Analysis: Sustainability – a costly dilemma?

Despite being one of the most discussed topics of the past several years, the industry still has a long way to go before it can claim to be truly sustainable. Do suppliers and retailers understand enough about the issue and its challenges? And are they communicating enough about sustainability to the consumer?

In January 2024, board manufacturer Egger held a landmark press conference at its headquarters in St Johann in Austria, bringing together several key brands to discuss some of the challenges that the industry is facing. 

Despite talking about a wide range of industry problems, from emerging global markets, logistics and post-Covid market conditions, un­­­­­­sur­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­pri­­­singly, sustainability played arguably the biggest role in the discussion. Senior figures from Egger, Blum and Häfele emphasised what they believe to be the biggest roadblock in the push for sustainability – cost. Or more specifically, whether consumers are willing to pay more for sustainable products. Michael Egger Jr, chief sales officer at Egger Group said: “Experts say sustainability will not be possible to achieve without an increase in prices.”

Looking at the industry as a whole, this appears to be a wide-ranging concern. In this issue of kbbreview alone, Howard Grindrod, vice-president of Hisense UK, admits that it’s been “difficult to sell sustainability” to consumers (pg 32). Similarly, in this month’s retailer profile (pg 52), Anglia Interiors’ Arron Bird says that consumers are interested in sustainability – but only until they have to pay more for it. Figures across the industry are acknowledging that this is a topic that needs to be discussed more. 

Looeeze Grossman, founder of The Used Kitchen Company, believes that consumers do genuinely “appear keen to become more sustainable”, but adds that, “in the current climate, budget seems to be a priority and very much the deciding factor when it comes to being more eco-friendly”.

Grossman’s opinion certainly appears to be reflected on an industry-wide scale.  Kbbreview’s own recent retailer survey spoke to over 500 retailers about a range of topics, one of which was what they’d noticed about consumers and their interest in sustainable product solutions. 

Roughly a third of retailers said they hadn’t seen any increase in demand for sustainable products, with kbbreview’s managing editor, Andrew Davies, concluding that “sustainable products are still not gaining the kind of momentum needed for this sector to have a significant impact on the carbon footprint of most homes”.

Cost

But what do the industry’s brands think? Are consumers willing to pay more for sustainability? 

“If I was asked this question two years ago, I would have said yes”, says Matthew Glynn, product marketing manager at Hisense UK, “but due to the current economic climate, there are a lot of other things to consider in today’s market.”

Jo Jackson, head of product management at Fisher & Paykel, believes that customers at the higher end of the market already seem comfortable to pay a little bit extra for a product with sustainable benefits. However, she says: “There are also a lot of consumers who would pay more for an environmentally- conscious brand and product, if they had the disposable cash for it.”

Alex Hyslop, marketing director at Mira Showers, believes that while some consumers may be willing to pay more for sustainability, they shouldn’t really have to. He thinks consumers are looking to balance sustainable living with performance, so manufacturers’ jobs should be to “make sure products always deliver the performance that consumers expect from our brand, and balance this with more sustainable solutions that are also affordable”.

Clearwater’s business and product development manager, Dan Boulton, has a firm belief: “I don’t think it’s something you can charge a premium for; it simply should come as standard.” He argues consumers simply expect suppliers to be operating sustainably, and its up to them to live up to expectations. However, some suppliers believe that the cost-of-living crisis might actually influence consumers to look closer at sustainability.

Steve Jones, managing director of Sirius Buying Group says: “Our latest data shows that homeowners are keen to learn more about the latest technological advancements when upgrading their appliances so that they can manage their energy use. Retailers need to anticipate using this in the sales conversation, with clear evidence which conveys how efficient a product will be over its lifespan.”

Rachael Rickhuss, marketing manager at Ripples, says: “Discussions around saving water and energy originally come from clients looking to reduce their water bills. The cost-of-living crisis has made people more aware of waste water and therefore people are being more stringent with their product selections, especially as their new bathroom should last them for the next 10+ years.”

