Investing in a sustainable supply chain with our partners

The saying goes that “Alone we can do so little; together we can do so much”. This holds true when creating more sustainable supply chains.??

It’s predicted that supply chains typically account for more than 90% of organizations' greenhouse gases*, so supply chain departments carry significant responsibility in setting targets, measuring progress and working with partners on sustainable solutions.?

The Spirit of Sustainability (SoS) platform is LCBO’s bold commitment to drive meaningful and equitable change in our communities, be the industry leader in sustainable practices and take better care of our planet – all for the good of Ontario. This includes establishing environmentally conscious standards across the production, transportation, and distribution of products.??

As we approach Earth Day, it is worth reflecting on how far LCBO and its partners have come on our journey to minimize the impact our supply chain has on the environment.??

Shared values and commitment?

The most significant thing that we can do to build a more sustainable supply chain is partner with companies who share in our commitment. When seeking new supply chain partners, we assess them according to multiple criteria; while dollars and cents will always matter, we also consider their values and commitment to sustainability. For example, do they have environmental commitments as part of their strategic plan? Do they have targets and how are they measuring success??

Asking these questions helps us to understand what they value, their ethical standards, how they do business and if they have a similar commitment to supply chain sustainability, which is critical to our collective impact.?

Packaging and waste??

More than 110 million products pass thought LCBO’s six warehouses every year. Every pallet contains products and their packaging (e.g. bottles, cans), cardboard boxes which hold a case, twine which helps hold the cases on the pallet. We have a responsibility to minimize this impact.??

In terms of product packaging, there has been – and continues to be – exciting innovation in this space. LCBO President and CEO George Soleas led the industry’s adoption of the Lightweight Glass Bottle Program which sets maximum weight standards for many bottles sold through LCBO .? This not only has positive health and safety outcomes, but it reduces annual waste by more than 13 million wine bottles and saves 25 tonnes of greenhouse gas emissions through optimized shipments.??

Glass and aluminum shortages in the previous three years have also spurred greater innovation in product packaging across beverage alcohol categories. We’re seeing aluminum wine bottles, tetra packs and new innovative product packaging such as Fibre Bottles along with an increase in different products, including ready to drink beverages, in keg format. The opportunity to evolve product packaging is critical to working towards a more sustainable supply chain.?

Packaging is the largest source of plastic waste** and represents 47% of the total waste generated in Canada***. LCBO’s Dorina Brasoveanu is the Chair of a National Assurance Committee, a working group of Canada’s liquor jurisdictions, focused on regulatory changes impacting beverage alcohol product requirements. One of the most recent regulatory changes is the ban of plastic 6-pack rings. This ban becomes effective in June 2023 and the LCBO is playing a key role in collaborating with Ontario suppliers and producers on the transition and to pilot new alternatives. You’re likely already noticing plastic ring alternatives in store and online. We will continue working together with our trade and government partners to help embrace change in a way that makes sense for the beverage alcohol industry.??

Beyond the individual product packaging, more than 81% of our warehouse waste is diverted from landfills. We do our best to ensure that all packaging – whether it’s cardboard, string or pallets – are reused or recycled.? This extends to how we package products when delivery to customer’s homes; our pellets (which help protect bottles from breaking) are biodegradable, so next time you receive an LCBO home delivery, I encourage you to dissolve them in water!?

Logistics and freight??

The transportation industry is making significant progress in emissions reduction, and there have been great outcomes of collaboration in this space. For example, we collaborated with two transportation service providers to roll out a pilot program for our Durham warehouse aimed at – reducing the use of gensets on temperature-controlled containers. In the first four years, we were able to reduce diesel usage and GHG emission by more than 40% and this is now adopted as common practice.?

Optimization of our fleet is a continuous focus. Every year, we reflect on the requirements from an outbound perspective to consider if we are serving our customers in the best way and what kind of service our 680+ store network requires. We want to avoid empty miles on the road (e.g. empty or partially empty trailers), from a cost-efficiency standpoint, but also from an emissions point of view.?

As I look to the future opportunities in logistics and freight, a big area of opportunity will be energy alternatives such as hydrogen and electricity. Time will tell what this will look like for the LCBO, but we will continue to monitor this opportunity, alongside our partners.???

In summary?

As I think about where we’ve been and where we’re going, a focus on sustainability in the supply chain is only going to continue to grow in importance across industry. And it's only through shared values and commitments with our partners which we will be successful.??

So as Earth Day approaches, I’d like to extend a thank you to our trade partners for your innovation, collaboration and focus on greening the supply chain. Here’s to creating a more sustainable Ontario (and environment) through our focus on people, planet and partnerships.? ?

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* Emerging Trends in Supply Chain Emissions Engagement, United States Protection Agency. ?

** Technical issues paper: Recycled content for certain plastic manufactured items Regulations - Canada.ca ?

***Economic Study of the Canadian Plastic Industry, Market and Waste (publications.gc.ca) ?

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