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How Green is Your Company?

Jack Keough, Editor/Associate Publisher -- Industrial Distribution, 8/1/2008

For 62 consecutive years, Industrial Distribution's Annual Survey of Distributor Operations (p. 20) has identified the trends and issues affecting the industrial distribution business.

During that time, we've chronicled many of the challenges affecting distributors, such as captive distribution, integrated supply and manufacturers selling direct. And in many cases, the answers to our survey questions confirmed what we expected to find. But not always.

This year, for example, we included a section on how the “green” movement is affecting industrial distributors. The answers caused us to scratch our heads a little bit.

After all that's been written about customers demanding environmentally friendly products, we expected a groundswell of enthusiasm for stocking and selling green items. There wasn't. In fact, some distributors described the “green” movement as a passing fad. Others told us that customers aren't asking for green products.

“Until they do, we'll be conducting business as usual,” one distributor told us.

Nearly a quarter of the respondents to this year's survey indicated that “going green” was not at all important to their business operations. Only 7 percent rated it as “extremely” important.

Of those distributors that have implemented green initiatives within their own companies, nearly half said it has led to additional costs. Some of those initiatives are: Expanding recycling programs, reducing energy consumption and using environmentally friendly packaging solutions and reusable containers.

Though distributors remain cautious about the green movement, most predict that the drive toward stocking environmentally friendly products will become increasingly important in the years ahead. It already has in some product sectors. For example, janitorial and sanitary supply distributors, as well as electrical distributors, said they are selling more environmentally friendly products than in years past because of customer demand. And power transmission distributors said they are selling more energy-efficient motors to customers in plants throughout the world.

There were many other important findings in this year's study, many of them concerning the economy. Nearly 40 percent of the respondents believe we are now in a recession, while another 24 percent expect a recession to hit in the last part of this year. About a quarter of the respondents have instituted a hiring freeze, and 68 percent have reduced costs by slashing travel and capital expenditures.

We'd like your feedback on this year's study. Please e-mail me at jkeough@reedbusiness.com

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