Rotpunkt’s head of UK operations, Matt Phillips, notes that a positive shift towards sustainability will pay dividends as younger generations enter the market. “As millennials and Gen Z come of age, our research indicates that sustainability is an increasingly important factor when it comes to big-ticket purchases, so I believe our efforts will be reflected in the years ahead. Shopping with a conscience has become the norm for many homeowners.”

A similar eco-ethics theme was raised by Simon Bodsworth, managing director of Daval Furniture, who believes: “The consumer moral compass has shifted towards a more conscientious buying approach and ways in which they can ‘feel good’ about their purchase, so eco-alternatives that are just as affordable and effective are in demand – such as furniture which is made from FSC-approved timber.”

A moral mission

However, some people, like Smeg’s head of marketing John Davies, think that the issue isn’t so black and white. “Sustainability can be interpreted in many ways”, he emphasised. “Consumers are willing to pay more for a product that is durable and offers a lower environmental impact.”

Caesarstone’s VP of marketing, Jonathan Stanley, wonders if maybe a different perspective on sustainability is needed. He points out how “opting for lower-cost products often involves compromising on ethical labour practices, utilising less sustainable production methods and using low quality raw materials”. Again tapping into that link between ethics and sustainability, he admits that “we all need to appreciate that when a product is produced ethically and sustainably, it will sometimes cost more”.

Managing director of Quooker UK, Stephen Johnson, thinks that maybe the issue isn’t whether consumers are willing to pay more, but whether they are aware that they can actually pay less for sustainability. He thinks there is still a lot of consumer confusion around sustainability.

He has observed: “When talking to consumers, I have personally seen how surprised people are that the savings they will see with a Quooker long-term (both in terms of energy, but crucially, water) are so impressive.” He believes that consumers are likely to pay a premium for a product if retailers can help them understand how they will likely save money in the long run.

Ongoing strategy

Despite the split opinions over cost, one thing that seemingly all suppliers can agree on is that despite its challenges, sustainability is incredibly important to their ongoing business strategy.

Nick Taylor, head of residential at Zip Water, says that sustainability is inherently entwined with the company’s philosophy. He explains: “Credibility, reputation and ethics are all important aspects of our brand and each of these we can relate to in providing the needs of people today, without causing detriment to the needs of people, nature and the planet in the future.”

Another brand that says it is built on a sustainable foundation is Abode. Accor­ding to the manufacturer, “monitoring lifestyle trends and future projections under­pins our approach and we believe there is always room for improvement and new ideas. We are finding that developing sus­­tainable products, services and practices goes hand in hand with our core values of passion, innovation and assurance.”

Outside of product offerings, business director at Just Trays, Lee Hudson, says that the push for sustainability has become more of a cultural issue at the company. He thinks a desire for sustainability is beginning to influence consumer decisions, but aside from just product solutions, they’ve “created a culture of continual improvement for all our employees, at all levels, to challenge current
methods and materials we use to reduce the impact we have on the planet”.

Blum has been very vocal about its sustainability efforts across the business – from installing solar panels and harnessing renewable energy, to supporting safe housing for local ecological populations, such as honeybees. Häfele has gone into detail about its efforts to reconsider its packaging, such as optimising the thickness of bubble wrap and using shipping boxes with more size variations. 

Egger is a particularly good example of a company with a clear sustainability focus. Its product sustainability senior expert, Dr Martina Bender, has highlighted how its chipboard products can be recycled up to seven times, with products at their end of life recycled into biomass fuel. This is then used to heat its production facility, with excess energy being returned back to the local power grid. The company even says it provides energy for up to 150 local houses using its recycled resources.

This ties in to a point raised by Michael Egger Jr at the company’s sustainability conference. Egger believes that the job of leadership is to “bring management together globally and ask their cultural perspective to create solutions”, and this can work for sustainability as well as other issues. He believes that company leaders owe this to both their staff and their families. However, he does acknowledge that this may pose a challenge. For Egger, he notes, “we need our 11,000+ staff to be aligned, from Argentina to Germany”.

