Green planet

Closing the loop in two Polish cities

A key area of focus for Żabka during 2023 was promoting the uptake of the principles of the circular economy among our customers. As such, involving them directly in our efforts to collect recyclable packaging was an especially important priority under our Responsibility Strategy’s ‘Green planet’ pillar.

One of the primary new means of making it happen is the ‘Green Renewal’ campaign we piloted during the year in Zielona Góra and in Bydgoszcz collaboration with the Bydgoszcz City Hall. As part of this, customers in those two Polish cities can return to our stores PET plastic bottles with a capacity of up to 2 litres, or metal cans of up to 1 litre.

Rewards for making returns
As part of the test each customer returning a single-use beverage container receives żapps points or a discount on the next drink in a PET bottle or can.

According to Krzysztof Jańczak, a store franchisee in Zielona Góra, ‘Everything to do with ecology, including green waste collection, has always been important to me. So I was really happy to hear about Green Renewal, as were my customers. The response to the new initiative was fantastic in just the first few days, and I look forward to it continuing to improve as we develop it further.’

We also encourage our customers to return empty plastic bottles and beverage cans by providing a total of more than 70 ‘EKOmat’ waste-collection machines. They are located on the premises of selected Żabka stores or in their direct surroundings. In addition to Bydgoszcz and Zielona Góra – where, as part of the "Green Renewal" pilot project, beverage packaging collection is carried out both using waste-collection machines and directly at the shop assistant - customers can also use ‘EKOmat’ in Łódź, Poznań and Warsaw.

Strengthening environmental awareness
Joanna Kasowska, Director of Quality and Food Management Standards, is excited by the pilot. ‘Responsibility is one of the key values embedded in our DNA at Żabka Group,’ she says. ‘As well as making life easier for our customers, we want also to positively impact our company's stakeholders and the community as well as the natural environment. So an important aspect of the pilot is how it strengthens consumers' environmental awareness, enabling them to dispose appropriately of packaging waste and helping them to understand the idea of recycling as a step towards establishing the circular economy.’

Reusable cups cut disposable waste and bring benefits to customers

At Żabka, we have long served 100% Italian-roasted Arabica coffee and other hot drinks through our stores. The quantities involved are significant, now totalling around 24 million cups sold every year through more than 10,000 outlets, as Żabka makes up the largest coffee chain in Poland.

In an important new move in 2023, we acted to reduce disposable waste while simultaneously cutting costs for consumers through the introduction of our ‘green reusable cups’ (#Zielonykubek wielorazowy) scheme.

Safe, recyclable, reusable…
This involves customers buying a safe, recyclable and reusable cup, made from natural raw materials and FSC®-certified wood, for PLN49.99. Then, every time they use it, or other reusable cup to buy a hot drink in a Żabka store, they receive a PLN 1 discount.

According to Joanna Kasowska, Director of Quality and Food Management Standards at Żabka, ‘This is the way, we want to encourage our customers to foster a culture of reusing objects and reduce the use of these disposable items. It is a simple way to actively participate in the fight against environmental pollution and promote circular solutions. By supporting such initiatives, as consumers, we can also contribute to changing behaviour and raising awareness about environmental protection’

Protecting natural resources, nature and the environment
Żabka aims to ensure that wherever possible our coffee sales have a broadly positive impact. Our coffee is certified by the Rainforest Alliance, meaning we and our customers support the rights and wellbeing of farmers while protecting natural resources, nature and the environment. With our new scheme in place, we’re set collectively to prevent many, many thousands of cups from becoming disposable waste. Our record is selling 72 cups of coffee in one minute, so bringing more and more people on to the scheme will make a very substantial difference.

Using electric vehicles to reduce carbon footprint

An essential task that we at Żabka Group have set ourselves as part of our decarbonisation plan is to work towards reducing emissions across our value chain. During the years since 2021, we’ve therefore been following the route set out in the plan to reduce the environmental impact of our vehicle fleet.

Our actions were focused more sharply than ever in 2023 on hitting our target of reducing close to 0.6k tCO₂ in 2026 from the current forecast by replacing 203 vehicles between 2024 and 2026. According to the Head of Indirect Procurement & Administration, Agnieszka Przybylska, ‘We’ve taken several important steps towards reducing our carbon footprint particularly in those cities and regions that are most exposed to air pollution.’

She highlights various initiatives across the business, including the use by the Żabka’s field salesforce of 500 Toyota Yaris Cross hybrid cars in their day-to-day work, which of necessity involves much driving. These make up a substantial number of the 900 full-hybrid and 300 plug-in hybrid vehicles in our fleet.

