Rising to the challenge
Few sectors anticipated summer 2022 as eagerly as those in the food and drink industry. Just one year ago, shops, restaurants, bars and cafés across Scotland were contending with social distancing regulations, historically low levels of tourism, labour shortages and severe disruption to supply chains.
Though macroeconomic challenges remain acute, the landscape this year has been more favourable. Many Covid-19 protective measures have been reduced or removed – most notably those relating to travel and social distancing – and business owners have been able to welcome a growing number of workers and customers once again.
“The resilience and adaptability of everyone working in the food and drink industry over the past two years has been incredible,” says Jim Fox, head of public affairs for Coca-Cola Europacific Partners (CCEP) GB, as he sits down to speak to Holyrood. “It’s been a remarkable effort by everyone concerned. Factories stayed open, shops acted quickly to protect customers, pubs and restaurants created outside spaces that simply weren’t there before and home deliveries supported those who were urged to shield. These businesses have been a lifeline to many.”
Community spirit and business partnerships have come to the fore throughout the global pandemic. CCEP views this as one of the positive developments to have emerged from the past two years and was eager to play its role, in part by contributing to the National Federation of Retail Newsagents’ (NFRN) Covid-19 hardship fund.
One notable high-street hero in NFRN’s ranks is Londis Solo Convenience in Glasgow, which partnered with local pub The Baillie and coffee shop CocoChinos to create care packages for the elderly in self-isolation. Elsewhere, Premier Broadway Convenience Store in Edinburgh launched a coronavirus hardship fund with £1,000 of its own cash and proceeded to raise more than £10,000 to help locals pay for food and bills. These are the types of story Fox is keen to celebrate.
“We have a team that visits small family businesses that make up the NFRN’s membership regularly to check on sales and promotions,” says Fox. “But the team went well beyond that during the pandemic, making sure everybody was alright, passing on best practice from one store to another and helping them navigate what was going on. They were taking all the necessary precautions, but it was a wonderful community effort at a time of high risk.”
That spirit of partnership and support is evident elsewhere in Coca-Cola’s wider group objectives. The business sees continuing opportunities for partnerships with small businesses and communities. In 2021 it helped fund the Upstream Battle campaign launched by Keep Scotland Beautiful to tackle marine litter at source in the River Clyde and River Tay.
Likewise, CCEP is embracing partnerships throughout its supply chain and customer base as part of its commitment to sustainability. The group shared platforms with the UK Government, Scottish Government and non-governmental organisations at COP26 to discuss the progress it has made. Coca-Cola argues the Glasgow conference has been invaluable in heightening the sense of urgency and accelerating the adoption of sustainability practices required by industry. This in turn strengthens the argument in favour of partnerships, says Fox.
“COP26 was the ideal environment to listen to best practice from other groups and businesses, have a refresher on what it is we need to do, and consider once again whether we are going far enough and fast enough,” he explains. “We began the conference with our announcement that Coca-Cola’s target is to get to net zero by 2040 and make a 30 per cent reduction in our greenhouse gas emissions by 2030.
“That is over and above the 47 per cent reduction to our carbon footprint that we have already made since 2010. We’re up there with the fastest moving companies of our scale. Reinforcing that, we are supporting 150 of our suppliers to help them set their own science-based net zero targets by 2023, so there’s a huge amount of work and a great deal of collaboration underway.”
One such partnership has already produced results, with the group’s longest serving road haulier MJD Group announcing in February that its entire fleet was moving to hydrotreated vegetable oil biofuel known as GD+ with immediate effect. MJD says the move will cut carbon dioxide equivalent emissions by 17,000 metric tonnes per year. CCEP is also partnering with other existing suppliers to increase the volume of product that is transported by rail, reducing dependency on diesel-powered road haulage.
