Sustainability in Indian detergent industry
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Transcript of Sustainability in Indian detergent industry
What does sustainability mean to the Household care industry?
“The ability to improve the quality of life for this and future generations, by creating products that promote hygiene and cleanliness, are environmentally sound and are economically successful”
Definition adopted by the American Cleaning Institute
Household care industry in India
The Detergent industry is very interested and pro-active in pushingforward sustainable cleaning and sustainability in these sector is a keyissue shared by producers and consumers alike
Market size estimated at ~ US$ 3.8 billion and the sector is projected to grow 19 percent annually until 2019
Household care segments: fabric care, dish soap, surface care, toilet care, home insecticides, and air care
Laundry care (detergents and bar) dominate the segment and is marked by high penetration in both Rural and Urban India
Global
Consumption
Patterns
Need for Sustainability in the Industry
• Rapid global population growth• The rise in middle and lower-income
consumers • A culture of “consumerism”
ConsumersAwareness and concernConsumer Willingness
BusinessesInnovation (improved
products and services ) Choice influencing
Choice editing
• Global consumption pattern is putting unsustainable and increasing stress on:
• The Earth’s ecosystems - The supply of material resources needed for industrial growth
• Human social systems and well-being
Sustainable production
Sustainable Consumption
Drivers Impacts
Sustainability in the Detergent Industry - Timeline
Setting standards of emission or discharge of environmental pollutantsHazardous Waste (Management and Handling) Rules
20001986-1990
The Ozone Depleting Substances(Regulation and Control)
Plastic waste (management and handling rules)
Product StewardshipPrograms
I Prefer 30 Washing atlow temperatures
2010 20141991
Compact detergenttechnology
Removing Phosphates from All Detergents (P&G)by End of 2015
2015
2005
Charter for sustainable cleaningBy A.I.S.E
Regulatory Acts
Voluntary Initiatives
2012
2013
1950
Detergentmanufacturersswitch tobiodegradablesubstances
2011
…What next ?
UnileversustainableLiving plan
Business case for sustainability
Conditions such as population growth, an expanding middle class, urbanization, and economic growth are
contributing to an increasing demand for food, water, energy, land, and other resources - These
conditions are creating volatility and uncertainty for companies
Addressing sustainability challenges helps companies to better anticipate and understand long-termtrends and the effect of resource consumption
How important is sustainability to key market players in the industry?
Key market players in the Indian detergent industry
38%
18%15%
22%
7%
HUL
P & G
Nirma
Rohit Detergents
Others
• Fabric care is a major category accounting for 68 percent of the household care sector in India andthe fabric wash market is currently worth $ 2.8 bn
• In India HUL holds a 38 percent market share in the washing powder segment clearly standing asthe winner with its three brands-Surf, Wheel and Rin. Procter & Gamble (P&G) with Tide and Arielhas 18 percent share and Rohit surfactants holds 22 percent as per the latest industry reports
Powder67%
Bars33%
Powder Bars
Market share of Indian detergent brands
Where do they stand on sustainabilitySustainability Procedures across the Product life cycle from raw material selection to product disposal based on
A.I.S.E Key performance indicators (KPI)
Raw Material
Resource use
Production Consumer Disposal
Raw material selection and safety evaluationRaw material packaging and supplier design
Consumed energy and co2 emittedConsumed water, Packaging material used
Occupational health and safetyManufacturing environmental management system
Consumer and customer safetyConsumer and user information
Packaging usedWaste offsite for disposal
Life cycle
Easy to adopt with some actions needed
Key market players in the Indian Detergent industry
On Radar Not Enough information available
