Leading in sustainability: a competitive advantage or a burden?
Arçelik ranked 34th on Corporate Knights’ 2021 Global 100 Index, making it the most sustainable home-appliances and houseware companies in the world. This position can work as a competitive advantage – a differentiator vis-à-vis the competition – but it could also be a challenge, demanding additional investments and leading to higher costs. Bahadir Tomac, Consumer Insights Manager at Arçelik, reflects on this.
“Actually, for us being a leader in this area means that we need to push our industry to be more responsible when it comes to sustainability. Of course, this can have drawbacks in comparison to the competition, but that is not our main concern. We are a bold company that does not wait for the competition to act before taking action ourselves. In fact, we called upon our competitors, after developing the world’s first and only washing machine with a filter that collects up to 90% of fabric microfibers that would otherwise leak into water resources. In line with our open innovation and multi-stakeholder approach, we strive to work together with different industries, NGOs, universities, and all stakeholders in and outside of the sector to further develop this technology together. The fight for a more sustainable future is everyone’s fight, so we must all succeed. In the end, it’s all about our impact on the planet, so for us sustainability is a survival war, not a financial or a market-share war. And in this war, companies, governments and people should fight together.”
Battling food waste: it starts at home
As a sustainability leader, Arçelik runs many projects in environmental, social and governance (ESG) areas across its 12 global brands. Here, we zoom in on Grundig, one of its global home-appliance brands, and how it fights food waste, an important social theme for Arçelik.
Grundig’s mission is based on inspiring people to design a better future, by respecting food and respecting the planet. So, next to producing high-level environmentally friendly appliances, Grundig is also dedicated to motivating people to make more sustainable decisions at home. In 2019, the brand launched the narrative ‘It Starts At Home’, raising awareness around food waste. By partnering with Food for Soul, an initiative founded by Chef Massimo Bottura, Grundig set up ‘Refettorio Gastromotiva’. “These are restaurants that transform surplus ingredients – ingredients that are edible but destined to be dumped – into healthy and nourishing meals for socially vulnerable communities,” explains Bahadir. By the end of 2020, Grundig saved more than 500 tons of food from being wasted, and more than 785,000 dishes were served through this program. During COVID-19, the brand also launched a webinar series with Massimo to help people make the most of their food during and after the quarantine. And with success; the episodes reached 4.4 million people and received 10.7 million impressions.
Designing for circularity: being bold
When it comes to staying in touch with the planet, one of the areas Arçelik is actively investing in is the circular economy. The brand uses natural resources in a responsible way and develops products that include more recycled and alternative raw materials. A concrete example is how Arçelik transformed eight tons of recycled-waste fishing nets and 111,7 tons of industrial-thread waste into recycled-polyamide compounds which were then used in oven, washing machine, washer-dryer and dishwasher parts. They also redefined their product design and manufacturing processes in line with circularity principles in order to extend the product life cycle. However, one might wonder what the business model is here. When designing for durability and repairability, this might have a negative impact on sales, or not?
“We decided to be bold in this,” says Bahadir. “There is always a risk of losing some market share, but we should not be afraid of that. There will always be a market we can tap into. We won’t go out of business, for example, because people only change their washing machines every nine years instead of seven years. There are still lots of people around the world that don’t have a washing machine at all; similar for tumble dryers and even ovens. So, we are investing actively in new geographies, even those that no one else wants to enter, or the challenging ones in which it will be hard to survive. So, from a business perspective, there will always be new categories, and new consumers, you shouldn’t be afraid of that. What’s important is making sure you have a sustainable business and a good brand that people rely on. This will make it easier to expand into new territories. Sustainability makes perfect business sense.”
In summary, as a leader in sustainability, Arçelik wants to challenge the industry and fight for sustainability together with consumers, the government, and even its competitors. Food waste and the circular economy – among other things – are important areas for the brand to act on, and they fully commit to these. They are not afraid of losing market share, as they are convinced new opportunities are always on the horizon.
Hungry for more? Stay tuned as we will release more ‘Conscious Consumption’ interviews in the coming weeks!