Decarbonisation as tremendous opportunity, Gondella paves the way

Gondella, based in Česká Skalice near Hradec Králové, is not a fledgling startup but a Belgian-origin company supplying various European markets for 60 years. The family business expanded into Central and Eastern Europe in 1997, initially focusing on manufacturing. However, three years ago, the original founder retired, and new management redirected the company's vision, aiming to succeed retail-wise across Central, Eastern, and Southern Europe.

"It's easier said than done, especially when you lack history and customer trust in those markets. Therefore, we adopted a dynamic strategy to align with what the retail chains are currently focusing on," explains Dalibor Bosák, Gondella's General Manager for the Czech Republic.

We thought about how to become appealing to customers in ways that make sense and give us a chance to replace their previous suppliers. Everyone expects exceptional product quality and service; that’s a given. We sought to add more appeal by integrating technologies that allow for customer behavior monitoring, personalized advertising, and real-time inventory tracking on shelves. We started working on this, but the market response wasn’t as anticipated. This was confirmed by Billa, which introduced us to its plan focusing on sustainability and commitments to climate neutrality. So, we considered what we could offer in this regard – to operate economically but also take on a share of environmental responsibility.

Exactly. Current legislation demands decarbonization efforts, so why not use this to differentiate ourselves in the market? We thought, now we are one of many, but if we find a business model that vigorously supports climate goals and legislation – because ecology must be economical – it makes great sense. The first thing we did about three years ago was to get our products certified for safety, achieving one of the highest levels by TÜV SÜD, a rarity in our field. That alone set us apart. Then we thought to capitalize on an ongoing pilot project with Albert, for whom we've long refurbished used racks. Initially, we viewed it as a burden, but after running the numbers, we found that refurbishments were at least as profitable as new units.

It’s about using the same material but pricing our work without all the preparatory operations, preparing materials, or manufacturing new shelves. All these savings are passed on. The material cost makes up about 50 percent of our product price, so our customers get a 50 percent discount when opting for refurbishment. This led to a whole new renovation division, supporting our primary manufacturing line. We’re very interested in the Kaizen philosophy of continuous improvement. When you tell production staff they’ll be working on a more sustainable product, it may initially cause uncertainty or disinterest, leading to resistance. That's why we strive for clearer communication and talk mainly about “reducing waste,” which we also emphasize to our customers.

It’s a good idea, as evidenced by our collaboration with Albert. We know that after years of use, our products are usually still in great condition, allowing us to extend their life to 21 years instead of the original five to seven. We renovate them twice. This stirred quite a reaction at the Retail Summit, with retailers inquiring whether we can refurbish products from other manufacturers. In this case, we’re looking at a hybrid model – supplying new products to new stores and renovating original racks in existing stores. We cannot guarantee the materials and quality of competitors' products, so we cannot offer an extended warranty like we do for our own. We expect that over time, the proportion of repairable components in competitors' shelving systems will gradually decrease, and we will be able to supply our new products in their place.

Most racks and shelves remain undamaged mechanically even after years of use. For maximum customer safety, we assessed risks associated with long-term use of individual components and, although the risk is minimal, we decided to replace the most stressed part, the base of the rack, which bears the most weight.

In terms of safety, we refuse to compromise. Everything else is set for renovation, depending on how the customer has treated the product over the years. For instance, shelves must not have any sag; this is crucial. Our shelves rarely sag, certified for excessive loads, unlike others.

We conducted a benchmark and reached about 82 percent, considering how customers treat the products. However, we aim to motivate them to treat the racks even better, potentially reaching 95 percent.

It’s primarily about energy security and self-sufficiency. In 2021, we went through a dark period. Our fixed energy price ended at the worst possible time, and our energy prices increased elevenfold year-over-year. You can never fully prepare for such a situation in advance. Thus, we tackled this as soon as possible. One photovoltaic system with a 400 kWp capacity is already in trial operation, and we have plans to increase this by another 700 kWp. During the crisis, we completely switched to LED lighting indoors and outdoors, saving 350 MW annually. Our annual consumption was originally 1900 MW, and since our current photovoltaic covers about 360 MW annually and the upcoming project will add another 400 to 500 MW, these steps will secure about 50 percent self-sufficiency for us.

Dalibor Bosák

General manager, Gondella Czechia

Based on measurements, we’ll be able to analyze the current situation and make strategic decisions for the future. We’re already planning to measure our own carbon footprint and that of our parent plant in Belgium, including sister plants. The parent company will then assess the overall situation and set conceptual steps. This mindset comes from headquarters; after all, our vehicles are hybrid or electric, and from what we’ve discussed with their supplier, we’re the only ones in the area doing this. But all this together makes great sense to us, and we believe it couldn’t be any other way. Chains already have commitments towards carbon neutrality in their operations, and we expect that they will soon demand the same from suppliers. Our efforts will pay off.