Key sustainability issues across the value chain
Health issues related to chemical ingredients
Use of non renewable petrochemical surfactants
Safeguarding of water resources
Energy consumed by the use of detergents
Carbon footprint across the value chain
Supplier
Transport
ManufacturingPackaging
Use Phase
Disposal
Industry specific sustainability issues across the value chain
60 – 80 percentage of energy during laundry life cycle is consumed in the in-use phase
Ingrdients Formulation Packaging
Distribution use Phase Disposal
Cradle to Gate
Distribution of energy demand/carbon consumption throughout the life cycle of a laundry cycle
Technological innovation is a key means of achieving cleaner production
and sustainable industrial growth
Sustainability via the Bio based economy
Conventional technology
Pollution(e.g.,Co2, toxicity, water Consumption)
Economic development (e.g. GDP)
Eco efficient Enzyme Solutions
LCA supports cold wash Enzymes
-100
-80
-60
-40
-20
0
20
g C
o2
em
issi
on
g Co2 emission per wash
Enzyme use (low Dose) Electricity savings
850
900
950
1000
1050
Standard detergent Standard detergent Standard withaddition of extraenzymes( Dosage
level 1)
Standard withaddition of extraenzymes( Dosage
level 2)
Tota
l Rem
issi
on
at
46
0n
m
Performance of standard detergent and enzyme added detergent at 40°C and 30°C
• The standard detergent performed better at 30°C than at 40°C with just a small increase in enzyme concentration
• The positive impact of washing at 30˚C is almost 100 g less CO2 emissions per wash. Looking at electricity consumption for heating wash water, the enzymes save 20 times as much energy as it takes to produce them
Life Cycle Assessments (LCAs) are the method to scientifically document sustainability improvements of the product value chain
Using LCA, the environmental impacts of four different washing situations on machine washing laundry at 40°C and 30°C – a European standard detergent containing 0.4% Savinase®8T was tested at 40°C and 30°C, and the same standard detergent at 30°C but with the addition of extra enzymes designed for cold-water washing
Enzyme Industry – An overview
• Enzymes were proteins that catalysed biochemical reactions and were derived from micro organisms such as bacteria,fungi and yeasts
• Enzymes are used in many environmental - friendly industrial purposes and find their applications in various sectorssuch as Food and Beverages, Detergents, Biofuels, Animal Feed, Leather, Textile, and Paper and Pulp
• At present, almost 4000 enzymes are known, and of these, approximately 200 microbial original types are usedcommercially however, only about 20 enzymes are produced on truly industrial scale
• Developing economies of Asia-Pacific, Eastern Europe, along with Africa, and the Middle East regions emerged as thefastest growing markets for industrial enzymes
• India currently has a marginal share in the global market for industrial enzymes that is estimated to reach about US$ 4.4billion by 2015
.
50%
20%
20%
5% 5%
Pharmaceuticals
Detergent
Textile
Food and Feed
Leather and Paper
Sector wise demand for enzymes
• Novozymes long term target includes delivering biological solutions to 6 billion people by 2020 and save 100 million tons of CO2 a year through their product applications
• Deliver 10 transformative innovations that really change the lives of many people and fulfill ambitious sustainability goals
Novozymes – Market leader in Industrial Enzymes
• The Company’s vision is to create necessary balance between better business, a cleaner environment, and better lives• In 2014, customers reduced their CO2 emissions by an estimated 60 million tons through the application of Novozymes products, equivalent to taking
25 million cars off the road• Novozymes is committed to the UN Global Compact principles as a LEAD Member and takes an active part in the U.N.-led Sustainable Energy for All
(SE4All) initiative
Vision and Sustainability
• In 2014, Novozymes has strengthened its position as the world’s leading producer of industrial enzymes with an estimated 48 percent of the global enzyme market share.
