Sustainable Innovation in the Chemical Industry

Value chain collaboration is indispensable to tackle global challenges
Sustainable Innovation in the Chemical Industry Sustainable Innovation in the Chemical Industry
Publ. date 9 May 2016
Innovation is quite essential for organizations that compete in rapidly changing markets being under pressure of for instance shifting customer demands and global challenges. But a strong culture of innovation is not an easy feat. Data research on innovation in the chemical industry reveals that 49 percent of chemical organizations recognize that establishing an innovation culture is a challenge for their organization. The underlying reasons for the struggle of chemical companies are related to the number of projects and long decision paths before an innovation is actually implemented. So how can organizations overcome this hurdle?

A first step is to look at an organization’s capabilities in strategic partnering. Addressing sustainability issues in an effective and efficient way cannot be done in isolation and requires partnering. Partnering can take various forms. Collaboration with suppliers, customers, or other stakeholders can become an essential differentiator to turn sustainable innovation into tangible business opportunities. In parallel, customer-driven innovation is becoming a frequently used tool for defining the organization’s new products and services. The insights of the customers can be function as useful input when integrated at the right time in the innovation cycle. Referring to the chemical industry, about one in five chemical executives say their companies are already involved in strategic partnering for example by co-creating products and services.  But to match top innovators across industries, more is needed.

Food waste: feedstock for chemical innovations

Food waste is a major global challenge, affecting the entire value chain. According to the Food Authority Organization, about one third of food is spoiled before it even reaches the final consumer. Losses in food represent a waste of resources used in production, such as energy, water and an increase in green house gas emissions. Hence, food waste is the source of many other challenges.

As discussed in Davos during the World Economic Forum, the amount of wasted food must be halved by 2030. Looking at the composition of the food value chain, chemicals function as a building block. Simply stated, all food contain chemical substances in some form.  Therefore, alarm bells should set off in the chemical industry for the simple reason that food waste is an issue with its potential solutions in the hands of chemical production firms. Food waste serves as a valuable resource for the production of chemicals.

The case of Velcorin: avoiding wasted beverages

Looking at the beverage industry, manufacturers are increasingly faced with tough challenges. On the one hand, new types of drinks, that include additional health benefits, have to be developed. On the other hand maintaining high production standards and ensuring drinks are protected from spoiling is of utmost priority. A practical example of a product that reduces food waste and contributes to consumer’s health, is Velcorin.

Velcorin, developed by German chemical company LANXESS, is a microbial control agent used in wine, beer and non-alcoholic beverages. Comparing it to other preservatives, Velcorin is non-persistent and therefore does not affect product taste, aroma or colour, resulting in less spoiled beverages. Additionally, the application of Velcorin enables drinks to be flavoured faster. As a result beverages have reduced warehouse holding times resulting in a quicker to market launch.

With more and more countries approving Velcorin as a product in the stabilization process of beverages, strategic partnering is essential to strengthen the market position. As a result, LANXESS cooperated with organizations in the value chain. Strategic partnering, in the fields of sales and technical support, enabled LANXESS to demonstrate societal, economic and environmental relevance and therefore turned Velcorin into a material business opportunity.

Is your company ready to innovate?

With its broad experiences in the field of sustainable innovation processes, Finch & Beak helps address global challenges, such as food waste. In the past, Finch & Beak was involved in research projects on sustainability in the wine industry for instance with a case study for IMD Business School in Lausanne on Bodegas Torres and how their sustainability is integrated into their core business.

If you are looking for practical guidance on how to get sustainable innovation going in your organization, call Josée van der Hoek today at +31 6 28 02 18 80 or email her: josee@finchandbeak.com

Image source: Iwan Wolkow, Flickr

About Bas Nuijten

Sustainability professional aiming to help organizations to continuously improve their sustainability strategies. | 
bas@finchandbeak.com

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