Sustainability efforts prove profitable to large businesses, says Frost analyst

By Editor


Sustainability efforts prove profitable to large businesses, says Frost analyst

Greentech Lead Asia: The water and wastewater treatment
(WWWT) solutions market in Asia Pacific countries is spurred by the growth of
Food and Beverages industry. According to a recent analysis from Frost &
Sullivan, the WWWT market earned revenues of US$744.3 million in 2011
and estimates this to exceed US$1.18 billion by 2016.

The rising demand for high-purity water in the food and
beverage industry and tough legislation on industrial wastewater discharge
bodes well for the WWWT solutions market. In addition, the growing pressure on
businesses to reduce their water consumption coupled with the escalating costs
of water has necessitated wastewater recycle and reuse.

Greentech Lead recently had an interaction with David Lee, senior
consultant, Environment & Building Technologies, Frost & Sullivan Asia
Pacific, to gain more insight on the WWWT market in the region:

Which are the companies in the food and beverage industry
in Asia Pacific that were ranked high in water sustainability initiatives?

In general, F&B companies leading in water
sustainability initiatives are the global public companies such as Unilever,
Nestle, Danone, Coca – Cola, PepsiCo. These F&B companies tends to be leading
globally for the water efforts due to the nature of business, which uses water intensively
as a primary ingredient or processing medium.

As your report said, growing environmental concerns and
strict government policies are driving the WWWT market, but for most of the
companies, sustainability is second to profitability. Any estimate on what
percent of food and beverage companies in the region have seriously adopted
WWWT measures?

There is no available data on the percent of F&B
companies in the region adopting WWWT measures.

However to address your comments on sustainability being
second to profitability, I would say that is only partially correct. I would
say “Sustainability is considered second to short-term profitability”
as companies investing in WWWT most likely will not see the immediate return of
investment. Hence, that also explains the limitation of investing in WWWT
solution for smaller F&B companies. Large F&B companies will be more
keen to address sustainable water issues across its operation as it is both
profitable in the long run (in terms of reducing water use in production) as
well as it adds value to the company, which is beneficial in terms of branding
and for marketing.

The huge costs associated with sustainability initiatives
puts burden on small and medium companies. Have you seen any efforts from any
governments in the region to support WWWT initiatives in small businesses?

No research on this area had been undertaken for this
study. However, I would think there exist some sporadic initiatives from
developed countries in the region such as Australia, Japan and South Korea.

Companies like Coca-Cola are actively pursuing WWWT
initiatives across the world. Do you think such initiatives actually contribute
to improving their bottom-line? If yes, how?

A case study for such would be Coca-Cola Company which
established a clear sustainability goals starting in 2002 across all bottling
plants around the world. Compared to 2004, Coca-Cola had managed to reduce the
water used ratio by 16% and is aiming to improve water efficiency by 20% in
2012. Translating into monetary term, the company aims to be able to reduce its
operating cost by half a billion dollars globally by end of 2012.

Besides this apparent savings on hard cost (freshwater
being a resource), the company also gained credit for its sustainability effort,
which indirectly attracts investors and loyalty from its customers.

What is the role of Frost & Sullivan in making the
world sustainable?

Frost & Sullivan is helping companies, organizations
and governments around the world not only in better understanding
sustainability and how does it fit into the business dynamics for specific
industries but also projecting the likely future scenarios for markets and
cities and helping stakeholders identify and participate in evolving these to a
more positive future. It is critical for the world to understand the future
implications of how the world may likely evolve based on business as usual and
Frost & Sullivan is doing tremendous work in projecting sustainability as
the tool and enabler to a better future.

Rajani Baburajan

[email protected]


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