John Cunningham: Consumers are going greener and business has to adapt to survive
Running a consumer business in the current climate poses many challenges – societal, economic, environmental. The issues facing businesses years ago may be different to those we’re up against today, but that doesn’t mean the weight of those issues are felt any less by business owners now and then.
Twenty years ago, there was a more diverse consumer marketplace and environmental issues weren’t regarded as a consideration for many businesses.
Now the nation’s consumer market is led by the four big supermarkets making it extremely competitive across almost every category. As an established business, Border Biscuits is able to meet the demands of big retailers but it’s easy to see why new businesses struggle to even get their foot in the door.
For the first years of any business’ life, the main objective is to survive and, if you’re fortunate, achieve a reasonable level of profit. Once you reach the milestone of stability, you’re able to turn your attention to diversifying your product offering and overall business growth.
Technology has had a huge and, in most cases, positive impact on manufacturing across the board – businesses are now able to produce higher levels of any product while maintaining quality.
Consumers in today’s world have higher standards and more options. Product quality and price is a big driving factor in purchases – people want better and more for their money.
Willingness to change and ability to adapt are characteristics that businesses have to adopt in order to survive. A recent report indicated that half of consumers are now snacking on the go more than ever. We were able to recognise a shift in consumer behaviour and respond with considerable capital investment, allowing for a wider scope for future product innovation.
For us, the £1.5million investment in our Lanark-based factory to support the launch of the chocolate biscuit bar version of our best-selling Dark Chocolate Ginger was a win-win move – rewarding our existing, loyal customer base while creating the potential to attract new customers to the brand at the same time.
Being profitable is of course a core objective of any business, however, it’s not our only bottom line.
Operating as a business today carries a responsibility to consider the wider impact on our employees and the environment. Being privately-owned has allowed us to set our own journey, without having the same pressure of external stakeholder demands when we want to implement new processes or changes. Examples of this include being able to offer a profit share scheme that sees our staff sharing 10 per cent of profits each year, as well as a further 10 per cent of our profits being distributed to local groups and causes within Lanark through Border Community Support.
Climate change and environmental sustainability are at the forefront of consumer concern. It would be naive of any business to ignore their environmental impact, not only from a corporate responsibility standpoint but also for the brand’s reputation. Big businesses can no longer be seen to be doing nothing.
We made a move last year to remove more than 90 per cent of the plastic from our retail packaging in a bid to reduce our carbon footprint. In doing so, we have eliminated 537 tonnes of CO2 from our manufacturing process each year. The reduction in our plastic packaging has also made our transportation more efficient, allowing us to fit double the amount of packs onto a single pallet. We also reduced our annual factory food waste by over 50 per cent in 2018, equating to a reduction of more than 90 tonnes.
Privately-owned businesses face many of the same challenges as large international organisations. We need to be in tune with the environment we operate in, from understanding our target customers’ needs and drivers, or predicting and preparing for potential economic insecurity and the impact that may bring.
Brexit is a case in point; potential for rising supplier and operating costs, impacts on recruitment and retaining talent within our business, changes in regulations, to name a few. As a business, we’ve been able to prepare appropriately in order to stay nimble, relevant and adapt to the market at the right time.
The full impact of Brexit and other unexpected issues such as the coronavirus are unknown but it’s here and all we can do as business owners is implement as many measures as we can in order to alleviate any negative impact. Sometimes it can be difficult to see light amidst the doom and gloom. But, choosing to see challenges as opportunities can be enlightening.
As a business we’re continuing to invest, innovate and adapt as we move forward to what looks set to be another exciting time in the consumer business market.
John Cunningham, founder and managing director of Border Biscuits.
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