Did you know that the month of July, 2019, was the hottest month on Earth ever since human beings have been keeping records? In fact, of the 10 hottest years on record, eight have happened in the past 10 years. (Only 2011 and 2012 missed being in the top 10.)
Regardless of what your politics are, this should be disturbing, especially for the wine industry. Wine is an agricultural endeavor that depends, crucially, on climate, soil, and terrain. Growers and vintners take it upon themselves to be good stewards of the earth that provides them with their well-being.
We know there are many things that can cause adverse environmental changes, one of which is the profound growth of on-line sales. With broad based variety of products to purchase, along with fast shipping, free returns, and low prices, there are potentially a lot of ways in which eCommerce is affecting the environment.
So how do you balance making profits from DTC sales by offering convenience for the consumer but have a minimal environmental impact on the planet?
It’s high time we asked this question as it relates to the DTC wine shipping industry. We all want to do what’s right for the earth, and for our future generations. And that should include everything, from planting to the final mile of delivery.
Big Players are Looking at the Environmental Impact of eCommerce
If you have an eCommerce presence and have not yet begun to think about environmental impact, you might well be behind the curve.
Take Amazon, for example. The news hit not too long ago that Amazon is beginning to ask its vendors to use less packaging, including the dreaded “box in a box” phenomenon. This will have the added benefit of lowering DIM weights, and thus shipping costs.
Granted, shipping wine is more complicated than shipping a typical Amazon product, especially when it comes to packaging requirements, Adult Signature on delivery, temp controlled shipping, and so on. Still, there is a growing awareness that eCommerce has an environmental impact, and that best practices should aim to minimize that impact where possible.
What sorts of considerations are in play when it comes to eCommerce, wine shipping, and the environment?
Issue #1: Broad Variety of Products
The rise of eCommerce can be traced to offering consumers a broad variety of products that they can choose from by simply clicking the mouse and ordering. Gone are the days of having to drive to multiple local retail stores to find what you want. On one hand the argument goes that this saves fuel by not driving around, but studies have shown that is not the case. Enter the modern marketplaces – Amazon, Ebay, Wayfair, Target, Walmart, etc. – all of which allow you to order items that they may fulfill or may come from third parties as a drop ship. This variety and convenience creates more orders in total and fewer backorders, which in turn adds more packages traveling around the country.
The wine industry actually tries to limit backorders due to the high cost of shipping such a heavy product and the adult signature requirements. This promotes consolidation of packages which is good for mitigating carbon footprints.
Issue #2: Delivery Vehicles on the Road
The second issue that the rise of eCommerce and cheap, convenient shipping have brought about is the sheer number of vehicles on the road. By one estimate, the combined annual emissions from delivery vehicles used by UPS, USPS, and FedEx equals the output of 7 million additional cars on the road. For context, that’s just a little less than the total number of cars in the state of Virginia.
It’s unlikely that the number of delivery vehicles will be reduced any time soon. eCommerce is now part of the fabric of the American economy, and delivery is an essential part of it. So much so that Amazon has announced it will get into the transportation side of the business and compete directly with the other major small parcel carriers.
But, when it comes to wine, redelivery and returns are areas where the wine industry could improve. When wine is not successfully delivered (say, if there is not an adult, 21 or over to receive the shipment), it triggers additional delivery attempts, which means more miles on delivery trucks. After several unsuccessful attempts and sometimes four, the wine package may even be returned, creating more unnecessary freight miles (let alone what it does to your wine being in the transportation elements for so long).
Issue #3: Appealing to the Consumer
When a consumer’s options aren’t limited to local stores (and/or local tasting rooms, in the case of wine), competition is more intense. This means companies are trying harder to “wow” their consumers with impressive packaging, both to create positive unpacking experiences and to make up for the lack of in-store displays. While this is a great idea overall, newer package designs can be more expensive, harder to ship and less environmentally friendly, if you aren’t careful.
Another thing companies are doing is providing shipping deals. To avoid sticker shock, many online vendors offer free or reduced shipping, free returns, and other incentives. While shipping deals are a great idea when structured appropriately, both reduced shipping and free returns can encourage inefficiency in ordering and shipping.
How Wineries Can Better Serve the Environment When Selling Wine DTC
Shipping wine to consumers has a higher cost, for many reasons, than your typical eCommerce product. And as we’ve seen, that cost isn’t merely financial, but can be a cost in terms of negative environmental impact as well.
We’ve recently heard and read through multiple reports that the future of wine shipping will continue to build through wine club and eCommerce orders. Since this seems to be inevitable, and thus will create even more of an environment impact while we quench our thirst for more, here are some considerations for reducing your carbon footprint even as you improve the overall customer experience:
- Boxes and packaging: Does your wine packaging use excessive material? Is that material fully recyclable, or can it be made from recycled materials? And what are the dimensions of that packaging? Your best bet is to work with a fulfillment and shipping partner to determine the right kind of boxing and packaging for your wine, which should strike a balance between avoiding breakage, impressing the consumer, controlling costs, and reducing environmental impact.
- Multiple shipping facilities: Does your logistics partner have multiple shipping facilities you can use? Multiple facilities mean fewer miles travelled for most eCommerce shipments, thereby reducing your carbon footprint. (This is so even with the initial “bulk run” to these facilities, as consolidated shipping means fewer trucks and fewer overall shipments.)
- Hold at location: Hold at location and other last-mile management tools are designed to reduce redelivery and returns. Consumers are able to get their shipments more quickly and conveniently, and delivery vehicles and carrier trucks both spend less time on the road—a clear win-win.
- Data and Metrics: How are you measuring your overall performance against industry KPI’s? More importantly, can you measure the impact of your specific shipping policies? Packaging decisions and even glass bottle weight? How about the quality of your customer lists and addresses, so that shipment notifications are reaching the right people at the right time. A clean list directly correlates to making more first delivery attempts and fewer returns. Only with objective data can you make decisions to change for the better.
- Business Partners: If your wineries core values include an environmental focus, shouldn’t you look for like minded companies to work with? Are you aligned with partners that have also made a commitment to going green? Real stories of environmental stewardship through supply chain collaboration can be a powerful message to consumers, especially as we see how important this is to the millennial buying group.
Want more ideas? Or just want to know how Copper Peak tackles these issues and promotes going green? Contact us online, or call 707-265-0100.
The Team at Copper Peak