Infrastructure is clearly another essential element of any successful programme to encourage and enable the uptake of electric vehicles, which is why we have invested in electric charging stations at our Poznań headquarters and logistics centres in Nadarzyn and Plewiska. Perhaps even more important, we’ve also installed electric charging points at the homes of employees using electric cars and plug-in hybrids.

We also operate more than 30 zero-emission fully electric cars, which are provided to those employers who’ve voluntarily joined the company’s ‘Electromobility Ambassadors’ programme – a special initiative that started in 2023, in which our volunteers test and champion the benefits of electric vehicles to their colleagues. Anna Sobczyńska, Lead of Brand Strategy explains how joining the ambassador programme has influenced her daily routines, ‘Since joining the Electromobility Ambassadors and switching to an electric car, my daily commute has greatly improved, primarily due to the availability of free parking spots, the use of bus lanes and the convenience of having charging stations at the office parking lot. The transition to an electric vehicle was surprisingly easy thanks to to the training organized by the administration department, but also the community of ambassadors who are willing to share experiences and good practices.’ As Anna points out, ‘Being part of the ambassador programme not only provides comfort in the daily commute, but also a sense of uniqueness and setting the direction for positive change in the organisation.’

Michal Hodowany, Lead of Transport Department proves that electric vehicles are not just for office workers: ‘This is already the 11th company car in my career. I estimate that during business trips I have traveled close to 1.1 million km, however, these 15,000 km that I covered with an electric car is special. Since I joined the Electromobility Ambassadors, business trips have become more pleasant. Thanks to the fact that I don't hear the engine while driving, I can enjoy the silence, and planning charging and stops before setting off on a trip has made my journeys more peaceful.’

Every Ambassador undergoes special training to help them make the transition to electric vehicles as easy as possible. We also plan to develop mentors on the subject, who will inspire more people with their knowledge and enthusiasm.

This is far from an isolated initiative. ‘Over the last two years, we’ve also trained more than 700 people in economical driving, as well as providing safe-driving tuition,’ Agnieszka adds.

Franchisees compete to reduce energy consumption and cut carbon footprint

Following our ambitious goals set out in our Responsibility Strategy, we continued during 2023 to carry out the actions defined in our Decarbonisation Plan.

Obviously, given the nature of our business and the way we are structured, the plan’s scope extends far beyond our own operations to embrace our network of more than 10,000 stores. With a value chain of this sheer scale, it is inevitable that we have the capability to deliver a significant positive impact if we can come up with the right initiatives to save energy across sufficient numbers of outlets.

It was with this in mind that on 1 June 2023 we launched a competition among our franchisees to see by how much we could collectively reduce energy consumption from 2022 levels across the store network.

Efficient and effective
According to Łukasz Kawka, Head of New Technologies and Development Department, ‘We decided the summer was the best time to attempt this: many customers come to us just to buy cool drinks or ice creams. Along with the need for air-conditioning when the weather’s hot, this elevates the use of refrigeration. That makes it really important to ensure that fridges, freezers and aircon units are all in good condition to be at their most efficient and effective, and that external store doors are kept shut.’

We invited franchisees to commit to using at least 10% less electricity than they did between 1 June and 31 August 2022. To encourage them, we offered a range of prizes, including cash prizes and attractive store amenities such as electronic price tags, a new Merrychef oven, a new coffee machine and a deep cleaning of the store.

Rising to the challenge
These, allied with the sense of challenge and the desire to cut energy usage, persuaded franchisees running a total of close to 3,000 stores to qualify for the competition. We gave them all guidance on how to achieve the biggest savings, from setting the aircon to 23 degrees, closing the store doors on days with an external temperature of 27 degrees or more, maintaining air flow around freezers and refrigerators, regularly cleaning ventilation grilles and more.

Overall, it was a highly successful initiative, with an energy saving of close to 1.9GWh over the three-month period. As a result, we made awards to 126 top-performing franchisees. And we ran a second edition of the competition between November and December, which in turn delivered a further saving. In total, through the two editions of the competition together we have saved an impressive sum of over 2.7GWh. With energy savings of this magnitude, we managed to avoid emissions of 1 957,56 tCO₂ in our Scope 3.

As Katarzyna Wanat-Lipowska, Head of Decarbonisation says, ‘It is very satisfying to witness such large reductions, and we are proud of our franchisees. The result that has been achieved is the outcome of changing everyday practices for the better. This reminds us that participating in the competition is not only about attractive prizes but also about reducing the carbon footprint of our value chain to help make life better for everyone.’

Driving new efficiencies in our Transport Department

Transport has always had an essential role to play in our value chain at Żabka Group – and during 2023, it once again had a key role in our decarbonisation efforts.

