although employees are less likely to change jobs during a recession, it is notable that Apetito's staff retention figure has been considerably higher than the industry average (67%) throughout the downturn.
Apart from very sound HR policies that include a works council in each business unit where management and staff can exchange information and share best practice, social engagement even extends into employees' own leisure time and nurtures a strong sense of belonging. A staff foundation provides cash for causes supported by employees such as kitting out a local childrens' football team or helping Jamie's Farm, a charity which aims to re-engage young people at risk of social exclusion. "It makes people feel good about the business," observes Forrester.
Apetito has achieved consistent year-on-year sales growth in recent years - annual turnover has increased from £75.2m in 2005 to £92.9m last year and profits have risen, too, no mean feat for a cost-sector catering supplier operating through a recession.
But, of course, it would be wrong to single out sustainability as a primary cause of profit growth. The company has other strings to its bow, including an enviable track record for innovation and new product development.
The company's new range of texture-modified foods which retain their shape after heating have proved extremely popular among customers with swallowing difficulties and added an estimated £1m to sales this year. The product won the National Association of Care Catering's Innovation Award last month and was hailed as "revolutionising the way puréed food is made and presented".
In 2005, Apetito won the Queen's Award for Enterprise in the innovation category, in large part thanks to its specially-designed Chefmobils which keep meals in optimum condition at the point of delivery, unlike traditional methods based on insulated boxes which allow meals to lose their temperature and nutritional value.
"Innovation and having the right products and the right service are all keys to our success. Sustainability is important to us, too, because we want to still be around in 20 years' time. It is now firmly embedded throughout the company, which gives us competitive advantage and makes us a better business," says Forrester.
The company's goals for the future focus around reducing emissions of greenhouse gases throughout the supply chain. Current ideas include the use of electric-biofuel delivery vehicles, innovative energy efficiency measures and ways of further reducing packaging.
CASE STUDY: RETURNABLE PLASTIC CRATES
Apetito introduced a returnable crate system to transport meals to customers. Plastic crates replaced cardboard cartons, the empty crates being returned with the next delivery. The investment in eliminating cardboard amounted to £630,000 but has seen benefits in terms of sustainability and customer service.
â- There is a saving of over one million cartons a year, about 112 tonnes of cardboard saved each year.
â- Each year, 230 tonnes of CO2 is saved.
Customer service benefits
â- Customers can order by individual tray, rather than by case. It allows them to have exactly the number of meals required. This is important when putting together an interesting and varied menu, including meals for those on special diets or special needs. Each crate can contain many different meals, whereas a case would have a number of meals of the same recipe.
â- The potential for surplus meals is significantly reduced. Sometimes this surplus can limit menu flexibility. For example, meals have to be repeated on menu more frequently than ideal, because they have to be used before the next delivery to create space in freezers.
â- Customers no longer have the problem of disposing of the cardboard boxes.
â- The trays provide better product protection so wastage due to product damage is much reduced.
DRIVING DOWN MILEAGE, WATER AND FOOD WASTE
Transport Apetito has reduced transport mileage over recent years, saving about 900 tonnes of greenhouse gas emissions a year. This has been done by introducing double-decker trailers, route planning software, lower wind-resistant trailer bodies and employing a full-time driving trainer. Additionally, it has invested £2.5m in ensuring all its trucks conform to the Euro V engine standard. The meals on wheels delivery fleet is being replaced with CitroÁ«n Nemo low-emission vans.
Water Between 2007 and 2009, Apetito reduced its water usage by 26%, representing a saving of £46,000. The manufacturing team achieved this by staff training, turning off taps, narrowing flow and investing in water-efficient equipment.
Food Waste Since mid-2009, all organic food waste has been sent to an anaerobic digestion facility in Devon where it produces about 300mW hours of grid electricity a year from the waste, and as a final resource, creates an agricultural soil improver. Additionally, Apetito sends its occasional excess short-date products to FareShare, a food charity that passes spare food to the homeless and those who need it.