In 2008, Fetzer Vineyards redesigned its bottling process to use a more lightweight bottle by reducing the thickness of the glass and removing the "punt" or indentation at the base of the bottle. The result was to reduce the weight of each wine bottle from a little over 20 ounces to 17 ounces, for a 16% reduction in the amount of glass used per bottle. This reduced the overall glass usage by 2,173 tons in a year in which the company produced about 23 million bottles of wine.
Reducing the weight of each bottle also reduced the amount of energy needed to produce it, the amount of fuel required to transport it throughout the supply chain, and the energy needed to landfill or recycle the bottle after consumption. The result was a 14% reduction in annual greenhouse gas emissions, or 2,985 tons of CO2 equivalents in the supply chain.
Dr. Ann Thrupp, Fetzer's sustainability manager in 2008, was quoted as saying: "Lightweighting our bottle is a double-bottom line innovation good for the environment and for efficient operations that supports our goal of being a sustainable business." (www.sustainablebrands. com/news_and_views/articles/fetzer-bottles-wine-lighter-weight-glass)
Required:
1. Compute the annual savings in direct materials costs (glass) assuming a price of $50 per ton of glass.
2. In addition to the direct materials cost savings, would Fetzer realize any other economic benefits from this initiative? Explain.
3. What did Dr. Ann Thrupp mean by "double bottom line"? What would make it a "triple bottom line"?