The sheer scale of our logistics operations means that everything we can do to reduce the environmental impact of it will have a significant positive outcome. That’s why, over recent years, we have been steadily increasing the proportion of trucks operating in deliveries to our stores that meet the stringent demands of the Euro 5 and Euro 6 emission standards, up from just over half in 2020 to reach 76.61% during 2023.

Reducing the use of dry ice
This shift provides the background to a range of further initiatives designed to reduce the carbon emissions in our logistics. By the end of 2023, more than half of our stores were receiving dedicated refrigerated and frozen deliveries via an expanded fleet of refrigerated vehicles, which is enabling us to significantly reduce the potentially harmful to the climate use of dry ice in our logistics.

‘We achieved many ambitious goals in 2023, all thanks to the determination and professionalism of our exceptional transport team,’ says Director of Logistics Katarzyna Słabowska. ‘I’d also like to thank our warehousing colleagues for their help in meeting shared goals. We’ll achieve even more together in 2024.’

Small gesture, great impact

It’s a remarkable fact that a returnable glass bottle is used on average between 15 and 26 times, significantly reducing the carbon footprint during its lifecycle.

This is why during summer 2022 Żabka Poland ran an educational programme to encourage customers to bring empty returnable beer bottles back to our 8,400+ stores. Anyone doing so received a 50 gr price reduction on a full replacement bottle, up to a total of 20 bottles per transaction. We noticed year-on-year increase in returns by 10 p.p.

This is particularly heartening because the positive impact of any
increase in the re-use of glass bottles is significant.www.browary-polskie.pl/wp-content/uploads/2021/07/butelka-zwrotna_-
infografika.pdf According to The Union of Brewing Industry Employers – Polish Breweries, producing one ton of glass consumes on average 800kg of sand, 280kg of calcium, 230kg of soda and 30kg of dyes. It also takes an average 1.1 MW of power per bottle. The fact that we at Żabka reach millions of customers across Poland every day enables us to have a significant impact on consumer habits across many areas. This promotion shows how important even small gestures can be to the environment when made en masse.

The second life of packaging

As part of our ‘Green Renewal’ pilot project, implemented in partnership with the Bydgoszcz City Hall, our customers can return disposable beverage plastic and aluminium packaging in 120 Żabka stores across the city. The collected raw materials will be used to create new packaging, thanks to which less waste will be sent to landfill. The campaign also aims to build environmental awareness among customers and develop the habit of returning plastic and aluminium beverage packaging. Our advantage lies in the proximity of the stores: the multiple collection points, and the ease and speed involved in returning the packaging. We are also rewarding customers for their pro-ecological attitude: for every plastic bottle or aluminium can returned, they receive 50 żapps. There are two ways to return packaging: via special butelkomat machines for selective waste collection or it is possible to return the packaging directly to the salesperson, who will also award the bonus żapps.

Circularity

Our suppliers of goods and services are responsible for 68% of scope 3 carbon footprint emissions, which is why we involve partners from various industries in search of innovative solutions to reduce emissions in the value chain. An example is cooperation with the carbon neutral brand Goodvalley, whose products have a zero carbon footprint, and Grupa Żywiec, which uses only electricity from renewable sources in its production process. We also look for emission reduction opportunities through convenienct services, as we reduce emissions through delivery to pickup points in cooperation with InPost and other logistics operators in Poland. Delivering a parcel to Żabka generates a lower carbon footprint than direct delivery to the customer personal address. By encouraging conscious food choices, we are also expanding the range of plantbased products as an excellent alternative to animal products. We have introduced products of such brands as Garden Gourmet, Dobra Kaloria or Alpro. In 2021, we also created our own 100% plant-based brand, Plant Hunter.

Lowering GHG emissions in own operations

We approach the issue of reducing CO2 emissions in a comprehensive manner. In 2022, are focus was on driving down emissions in own vehicle fleet and energy efficiency.

We progressed with decarbonisation of own fleet of around 1,600 passenger cars by taking on 500 new Toyota Yaris Cross hybrids. They are used by field employees who historically consume significant amount of fuel due their type of work. In addition, we have invested in our own charging stations for electric cars at our Poznan headquarters and logistics centres in Nadarzyn and Plewiska to support employees traveling with electric vehicles. In addition, we organized a competition for energy efficiency ideas for franchisees and employees, which received 999 entries, mainly related to areas of equipment, lighting and heating. We also initiated the construction of two photovoltaic power plants in the Gliwice and Radzymin distribution centres. For consecutive year, 100% of electricity in own operations comes from renewable sources.

