A simple, sustainable idea

Svenska Retursystem is responsible for developing and operating an efficient reusable system that has helped to simplify and improve the distribution of goods across Sweden

For almost 20 consecutive years, the Swedish retail market has enjoyed positive annual growth, fuelled by a steady increase in its population and rising disposable income. A big beneficiary of this growth has been the food and beverage sector, with the country’s inhabitants spending approximately 12 per cent of their household budget on food and drink products, as per industry figures for SR 134 b2014. Those same figures show that the retail trade accounts for around 75 per cent of this expenditure, with the remaining coming from the food service sector.

When it comes to the retail sector, Sweden has long held a reputation for being a hot-spot for innovation and the embracing of new ideas. A prime example of a business that encapsulates these traits is Svenska Retursystem. Owned and operated by The Trade Association for Grocery of Sweden (SvHD) and the Swedish Food & Drink Retailers Association (DLF), the company was formed in 1997 to facilitate the development of an efficient reusable system for the distribution of goods.

“The unique nature of our ownership structure has helped to provide us with a great degree of stability over the years and has allowed us to take a long-term view of what is a clear mission, and that is to work alongside Sweden’s food and beverage supply chain to deliver effective and sustainable distribution solutions,” explains Svenska Retursystem’s Managing Director, Anna Elgh.

“Our first crates were delivered in 2001, and in the time since we have seen tremendous growth. Today we are delivering the same number of crates in a single day that we were in an entire year when we first commenced operations,” Anna adds. “We have grown to the point where the vast majority of the big players in our industry have specifically developed their automated processes in line with our pallets and crates, meaning that if we are not delivering, the industry grinds to a halt.”

Circular model
The system itself is based on reusable, durable crates and pallets made from recyclable plastic that help to support an efficient supply chain, from producer to wholesaler, and finally to the retailer. These crates and pallets can be used over and over, without compromising on quality.

The company’s circular business model begins with delivery to the producers, where its reusable units are filled and delivered to the wholesaler.The wholesaler then transports these to the retailer, where the crates and pallets are emptied. The wholesaler then takes the units back, returning them to Svenska Retursystem, which then instigates a process of quality control and washing in one of its four strategically located plants, before they are ready to be used again.

Additional benefits of the company’s units include the way that they are designed to protect primary packaging from impacts, thus reducing the amount of scrappage and food waste, and the fact that the materials they are made from do not generate dust or wood chips, creating a cleaner and healthier working environment. The lightweight nature of the pallets, ten kilograms less than an equivalent Europallet, helps to lower transportation costs, while the use of chemicals that neutralise the pH level of washing water reduces the environmental impact of these activities.

As you can see, the essence of this entire operation is the concept of ‘sustainability’. A life cycle analysis from 2016 revealed that the use of reusable crates reduced carbon emissions by as much as 74 per cent, compared with equivalent disposable packaging, a figure that translates to roughly 30,000 tonnes of carbon dioxide equivalent.

Responsive to challenges
With growth in the retail sector remaining relatively stable during 2017, Svenska Retursystem has focused more of its attention towards the growing food service industry. “Part of our growth strategy is to increase our presence within the restaurant, hotel and hospitality markets,” Anna states. “We have always been quick to respond to trends in our industry and having seen a big shift emerging within the food service field we recognise how important this area will be to our own future goals.”SR 134 c

Another area where SRS is proving its innovative approach is through a new investment strategy. The company takes a 40 SEK deposit on its crates from customers, which is repaid when the crate is returned. Over recent times SRS has launched a sustainable fund with its bank for this money, from which investments are made, and the fund has seen steady growth since it was created in late 2016, with SRS currently having invested more than 50m euros, and a total of more than 500m euros is now invested in the fund by all parties.

The company’s ability to respond to rapidly challenging market conditions was further evident in 2017 with the launch of its new digital platform. Dubbed SMART Pooling, it offers the food industry of Sweden improved control and simplified administration over all types of returnable transport items, such as return pallets, roll cages, wooden pallets, dairy boxes and pallet collars, as well as offering substantial savings in both time and cost throughout the complete supply chain.

“The food and beverage industry is becoming ever-more reliant of digital technology and our SMART Pooling platform is an important step forward in meeting the evolving demands of our customers,” Anna says. “It also forms part of our commitment to simplify the flow of goods in the industry, and we plan to extend this solution to more users over the course of 2018.”

Positive strides
The company is also currently working on a system of incorporating smart sensors into its units, with a pilot project having recently been completed. “These sensors will allow our customers to track the location and temperature of their goods during transit,” Anna reveals. “This is a scheme that we believe can have further important implications when it comes to sustainability and improving the efficiency of the supply chain, and therefore we continue to work very hard towards rolling this out on a much wider scale in the future.”

Having celebrated its 20th anniversary in 2017, growth opportunities for the business show no signs of abating. In response to this, and as a way of creating the needed capacity for it to manage increased demand for its pooling services, Svenska Retursystems officially opened the doors to its newest washing and distribution plant in Västerås, Hållbara Aros, in September 2017.

“The opening of our new plant represents a huge step forward for the company,” Anna enthuses. “The largest and most efficient washing facility we have opened to date, the plant will process 70 million crates and pallets annually. Being located in a logistical hub like Västerås also means that we can greatly improve our logistics network and reduce the environmental impact of our transportation activities even further.”

The ramping up of this new, state-of-the-art facility will be a big area of focus in the first half of 2018 for Anna and her team, and its very existence represents what she feels is a very bright future for Svenska Retursystem. “We see ourselves as being extremely well positioned today. We are excited about the positive strides the company is making in its digital development and will continue to make sure that we never waiver from working in the most sustainable ways possible,” she concludes.