Posted on September 2, 2024
Tine Elaine Enger Kinn, Chief of Staff and VP Sustainability, discusses Gelato’s annual sustainability report and its sustainable shipping model
Scope 3 emissions are responsible for more than 70% of most carbon footprints, and shipping plays a part in this.
Reducing mass production and transitioning to local, on-demand manufacturing could be the key to reductions.
Gelato, an innovative marketplace platform, is turning this concept into reality.
By focusing on local production, Gelato ensures that products are only created when ordered and are produced as close to the customer as possible. This approach significantly cuts carbon emissions while also enabling global businesses to adapt swiftly to changing customer demands.
Gelato’s model not only reduces environmental impact but also empowers businesses to be more responsive and efficient in a rapidly evolving market.
Tine Elaine Enger Kinn, Chief of Staff and VP Sustainability at Gelato, shares insight from the findings of the company’s annual sustainability report.
How closely are supply chains and sustainability intertwined?
Supply chains and sustainability are deeply intertwined. At Gelato, sustainability is at the core of what we do. Our model is to help move manufacturing from centralised mass production to local on-demand production. By only producing a product once it is sold, we eliminate overproduction. This is important from a sustainability perspective but also from a supply chain perspective because there’s no need to forecast, warehouse and bind capital in inventory or obsolete goods. Our network of local production partners minimises transportation distances, speeds up delivery and reduces CO2 emissions. It’s also more resilient because, with more partners and less distance, there’s less room for shipping interruptions.
Our customers trust us with their business and brand. As we rely on partners for production and transportation, it’s key to know our partners well, both from a quality and sustainability point of view. We have a thorough vetting process of all production partners and are working with EcoVadis to ensure transparency and drive continuous improvement in our supply chain across environmental, labour and human rights, ethics and sustainable procurement practices.
Tell us about some of the key findings from Gelato’s 2023 Sustainability Report
Gelato’s biggest environmental impact is helping many global ecommerce businesses avoid and reduce emissions by shifting from centralised mass production to local on-demand production. The more products we add to our catalogue, the more products will be available for on-demand production. The more great makers we add to our network, the closer we can produce to our end customers. The better GelatoConnect is, the more partners can move into on-demand production and improve their businesses. It’s all based on rethinking the way the world produces and is why I think Gelato is such an exciting company.
From a sustainability (and business) perspective, Gelato focuses on:
- Reducing environmental impact through local on-demand production
- Having a positive impact on people by creating local business and jobs for creators and makers
- Acting responsibly and being a trusted partner
To dive into some of the numbers from 2023:
- In 2023, 87% of all packages were fulfilled in the same country as the end customer, allowing for domestic delivery. Almost all (99.6%) were produced in the same region as the end customer.
- We more-than-halved the shipping distance per apparel package in the US and Canada from 2021 to 2023 by growing our network of production partners.
- In 2023, two-thirds of GelatoCreate orders had the buyer and seller in different countries, showcasing how the Gelato model facilitates global trade without physically moving products across borders.
- More than 45,000 new creators ordered from Gelato, fuelling entrepreneurship and business opportunities.
- We achieved ISO 27001 certification.
Gelato advocates for localised production to reduce carbon emissions from transportation
What does Gelato’s sustainable shipping model entail?
Gelato’s sustainable shipping model is centred around local, on-demand production and delivery.
First, we only produce and ship products that are actually bought and, by leveraging our network of global production partners, we can produce the product closer to the end-customer. Local production and our partnerships with more than 60 logistics carriers reduce transportation distances, costs and emissions, allowing us to rely on ground transportation instead of air. And ground transportation has more potential to move away from fossil fuels.
In 2023, 99.6% of packages were produced in the same region as the end customer, while 87% were produced in the same country. We delivered to customers in 184 countries, so you can imagine the impact if all of that was produced in, for example, China and transported by air.
What are the benefits of local, on-demand production over mass production?
Local, on-demand production offers faster delivery, eliminates capital tied up in inventory and significantly reduces overproduction, transportation distances and emissions. Gelato’s innovative model enables this globally. By producing on demand, inventory no longer sits idle and each item produced generates profit. This approach also democratises access for creators and entrepreneurs, providing them with the competitive production costs and delivery speeds of large ecommerce players, all without upfront investment.
On-demand production brings substantial benefits: it slashes delivery times, cuts waste, reduces carbon emissions and lowers costs. With Gelato, sellers are free from the burdens of inventory management, forecasting, storage, manufacturing and shipping. Plus, there are no minimum or maximum order requirements – everything is produced as needed. Our method is faster, smarter and greener. By matching supply with demand, our approach helps reduce CO2 emissions, making the entire process more environmentally friendly.
How is Gelato revitalising local production?
Gelato revitalises local production by leveraging local resources, production facilities and people. Our network of production partners consists of more than 140 production hubs in 32 countries, who are funnelled from all over the world to be produced in and for their local market. In 2023, more than 50 of our production partners received orders through Gelato from more than 50 countries. These are orders they would never have received if not for Gelato. Additionally, they would probably have been produced far away from the end customer and then shipped by air to their destination.
We envision a future world where anyone can be a business owner; where hyperlocal, on-demand production can serve any major city; where close to anything can be produced when needed, where needed. A world without overproduction; a world where software, technology and partnerships link creators, makers and end-customers, everywhere. Our goal is that our role in facilitating global trade through local on-demand production will continue to change the world for the better, making it smarter, faster and greener.
