As more businesses look to cut costs while improving sustainability, the
circular economy concept is picking up steam. Consumers want the businesses they
patronize to do good for society and practice conscious capitalism. Businesses
want to reduce their dependency on virgin raw materials, in particular those
that are non-renewable; and are increasingly turning to recycled and returnable
goods — to positively impact the environment while keeping their supply chain
moving.
A circular economy is a great idea in theory. But, what does it look like in
practice?
To paint a clearer picture, CHEP —
known for its trademark blue pallets — launched the Zero Waste World
program,
collaborating with companies to eliminate waste, eradicate empty transport miles
and cut out inefficiencies. Zero Waste World is a natural extension of CHEP’s
sustainability goals to achieve a better business, a better planet and better
communities. While the program launched last
year,
CHEP had partnered with several businesses that have lived and breathed circular
principles long before that.
Case in point: Ice River Springs — a
private-label bottled water producer with operations in Canada and the
US. The company’s sustainability philosophy is based on the three Ps:
people, planet and profit; while consciously ensuring a purpose beyond profit.
Water isn’t its only renewable resource — the business sells its water in
bottles made of 100 percent recyclable material; even its caps are recyclable.
Between 2010 and 2020, the switch to 100 percent recycled PET bottles has
reduced energy consumption and greenhouse gas emissions by 78 percent. And by
using CHEP pooled (shared and reusable) 48x40-inch block pallets, Ice River
Springs has achieved environmental savings over the last nine years of more than
1,550,000 pounds of CO2. That’s equivalent to the greenhouse gas emissions from
70 trips around the world by an average passenger vehicle.
As CHEP and Ice River Springs have worked together in pursuit of a stronger
circular economy, we’ve learned a number of lessons. We want to share a few with
you, in hopes that they’ll spark inspiration for your own operations.
Lesson 1: Source locally and sustainably
Ice River Springs determined its best path toward sustainability was to produce
recycled polyethylene terephthalate (rPET) bottles — but to build a closed-loop
production process, it needed to break down the material in-house. In 2010, the
bottler invested in vertical integration by opening its own plant, Blue
Mountain Plastics (BMP Recycling), and purchasing waste PET from Ontario’s
curbside recycling program. Today, Blue Mountain purchases approximately 80
percent of the PET collected by the program.
In addition, CHEP’s unique capacity and wide network across Canada and the US
means Ice River Springs has quicker access to pallets — both for delivering
product to stores and for moving goods around its production and distribution
facilities. CHEP is able to provide pallets from among its more than 530 service
centers in North America in order to satisfy customer needs.
Although sourcing locally has paid dividends for Ice River Springs over the last
decade, it’s also been especially critical to the company’s operations as it
works through the COVID-19
crisis. Ice River
Springs was able to continue sourcing recycled materials and produce bottles
without facing potential breaks in its supply chain — a possibility if suppliers
outside of Ontario, or even Canada, were unable to provide PET.
CHEP’s circular business model is underpinned by sustainable sourcing of
renewable and recyclable materials. By purchasing 100 percent certified wood,
CHEP is reinvesting in natural capital — supporting the sustained regeneration
of forests and providing the business with a reliable source of raw materials.
Lesson 2: Share and reuse
Peaks and valleys are inherent in our current, linear economy. Although you can
be fairly certain you’ll have the raw materials you need to produce your goods,
you’re vulnerable to supplier disruption. And without careful planning, you
could be stuck with too much or too little of your critical materials.
By utilizing a circular model instead, both CHEP and Ice River Springs
significantly extend the life of their assets, either by reusing or recycling.
Ice River Springs combats waste by ensuring it has a home for the non-PET
materials it collects at Blue Mountain. As part of its closed loop, it sends the
high-density polyethylene (HDPE) it recovers through the recycling process to
C.R. Plastic Products — a member of the Ice River Springs family of
companies — to produce items such as high-quality outdoor furniture. Leave the
cap on your beverage bottle when you recycle to ensure that the cap makes it to
the recycling facility!
CHEP’s circular business model is based on “share and reuse,” called pooling.
With the CHEP pooling system, customers get the pallets they need from CHEP on a
rental basis, and pallets are regularly inspected and repaired to ensure longer
life. CHEP manages retrieval and quality assurance of the pallets in a
closed-loop system, allowing customers to focus on their core business. Over the
last nine years, Ice River Springs has used more than 3,600,000 CHEP 48x40-inch
block pallets throughout its supply chain.
CHEP aims to achieve zero product waste. At end-of-life, CHEP products are
repurposed in the materials economy, avoiding landfill. The waste wood is used
to produce particle board for use in furniture, mulch, animal bedding, fuels,
etc. This demonstrates a best practice commitment to circular principles.
Lesson 3: Make sustainability a core tenet
In many companies, there is often a debate over whether sustainability and
profitability go hand in hand. They can’t see how zero-waste initiatives lead to
profitability.
Ice River Springs’ success proves that line of thinking wrong. Sustainability
has become a calling card for the business, with its green water bottles
becoming a symbol of eco-friendly bottling practices. The company is built
around a sustainable framework, rather than trying to fit it in as an
afterthought — all the way down to the LED lighting it uses in its facilities.
Sustainability is an inherent part of every role across the company. And as
other bottlers face increasing landfill fees, that’s a budget item Ice River
Springs keeps at $0.
CHEP creates better supply chains by helping customers deliver life’s
essentials, sustainably. It operates an inherently sustainable
business,
simpler and less wasteful. The company is on a mission to help customers build
smarter, more sustainable supply chains through the Zero Waste World program —
which has also provided CHEP an opportunity to encourage sustainability among
its customers and employees. Participants are asked to come together regularly
and share their ideas for reducing waste across the global supply chain.
Sustainability is a goal we can only reach when we live it, especially in our
partnerships and collaborations.
Reducing waste — one bottle (and pallet) at a time
Building a circular economy is no small feat — it takes time and careful
consideration of how each material can be reused. Still, there’s no question
that the benefits to both the consumer and the business outweigh the challenge.
If you’d like to join CHEP and Ice River Springs in building a Zero Waste World,
we’d love to have you. You can learn more about the initiative and begin
collaborating with us
here.
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Senior Manager and Program Lead, Zero Waste World, North America
Jonathan North joined CHEP in 2019 as the Senior Manager and Program Lead for the Zero Waste World program in North America. In this position, Jonathan leverages his supply chain and sustainability expertise to further the Zero Waste World initiative to reduce waste, eradicate empty transport miles and cut out inefficiencies.
Crystal Howe, daughter of company founders Sandy and Jamie Gott, is the head of sustainability for the Ice River family of companies. With a background in organic farming and a passion for business with a purpose, Crystal drives sustainability best practices within the organization, the community and with its supplier and customer partners. She has championed many initiatives in the areas of zero waste to landfill, energy reduction and manufacturing efficiencies to minimize the environmental impact and maximize the effectiveness of the business. Crystal also collaborates with various government and non-government groups to promote positive action for the health of our planet.
Published Aug 11, 2020 8am EDT / 5am PDT / 1pm BST / 2pm CEST