Across the wider food and drinks industry, Coca-Cola has helped to launch the Net Zero Pubs, Bars and Restaurants initiative© alongside sector-based climate initiative Net Zero Now and Pernod Ricard UK. The campaign is a four-step programme that begins with supporting businesses with calculating greenhouse gas emissions and developing a plan to help reduce them. Operators are then provided consultation on credible ways to compensate for emissions that cannot be removed, before being certified as a ‘Net Zero Pub’, ‘Net Zero Bar’ or ‘Net Zero Restaurant’.
On an in-house basis, CCEP continues to invest heavily to meet its sustainability targets. As part of its €250m UK-wide Science Based Targets investment programme, the company’s East Kilbride site will receive funding from an £11m investment in Great Britain into its fleet of material handling equipment. This will see all vehicles, including gas-powered forklift trucks, replaced with alternatives powered by lithium-ion batteries, which produce no carbon emissions in their day-to-day use.
The East Kilbride operation is also the company’s first national site to manufacture bottles with attached caps as part of a commitment that will see all UK production sites making the switch by the end of 2024. “Attached caps are becoming more prevalent across Europe, and the EU want to try to make that mandatory,” explains Fox. “While there are currently no such rules proposed in the UK, we have jumped ahead of the curve voluntarily and our East Kilbride site is pioneering in that regard.” Coca-Cola says it is the first major UK soft drinks supplier to fully switch to attached caps, which is intended to ensure that as much of its plastic is recycled as possible.
To this end, CCEP is also working on the introduction of deposit return schemes (DRS) across the UK. In Scotland this sees it partnering with Circularity Scotland towards a targeted launch in August 2023 and highlights the transformative potential for environmental policy when government and industry work together.
“We have invested £32m into our East Kilbride site since 2017,” says Fox, “and most of that has gone into improving our carbon footprint, ensuring the way we pack and store products is more carbon-efficient. We’re constantly working with industry partners on further innovations in sustainable packaging, exploring new avenues such as refillables, the introduction of lighter-weight bottles, and of course deposit return schemes.
“But East Kilbride is part of a wider UK network. If we are improving the forklift trucks at East Kilbride, we will be transitioning to solar energy elsewhere and improving water extraction somewhere else.”
Despite significant positive developments in crucial areas, Coca-Cola and the wider food and drink industry continue to face serious external headwinds, in particular owing to geopolitical developments and the fallout from the global pandemic. As Fox highlights, labour shortages and increased costs in haulage, packaging, ingredients and utilities have all heavily impacted the food and drink production industry.
“Like all businesses and households, our sector is facing the same inflationary pressures as everyone else,” says Fox. “We’re trying to hold that back as much as possible by making efficiency and effectiveness changes. But there is no doubt that costs are increasing. Labour shortages are becoming increasingly extreme, particularly in haulage.
“The challenges are even more evident in summer, when demand for soft drinks and ice cream goes through the roof. You suddenly have to deliver an additional 20-30 per cent of products into the market. If you were struggling to find drivers beforehand, you will definitely be struggling for them now. That is also a driving force behind our move to rail transportation, where you are helping to alleviate pressures brought about by labour shortages, in addition to having a positive impact on our carbon footprint.”
Many of the pressures surrounding labour shortages have had the most significant impact on CCEP’s partners rather than the group itself, Fox explains. Internally, the business has been somewhat shielded due to the high-skilled nature of its workforce. Furthermore, the company is confident its apprenticeship scheme and outreach work in schools and colleges will attract more people into the industry while improving gender and ethnic diversity ratios.
The group’s East Kilbride site has been offering apprenticeships for more than 20 years and Coca-Cola is keen to highlight that all of its apprentices in East Kilbride have secured full-time roles. The business has also made significant strides in closing diversity gaps across the business, with 40 per cent of apprentices being female and 14 per cent being of black or Asian heritage. Additionally, 80 per cent of employees on its career builder programme have not formally studied since leaving compulsory education.
“We’re excited about what the future will bring,” says Fox. “One of the benefits of being part of such a big organisation is that we can test and learn from developments in other markets. We can act as a catalyst to bring together insights, resources and expertise from across the industry.”
This article is sponsored by Coca-Cola Europacific Partners. This article appears in Holyrood’s Annual Review 2021/22.