Financial Institutions
Many financial institutions and investors have shown an increased interest in sustainable and environmentally friendly projects. They have been allocating substantial funds to support initiatives aligned with circular economy principles.
Global Commitments
Internationally, organizations like the United Nations have been urging countries and businesses to transition to more sustainable models. These calls often involve financial incentives and investments.
Circular Economy Reports
Various reports and studies by organizations such as the Ellen MacArthur Foundation and McKinsey & Company have emphasised the economic and environmental benefits of a circular economy.
Our approach delivers significant financial benefits and cost savings*:
Increased Revenue
Customer loyalty boost: +€5,000 annually.
New market access from repurposing grape waste: +€25,500 annually.
Facility rentals and events: +€24,000 annually.
Cost Savings
Waste management improvements: -€17,000 annually.
Standardised packaging: -20% annual packaging costs.
Reduced water and energy costs: -€8,500 annually.
Financial Benefits and Cost Savings
* Calculated based on a winery producing between 50,000 and 500,000 cases of wine annually.
Strategic Benefits
Customer Loyalty
A 10% increase in customer loyalty can translate to an extra 5,000 EUR in annual revenue (10% of 50,000 EUR).
Non-financial Reporting
Passed into law on Nov. 28, 2022, by the European Union Council, the new EU Corporate Sustainability Reporting Directive (CSRD) mandates more detailed sustainability reporting in order to “increase a company’s accountability, prevent divergent sustainability standards, and ease the transition to a sustainable economy.” The fine for not complying with this will be 5% of the company's total annual turnover, or twice the profits gained or losses avoided due to the breach.
If you are a non-European company that has generated a net turnover of 150 million Euros within the EU and that has at least one subsidiary or branch in the EU then the CSRD will also apply to you.
Access to Financing
Sustainability grants in the region of 85,000 EUR can be secured for sustainability initiatives.
Competitiveness
A 5% increase in market share could result in an additional 42,500 EUR in profit (5% of 850,000 EUR).
New Market Access
By generating an extra 25,500 EUR annually from repurposing grape waste, the winery can tap into new markets. (The global grape skin market generated 164.5 million US $ in 2022.)
Resilience
If a winery reduced their dependence on external energy resources, such as solar panels, they will reduce their current energy price and supply volatility and avoid extra costs.
Economic Benefits
New Business Lines
Servitisation
Economic income from the opening of new business lines/models
If a winery establishes the offering of alternative services of their facilities at 3,000 EUR per event with at least 6 events per year, that's an additional 18,000 EUR in annual income.
If a winery rent their facilities for bottling activities to other wineries without bottling machinery in their facilities they could earn 0.50 EUR per bottle means an addition income with a run of 12,000 bottles of 6,000 EUR per extra bottling.
If the winery earns 0.85 EUR per recycled bottle and recycles 50,000 bottles per year, that's an additional 42,500 EUR in annual income.
Cost Savings
If the winery saves 17,000 EUR annually through waste management efficiency improvements, this is a significant cost reduction.
If the winery standardized the usage of packaging items such as carton and bottle they will reduce its annual cost by a min of 20% of their annual cost.
Internal Effectiveness
If the winery reduces its annual water and energy costs by 8,500 EUR (20% of 42,500 EUR spent initially), this demonstrates substantial savings.
According to the European Green Deal Investment Plan, in the next decade, a minimum of one trillion euros of sustainable investments will be mobilised. The change from a linear model to a more circular one is an opportunity.
The European Union's European Green Deal, launched in 2019, is a significant commitment to making Europe the world's first climate-neutral continent. It involves substantial investments in sustainability, including circular economy practices. While it doesn't specify a particular trillion-euro figure, it does highlight the massive scale of investments required.
Social Benefits
Growth of Local Communities
Wineries create job opportunities within the community, stimulating economic growth. They often engage in community initiatives, supporting local schools, healthcare, and infrastructure, enhancing overall quality of life. Furthermore, they contribute to the preservation of the local environment, ensuring a healthier and more attractive living space for residents, which, in turn, attracts tourism and supports local businesses, further boosting the community's prosperity.
More Responsible Business Throughout the Value Chain
By implementing ethical labor practices and supporting local communities, wineries establish themselves as responsible corporate citizens. Engaging with local farmers and suppliers in sustainable practices fosters economic growth and stability, improving livelihoods within the supply chain. Additionally, by promoting sustainable viticulture and production methods, wineries set industry standards, encouraging other businesses to adopt socially responsible practices, thereby creating a positive ripple effect throughout the entire wine industry.
Business
Opportunities
Produce on Demand
By adopting a "produce on demand" model, the winery reduces waste and avoids excess stock.
Implementing a produce-on-demand model can potentially reduce costs related to excess inventory, storage, and wastage, leading to significant savings. To estimate the potential savings from adapting a produce-on-demand model for a winery producing 20,000 bottles annually and selling each bottle for 6 EUR ex-cellar, considering reduced inventory costs at 5%, assuming a 5% reduction in wastage costs total estimated annual savings can be as high as 18,000 EUR.
Renewable Energies
Suppose the winery invests in solar panels, generating 10,000 EUR worth of electricity annually, and receives subsidies or incentives from the government for using renewable energy sources.
Digitalisation
Implementing digitalisation tools for material traceability and resource optimization can lead to operational efficiencies. If it results in a 5% reduction in production costs, this could translate to 21,250 EUR in annual savings (5% of 425,000 EUR production costs).
Environmental Benefits
Extension of Resource Life Cycle
By extending the life cycle of packaging materials for example (e.g., glass bottles), wineries can reduce their annual packaging costs by 10%.
Minimising waste generation, using water and energy efficiently, and adopting eco-friendly farming practices, wineries contribute to environmental conservation, ensuring the long-term availability of vital resources.
Waste Minimalisation
Implementing practices such as recycling grape by-products, adopting efficient packaging methods, and reusing materials, wineries can drastically reduce the amount of waste sent to landfills. This reduction in waste lessens the environmental burden, decreasing pollution and conserving landfill space. Additionally, sustainable wineries often inspire eco-conscious practices among consumers and other businesses, fostering a culture of environmental responsibility in the community.
Reduction of Pollution
By implementing eco-friendly production processes, waste management systems, and energy-efficient technologies, wineries can significantly decrease their carbon footprint and minimize air, water, and soil pollution. Sustainable practices, such as using natural pest control methods and organic farming, reduce the reliance on harmful chemicals, preserving both the vineyard ecosystem and surrounding environment. These efforts not only protect local habitats and wildlife but also contribute to a cleaner, healthier environment for neighbouring communities.