Reducing environmental impact across the value chain

In 2022, we introduced the first climate neutral product of our own brand - Od Nowa water. By calculating its carbon footprint, we managed to ascertain the emissions that arise in the product life cycle. We then reduced the carbon footprint as much as possible - using bottles from recycling, which have a lower carbon footprint than bottles made from virgin materials and supplying energy from renewable sources for a half of the Żabka stores. However, it was not possible to eliminate all the greenhouse gas emissions arising from the life cycle of Od Nowa water, so we neutralised the remaining emissions by purchasing offset credits. Apart from environmental impact of products sold in Żabka stores, we also care about the place itself. In 2022 in Poznań, Żabka opens its first Eko Smart store - a laboratory of ecological innovations enriched with smart solutions, e.g. green energy – PV panels, new innovative perovskite photovoltaic installation on the wall, refrigerators with glycol-filled shelves for better efficiency. On top of that, the entire wall is covered with plants to produce oxygen and digest harmful substances. Customers are also encouraged to use butelkomat - a machine for collecting plastic packaging and cans for recycling.

Electric vehicle fleet in the pilot phase

We are implementing a pilot phase of the programme under which heavy goods vehicles will be procured in partnership with two entities. Since 2019, we have been testing zero-emission commercial vehicles in cooperation with the Volkswagen Group. We use four electric ABT transporters and two e-Crafter vans. We have also invested in our own electric car charging stations at the distribution centres in Nadarzyn and Plewiska, and in our headquarters. In 2021, we started cooperation with Volvo Polska, testing a zero-emission refrigerated Volvo FL Electric truck. It is used for delivering goods to stores in the Silesia region. It is the first fully electric distribution truck in Poland that was for working in the city. We are also gradually modernising our fleet of passenger cars and are conducting tests aimed at replacing combustion engine vehicles with their electric and hybrid counterparts. New electric and hybrid cars reduce greenhouse gas emissions and noise levels, so that they can be successfully used in clean transport zones.

We joined the Polish Plastic Pact

The pact is part of the global Plastics Pact Network operated by the Ellen MacArthur Foundation. More than four hundred companies responsible for introducing 20% of packaging to the global markets, institutional stakeholders, non-governmental and industry organisations, as well as scientific centres and investors participate in the initiative globally. The aim of the Polish Plastic Pact is to change the current model of using plastics in packaging materials, to ensure that the principles of circular economy are followed. Members of the Pact shall take effort to increase the recycling rate and, consequently, reduce the carbon footprint. They also commit to initiate consumer awareness projects and contribute to increasing the level of correct segregation of packaging materials. The objectives set by the signatories of the Pact for the period until 2025 reach beyond the legal regulations in force in Poland.

We have implemented the Circularity Policy for Plastic

It allows our business partners to be involved in activities that maximise our impact on ensuring circularity of plastic use throughout the entire value chain. The policy will be implemented gradually, in cooperation with all business partners. It is based on the original green circulation model, which provides guidance on responsible resource management in seven areas: eco-design, resource-conscious creation, sustainable distribution, responsible sales, conscious consumption, efficient collection as well as comprehensive recovery and recycling. We have established a set of clear principles we follow in our endeavors towards circularity, and we are applying accountability rules to the entire process – from design, to ensuring a second life and revitalising the environment.

We have developed our Eco-design Policy

The Policy serves as a roadmap, presenting clear rules for designing and selecting suitable raw materials for the packaging of own brand products and for materials used in stores. It is based on four principles: loop, reduce, simplify and communicate. We reduce the weights and volumes, as well as promote reusable types of packaging. When designing packaging, we place an emphasis on the choice of materials and the use of recycled products. Components that are preferred in recycling processes are given priority as well. We simplify the form of packaging by ensuring its shape allows the product to be emptied. Using a system of pictograms placed on the packaging, we offer consumers advice on which fraction of waste should it be disposed of to after the contents have been used. In accordance with the Policy, we avoid contrast colours, soot-based pigments and solid, inseparable labels made of materials other than the packaging itself. All these measures make the packaging easier to recycle.

Eliminating plastic and foil packaging

We have replaced plastic coffee cup lids and shopping bags with their equivalents made of paper with the FSC certificate. Such an approach ensures that at least one new tree is planted for each that has been felled. The paper used in the manufacture of shopping bags and coffee cup lids decomposes naturally over the course of several weeks. Due to these changes, we have reduced the use of plastic by approximately one thousand tonnes per year. We are developing solutions with our suppliers to reduce the use of foil packaging in our products. Thanks to cooperation with Carlsberg Poland, we introduced to the market six-packs of beer relying on Snap Pack technology. Instead of wrapping cans with foil, they are attached to each with the use of adhesive. This reduces the consumption of foil by as much as 82% compared to standard packaging.