A winemaker, a courier and a manufacturer: three very different experiences with sustainability and how it can make or break you.
The first thing you notice when you pass through the cellar door at Heron’s Flight restaurant and winery—apart from the vast selection of red wine varietals tempting your taste buds—is the view of the Tamahunga Ranges and the Matakana Estuary river valley. The sense of sustainability in the air is so strong you can almost inhale it.
All-day sun streams due north into the packed restaurant, the fine wine flows, award-winning slow food is abundant and José González hums lazily from the speakers. It seems like the perfect recipe for success. So it’s hard to imagine that until a few months ago Heron’s Flight was in dire financial straits: a classic case of sustainability gone bad, resulting in a 55 percent share of the restaurant business being bought by foreign investors.
Since its inception in 1987, sustainable and ecological principles have underpinned Heron’s Flight’s operations: locally sourced food, onsite waste and water-recycling systems, energy-efficient practices and thriving acreage biodiversity. So it was hardly surprising that the latest major investment by founders David Hoskins and Mary Evans—the construction of a new winemaker’s centre, cellar door and restaurant in 2006—was an all-out sustainable extravaganza. Understated yet ambitious, the new cellar door is directly north-facing so the building can cool and heat itself. There are solar panels, recycling and composting systems, sustainably sourced building materials and not a hint of plastic or aluminium.
“We consider ourselves more educators than winemakers,” says Hoskins, “so while the new building itself served as a physical embodiment of sustainability, equally important was that the new venue be a medium to provide a stimulating environment from which we could educate patrons about sustainable living and promote locally made products.”
How then did living the dream almost ruin the financial livelihood of Heron’s Flight—and are there lessons here for other small businesses?
“We have pretty much been on the back foot ever since we opened,” says Hoskins, who took out a second mortgage and sold a 55 percent stake of his restaurant business in order to finance the construction of the building.
Who’s to blame? For a start, according to Hoskins, substandard local body authorities and backwards council regulations. Gaining council consent for what Hoskins calls “off-the-wall sustainable practices” took more than a year longer than anticipated and led to significant cost overruns.
And this despite his sustainable visions being massively dumbed down. Plans he had for the building’s structural features were vetoed by the council in favour of less sustainable yet more expensive options. “We didn’t even want cedar,” says Hoskins, pointing at the overhead beams. “We wanted local macrocarpa but the council said, ‘Sorry, mate, they only have a lifespan of 25 years—not long enough in terms of what you’re doing—so your choice is steel or cedar.’”
He also encountered the same antigreen red tape when attempting to affix solar panels to the restaurant’s roof to fuel its high hot-water consumption. Hoskins says private residences wanting to install a solar panel can get a subsidy from the government but that didn’t apply for businesses. “There were no subsidies, not that we knew of at that time.”
Added to the anti-progressive government policies, was there also an element of suicide by sustainability? Like many Kiwi business owners, Hoskins and Evans are low-key and nonconformist. When asked whether they had marketed Heron’s Flight’s sustainable initiatives to the broader public, Hoskins response was simple: “We don’t tend to like to blow our own trumpet.” Hoskins couldn’t even bring himself to enter local sustainability awards. “We have certain values... We wouldn’t do it any other way.”
Their reluctance to promote their green bent to gain credence is extreme. “There’s no point in using sustainability as a marketing tool,” says Evans, “as everyone is going to have to do sustainability sooner or later, so the brand just becomes devalued.”
But it could be argued that gaining zero mileage out of their sustainability actions is not a very sustainable business strategy. Those values essentially cost Heron’s Flight a lifeline, and the founders a majority share of their own business.
“The reason we are not rich?” says Hoskins. “We have never really looked at the business aspects of running a business.”
In contrast, New Zealands’s leading carbonneutral courier company Urgent has long considered financial stability as a vital ingredient for business and sustainability to successfully coexist.
Managing director Steve Bonnici makes no bones about it. “It’s simple: if you can’t pay your bills, you’re not sustainable.”
Sustainability issues first surfaced at Urgent following some intense competition in the courier space in the late 90s, which drove courier revenues down so much that some of Urgent’s contractors were going bust. “We started to recognise that as a real threat to our ability to grow.”
Urgent raised prices incrementally to ensure higher wages for its couriers and implemented programmes teaching its contractors how to operate like small businesses, making them aware of their financial and tax obligations. Once financial sustainability was secured, Bonnici then focused on other aspects of sustainability— the ones that benefitted his drivers and the environment.
Urgent’s biggest environmental impact was a nobrainer, says Bonnici, “with all those cars driving around out there. Initially we thought there wasn’t much we could do,” he says, but the guilt of being a reasonably large emitter meant Bonnici figured it was better to at least be trying something than doing nothing.
A marketer, he also saw a potential differentiating point. In the late 90s the company trialled bio fuel, increased its bicycle fleet (which it subsequently whittled, demand eroded by the rise of email) and encouraged couriers into more environmentally friendly vehicles. “That was all pretty unsuccessful, really,” says Bonnici. “There wasn’t really anything available on the market at the time that fitted the cargo capacity we required at a price point we could afford that was environmentally efficient.”