With sustainability such a priority for suppliers, what do they believe we need to be doing more of? 

“Quantifying whether enough has been done as an industry with regards to sustainability is always going to be difficult. Yes, there are awards and standards which can indicate what has been done, but to make a true impact on the environment we need to all push further than that.”, believes Jessica Rhodes, product and marketing manager at Asko. 

She adds: “New technologies and expanding knowledge continually redefine the standards we must adhere to in order to be environmentally responsible and sustainable. We must remain vigilant, continually reevaluating our practices, and pushing the boundaries of what is considered environmentally responsible.”

Similarly, Tim Hutchinson, divisional manager at Liebherr UK, believes that “the sector should consider sustainability from all angles. Technology is at the forefront of advances in sustainability, and the industry should not only embrace new technology, but also continue to evaluate the ways it can be advanced for both the manufacturing process and within the products we produce”.

Egger’s answer, raised at its press conference, was that sustainable manufacturing and processes are all important, but the key to sustainable advancement actually lies in data – or more specifically, in using it correctly. “We don’t want to let ourselves be blinded by suppliers who try and mislead us on climate,” Egger said. “We need huge data quantities to measure sustainability and its impact. We need software for that. We need our suppliers to achieve Net Zero by 2050. Our recent surveys have found that customers are not always as knowledgeable about sustainability as we’d like.”

Right track

Although Egger is right to point out that data is a valuable way of measuring sustainable advances, the issue is such an unpresented topic on a global scale. Gregor Riekena, Häfele chairman, pointed out at Egger’s conference: “Although culture and positive management can be your compass, there is no map for the way ahead.”

With no roadmap, how do we know if what we’re doing is right or effective at all? Roman Showers believes that although we still can’t know for certain, “any change is a positive change towards a more sustainable future”. The brand also points out that: “There is still a long way to go, of course, but we are making positive changes and conscious decisions in terms of our sustainability pledge”.

Similarly, Falmec UK’s managing director, Sean Drumm, believes that all is not lost just because we can’t see the bigger picture or end goals. “If we all look at our supply lines and where it’s all coming from, we have a chance. Even the small changes matter, so we need to keep going along this path.” He concludes that, in the grand scheme of things: “All we can do is our best.”

For Tim Spann, UK national sales manager at Keller, such philosophical questions don’t actually matter as much as their solutions. He firmly believes that: “not knowing you are on the right track is not an excuse for inactivity. Find the right track, set goals and deliver”.

Retailer responsibility

However, even if manufacturers believe they’re leading the way with sustainability, they have to get the retailers on board to have any hope of reaching the end consumer. Speaking from experience, Keith Myers, owner of The Myers Touch in Winchester, feels that “more knowledge about the issues of sustainability would be useful” to retailers. He believes that independent retailers offer a vital link to changing consumer attitudes, and if suppliers keep retailers informed, they can help feed this back to consumers.

Hisense UK’s Matthew Glynn echoes Myers’ point, agreeing that: “Retailers do play a big role in the journey to improved sustainability. They act as the middlemen, speaking to brands on behalf of their consumers, so it’s a real collaborative approach.” He also agrees that: “Brands and retailers must work together in an effort to become more sustainable, in a way that works for all parties.”

Ziggy Kulig, CEO at Graff, also believes that working with retailers will become vital as consumers become more and more critical of their products. Kulig says: “Providing education and availability of information – such as transparency in supply chain – allows consumers to trace the origin and impact of products. This is key to ensuring retailers understand not only what makes a product sustainable, but also why it is so important.”

Collaboration

One of the key takeaways from Egger’s press conference was that a climate crisis threatens us all, so in turn, we all need to work together to find solutions. Although it’s clear that global brands are working together for the same goals, is it enough to make real change? 

