Concha y Toro: Sustainability can be a commercial decision

Nordics leading the way

The Nordics, led by Sweden, are leading the way when it comes to promoting sustainability, VCT’s sustainability manager for the Nordics Linda Karlsson said, primarily due to the influence of the countries’ monopoly systems, Systembolaget in Sweden, Alko in Finland and Vinmonopolet in Norway.

“If the monopolies decide it’s what they want, they will steep the market,” she said, in an case study of other markets sustainability expectations and how
their consumers engage with it.

She pointed out that in the last five years, Systembolaget has used the growing consumer interest in organic food to actively promote organic wine, which has more than doubling the original target of 10% of total sales being organic by 2020, to around 22% in 2018 or 45 million Litres.

This was followed by a move towards lightweight bottles in 2014 to cut CO2 emissions, as currently around 35% of wines comes in glass as opposed to Bag-in-box or PET bottles, but accounts for 85% of carbon emissions. Although light-weighting was not compulsory, Karlsson explained that there were advantages for companies to do so, such as earning extra points in tenders.

“There are different ways to push companies to do it without making it absolutely compulsory,” she noted.

All three monopolies wanted to go further, however, adding that it would be interesting to see how far the monopoly would push the industry in the direction of PET bottles, which currently make up a very small part of volume sales.

Although wine promotion is banned, a logo system is in place on shelf barkers to show consumers where wines are either a good choice for the environment, organic, biodynamic, vegan, natural, and  sustainably packaged, she said, although she said the monopoly realised that having so many logos was potentially confusing.

The impact of a 2016 documentary by a Danish filmmaker investigating the working conditions of farm workers at vineyards in South Africa was wide-ranging, and according to Karlsson, saw Sweden double the number of audits in South Africa – with the intention to work to improve the situation, rather than penalise producers, along with other ‘risk’ countries, Chile and Argentina, although this has since be widened to embracing a wider auditing across all countries of origin.

The last two years has also seen a shift toward more environmental factors, influenced by events such as summer of forest fires in Sweden, Swedish school girl activist Greta Thunberg’s climate change protests and Donald Trump taking the US out of the Paris Agreement on climate change. Around 70-75% of consumers across the three Nordic countries claim sustainability would influence their buying decision, with around 25% of Swedish consumers willing to pay a 25% price premium. As a result, the monopolies now require extensive CO2 mapping for all wine importers, and have launched a more user-friendly web-based tool to facilitate this.

Looking forward, the monopolies are set to develop these policies further, she noted, with the introduction of further CO2 mapping targets and supply chain mapping, the evaluation of suppliers’s environmental parameters and increasing the communication of sustainabilty on pack, as well as extending the term ‘ethical’ beyond the three main labels in the Nordics, Fairtrade, Wieta and Fair for Life.