• The Company sales revenues in 2014 were reported to be DKK 12,459 million a 6 percent increase compared to the previous FY2013• Sales to the Household Care industry increased by 3 percent in DKK compared with 2013. Sales in Europe and emerging markets were the most
significant drivers of global growth in 2014
Business Performance
Targets and Outlook
Novozymes is the world leader in biological solutions. Together with customers, partners and the global community, we improve industrial performance while preserving the planet’s resources and helping to build better lives
Business
• Industrial enzymes, microorganisms, andbiopharmaceutical ingredients
Novozymes – Revenues by industry and market share
Others52%
Novozymes48%
35%
18%26%
14%7%
Household Care
Bioenergy
Food & Beverages
Agriculture & Feed
Technical & Pharma
4353 3%
2270 19%
3278 3%
830 10%
1728 4%
Revenue by Industry (DKK million) Global market share of Enzymes
Current trends in the Household care industry
Current trends
Growth Drivers
Growth barriers
• Better-performing laundry detergents – also at low temperatures
• Optimization of detergent formulations to decrease cost and cost volatility
• More sustainable operations and products• Changing consumer preferences toward liquids
and compacted products
• Innovation to raise detergent performance at lowtemperatures, increase sustainability and optimizeFormulations
• Demand for better-performing products in emerging markets
• GDP and population growth in emerging markets
• Sustained low input costs that compete with enzymes for share of COGS
• Traditional consumer wash habits• Regulations favoring surfactants over enzymes in emerging
market product standards• Technology development needed to enable enzyme
performance in liquid detergent formats
Household care
TAR
GET
S
Processes&
Products
Primarilynon-technological change
Primarilytechnological change
Eco-innovation
Modification Re-design Alternatives Creation
MECHANISMS
Higher potential environmental benefitsInstitutions
Organisations&
Marketing methods
Sustainable Production calls for multi-level eco-innovations
The target of the eco-innovation can be technological or non-technological in nature. Eco innovation in products andprocesses tends to rely heavily on technological development; eco-innovation in marketing, organisations and institutionsrelies more on non-technological changes
sustainable laundry behaviour goes beyond switching to 30ºC
The Detergent industry presents several sustainability challenges. Research and analysis from various sources
suggests we need to move beyond a focus on technological efficiency and isolated changes in behaviour to look
more closely at the interconnected activities driving unsustainable household consumption
• 72 percent of consumers look for advice and commitment on sustainability for detergents
• Communications clutter also emerged as an issue: less people read the information on packs but, when
asked, consumers believe that there is sufficient or even too much information provided
• The homecare industry has a responsibility to educate and inform consumers about its products
Consumers Perception by region
0 10 20 30 40 50
Low awareness/ understanding
Perception of high cost
Perception of reducedquality/performance
Perception that the green label is amarketing gimmick
Lack of interest in green issues
Lack of affinity/loyalty towardsgreen brands
Not enough Products on themarket
Asia EU North America
Green Issues that consumers find most important when considering/Purchasing detergents
Biggest barriers to consumers purchasing more Greenproducts
2
1
3 1
2
3
0 10 20 30 40
Lower temperature
Shorter cycle
Less Packaging
Natural Ingrdients
Locally produced
Less Pollution
Asia EU North America
Actions (Non technological) needed to improve the sustainability profile
of the industry
Sustainability marketing strategies should aim towards improving the awareness of consumers to use the product in an informed/sustainable way
Existing mechanisms such as Eco labels and safe use tips provided on the pack are fraught with confusion or consumers believe that there is sufficient or even too much information provided
Tips for saving water, energy, co2 and money
Need for standardisation
Raising awareness and influencing consumer purchase decisions
towards more sustainable choices in the laundry detergent arena
More often consumer purchase decisions are influenced by comments, opinions, and experiences
90%of consumers trust
recommendations from
family and friends
Word-of-mouth Push marketing
Independent retailers connect with customers frequently with a significant percentage of shoppers visiting weekly
Shopper Frequency
Retailer BUY Customer
Market awareness and benefits about
sustainability products
Key Insights
• A growing global population with a rising need for food, water, energy and other commodities is pushing industries to get smarter and produce more with less
• Business-to-Business consumers are concerned about the reputation of those with whom they do business. For business-to-consumer companies, the focus in India has been on promoting responsible usage of products to limit the life cycle impact of the product
• Recent innovations in Enzymatic technologies provide a natural solution for addressing the market demand for cheaper and cleaner alternatives
• Companies which innovate in a sustainable development perspective must implement a combination of process innovations, product innovations, organisational innovations and market innovations among which priorities are established pragmatically, in view of opportunities and constraints
• Consumers behaviour remains a key factor in making washing even more sustainable. Raising consumer awareness about the benefits of sustainable products will allow consumers to make informed choices
• The sustainability roadmap of the Indian detergent industry in the future will be shaped by Collaboration, competition and novel innovations
“There are no passengers on spaceship earth. We’re all crew.”— Marshall McLuhan
Contact:KrishnaChandranSustainability consultant
@krizhnah