Roman Showers believes that: “although strides have been made towards sustainability in the industry, there is certainly more that can be done”. The manufacturer believes the KBB industry can collectively strive for more ambitious sustainability goals, such as having retailers rank suppliers based on their sustainability practices, and advocate for a shift towards circular economic principles.

Head of UKE Home Solutions, Helen Lord, believes that collaborating with other sustainability-driven organisations has the potential to accelerate sustainable initiatives. As an example, she cites her company’s recent collaboration with Magnet to extend UKE’s Rehome or Recycle trade-in service to customers. Lord explains: “This collaboration has enabled Magnet to expand their sustainability focus by taking responsibility for the kitchens they replace, thus supporting the circular economy by reducing landfill waste and protecting
the environment.”

Meanwhile, Blum UK’s technical manager, Matthew Glanfield, thinks we should look beyond the KBB industry and “ask whether we are doing enough on a global scale”. He believes that we all need to adapt to new advancements as they are introduced. “As new technologies are developed, as we find better ways of handling waste or more recycling options become available to us.”

Managing director of the KBBG, Bill Miller, thinks that the problem goes beyond that of just manufacturers, and is the responsibility of the whole industry, “including suppliers, retailers, associated business partners and the media”. He believes that the sustainable shift will give us “some excellent new opportunities and it will be those suppliers and retailers that lead the way who will reap the biggest rewards”.

Eco-conscious earnings

So, if retailers believe the responsibility is on suppliers to ensure a sustainable supply chain, how can they balance earning a profit with their sustainable responsibilities? Guy Tooth, operations and supply chain director at Moores, believes that even though sustainable manufacturing and processes could cost suppliers more, they need to focus on the long-term payback they’ll have, instead of focusing on the short-term cost.

Similarly, VitrA’s sustainability director, Gokce Otkun, believes that there can be benefits for sustainable suppliers – as well as the planet – down the line. She says: “The obvious advantages are improved cost efficiencies against energy consumption and reducing waste and operational costs, but being more sustainable can also open opportunities. It can engender improved value for employees, customers and the communities in which we operate and become a key competitive advantage.”

Interestingly, Stefan Gesing, CEO of Dornbracht, doesn’t believe that profit and sustainability need to be mutually exclusive. He says that Dornbracht’s ReCrafted range helps demonstrate that refurbished products can be just as valuable as new ones, and helps highlight “the beauty of a circular economy”.

Returning again to that theme of collaboration, Lee Hudson at Just Trays believes that the answer lies in being open and honest with each other. He acknowledges that: “There will be a cost to producing more eco-friendly products and operating in a more sustainable manner. But if everyone in the industry can get behind it, costs will of course become standardised.” 

Unsurprisingly, the outcome of Egger’s January press conference was that there aren’t any simple and definite answers about the challenges to sustainability. Similarly, none of us has a comprehensive guide to navigating the issue, and none of us ever knows quite what is around the corner. However, although this is a concern, today’s industry leaders are also optimistic that through collaboration we can use the challenges of sustainability to create new opportunities. 

Blum CEO Philipp Blum concluded that: “[Blum is] intrinsically motivated in  sustainable efforts. It’s not a new topic, but new solutions are emerging all the time, and we need to pursue them with motivation and passion.” Similarly, Häfele’s chairman Gregor Riekena said: “I’m confident this will work out, and we’ll have a sustainable company in every sense of the word. Sustainable investments can be implemented with as small a footprint as possible. With a positive mind-set, we will get there.”

As the host of the conference, it’s only fair that Michael Egger Jr has the last word. Despite identifying some major challenges to sustainability, he feels like these are not insurmountable problems.

“My grandfather was already thinking sustainably in 1961. He believed that woodchips are simply too expensive to throw away, so he first looked at how we can reuse them again and again”, he recalled, concluding: “In these times, we can’t do it alone, and we’re all going through this process together. If we communicate openly and honestly, I truly believe this always pays off, so we need to look to the future together as an entire industry.”