Making the drinks industry more sustainable.
The drinks industry is one of the oldest industries in the world. So, it may be no surprise that the industry is a little antiquated. Despite the thriving global industry, the relationships, legacy systems, and data ownership between stockholders and brand owners mean a technological solution for digitising the sector has been too challenging and costly to produce.
Brand owners have tried. However, the problem is they are far from independent. Their platforms are not open marketplaces since competitor products are omitted. Impartiality is vital for digital disruption. While all other industries have found their route to digitisation, the drinks industry has been left behind, stuck in their old 20th Century ways.
Aside from the cost of a pint increasing due to the increased overheads it results in, there’s a much more damaging impact we should all be concerned about – the impact on the environment.
For any means of production, there will be carbon emissions. Typically, we accept this since the product being created has a use. It is a price we’re willing to pay, and if the emissions can be reduced or offset, even better.
In the case of the drinks industry, the two critical contributors to emissions are the large volume of water required to make drinks and the electricity that is used too. Whilst this does create significant carbon emissions, the products being created support a market worth over $1 trillion to the global economy.
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So, as long as a product is put to use, the emissions are palatable. However, we should be seriously concerned when a product is not used and instead destroyed.
While the headlines have focused on the likes of Amazon destroying returned products because it costs them less than having to resell and ship again, the drinks industry has essentially gotten away with a similar approach to excess stock.
Therefore, it might surprise many that millions of drinks are being destroyed every day because they have either passed their expiration date or are simply taking up valuable storage space that could be given to faster-selling lines. This is profoundly inefficient and very bad for the environment.
Not only is this a waste of the energy used in creating the drinks, but the act of destroying them causes even more emissions since the products are destroyed through fire. Drinks are quite literally being burned rather than sold for consumption. Shockingly, this is wholly accepted by many within the drinks industry; it is a standard item for their profit and loss sheet.
I believe the lack of digitisation within the industry should bear some of the blame here. The old methods of storing, tracking, and selling stock mean poorly recorded inventory, or outright mistakes, are commonplace. More often than not, this is because the drinks pass their sell-by date – something which could have been so easily avoided had a more efficient and ‘smart’ marketplace existed. For stock, which is simply taking up space, again, the ability to list stock on a marketplace with ready and eager buyers will ensure the selling of the stock. Whilst the stock is being sold, the seller will also have more free space, save products from being destroyed and add more revenue. The challenge, as mentioned above, is brand owners have no incentive to create such an open marketplace. That’s where we have stepped in. We have developed a platform called Spiritrade, which is entirely proprietary and wholly independent. The software connects buyers and sellers and makes negotiating and trading easier whilst looking out for the environment. It works by allowing stockholders to upload inventory and manage the pricing, with buyers able to submit offers. In a sense, it works in a similar way to Amazon or eBay, but on this global, B2B scale, we’re talking transactions in the hundreds of thousands for tens of thousands of drinks at a time.
But it isn’t just about the platform. The way drinks are transported matters too. The old method of B2B sales of drinks would see stock shipped around the world multiple times before reaching a buyer.
We knew that the digital platform must be partnered with a global warehouse network to logistically help transport stock in the fastest, most efficient, and, therefore, lowest emissions route possible. No more shipping stock around the world many times over. By providing a technological platform for stockholders to easily list, manage, and sell stock, and for buyers all over the world to find lower-cost products, be it due to a nearing sell-by date or desire from the stockholder to free up their shelves, the drinks industry becomes much more sustainable.
We should be rightly shock that products which take much water and energy to produce are simply being burned. Thankfully, technology, as is so often the case, provides the best solution. Less waste, less emissions, and more innovation. I’ll drink to that.