“You don’t want to be overly green. Your product must still be similar in quality , price and just as accessible as those of your competitors ””
In 2002 Bonnici decided he needed to do something “more aggressive”. The company joined the carboNZero programme, offsetting all driver emissions and making it New Zealand’s first and only carbon-neutral courier company. In 2008 Urgent established stringent acceptable-fleet-vehicle criteria. To facilitate new vehicle uptake, Bonnici sourced a fleet of fuel-efficient Honda Jazzes and financed couriers into them on 100 percent loans. That year the number of Jazz drivers in the fleet jumped from 25 percent to 50 percent. Today it’s 65 percent and growing.
Urgent is also developing ambitious dispatch technology to increase route efficiency and has partnered with the Auckland City Mission to volunteer its courier services for major appeals collections. Urgent also provides staff with free gym facilities and health checkups, realising it was taking “reasonably fit people and fattening them up on the job”.
For Boccini, it’s about getting the business model right first. Urgent’s sustainability initiatives do cost money. Offsetting carbon alone costs $30,000 a year but Bonnici says “our differentiation in a crowded market is well worth it”.
Urgent recently snagged multiple wins at the Sustainable 60 Awards and is rewarded by custom from those looking to decrease their own environmental footprint. “It would pretty much be a brand assassination exercise if we decided not to do it now because it is so intrinsically linked to our brand—people recognise us as the carbon-neutral couriers,” says Bonnici.
But he emphasises that sustainability is only as good as the quality of the service you provide. “You can’t charge a premium, but if everything else is equal then increased sustainability might make a difference.”
Ecostore shares similar views. From a small mailorder company in Northland to gracing the shelves of over 150 drug stores in Manhattan, with adverts beaming from Times Square and Las Vegas billboards, Ecostore is clearly doing something right in the sustainable business space. Hailing from an eco-family background, living a life of what he terms “voluntary simplicity”, Ecostore founder Malcolm Rands practically has sustainability flowing through his veins. An eco-hippie up against large multinational conglomerates, Rands attributes Ecostore’s success to simplicity with an twist. “You really can’t be part of the pack—you’ve got to have an edge of some sort or the big boys will smother you.”
Rands says eco-success is having elegant products that solve a problem and are superior to others on the market. He takes this a step further and looks for the simple solutions in all areas of business, from supply-chain management to packaging. For example, he sources materials with multiple applications and credits this as a key business practice. “People tend to overcomplicate business but it is the elegant, simple ways of doing business that are the most effective.” Perhaps ironic coming from him, Rands’ second lesson is: “You don’t want to be overly green.” He recognises that while people like making environmental choices, “your product must still be similar in quality, price and just as accessible” as those of your competitors.
So there’s business savvy to Rand’s model, but he emphasises the greatest challenge to running a successful sustainable business is the consumer. Your business is in the hands of the customer and its success hinges on that, not the degree to which you are an ecowarrior who lives and breathes every sustainability rule. Rands is philosophical and sees that ultimately, sustainability struggles are less about the business and more about current values and messed up pricing differentials that the consumer hasn’t yet grasped.
“People today expect to be able to buy anything they want in life out of one pay packet ... that’s what you’re are up against,” he says.
While the initial cost outlay for Ecostore products are more expensive, for example, Rands claims that on a per-wash basis they are actually cheaper than the competition and are better for the planet. In buying conventional low-cost products, he says, people are not paying the true cost to the environment and that cheap breeds greed. “Consumers are being subsidised by the planet … so is it cheap or is it incredibly expensive?”
Using food as an analogy, Rands says he’d much prefer to eat a small amount of beautiful food than “one large portion of shit” priced the same. “We can’t keep going along that track; it is a false business model.”
For Rands, the winning formula for a successful sustainable business has little to do with one’s ambitions and values, and more to do with a businesssavvy model and delivering superior quality. And that’s a good lesson for any business, green or not.
Rosie Bosworth is a PhD student and freelance writer
Getting your business on the greenwave
• Financial stability is crucial to sustainable development. Ensure that even if your environmental initiatives might not bring in additional revenue, they aren’t going to break you either.
• Leverage your sustainability initiatives into marketing and promotion. There’s no money in being coy.
• Baby steps are better than no steps. Start with the low-hanging fruit then build on your environmental performance.
• Trim the fat where it counts.
• Don’t try to be everything to everyone. Concentrate on where your business can make the biggest impact.
• Create environmental benchmarks for yourself.
• Remember from a consumer perspective, sustainability is only as good as the quality of your product.
• Create an environmental or sustainability strategy for your company. Where do you see yourself in five years? What steps do you need to take to get there? Measurable goals are the only way to measure progress.
• Establish an acceptable sustainable performance policy for the business. • Get buy-in from your employees. Spend time educating them about the long-term paybacks.
• If the cost of transitioning towards sustainable options is an issue, establish financing options to speed the uptake of more sustainable practices.