Sustainability is multi-layered and complicated, partly because it’s difficult to tackle the topic in isolation from other partners in the value chain. Germany’s largest baked goods manufacturer, Harry-Brot GmbH, found this to be true as it has been making strides with CO2 reduction, in-house and along the value chain for years. In this interview, Norbert Lötz, Managing Director of Production and Technology, talks about the challenges and obstacles on the way to sustainable baked goods production.
Helga Baumfalk: Mr. Lötz, what do you understand by sustainability, as a baked goods manufacturer, and where did the idea come from to tackle the issue and determine the carbon footprint of all products first, and later, of that of the entire company?
Norbert Lötz: As an owner-managed company in its 10th generation, we have always strived to ensure the continuation of our company for future generations. Changes in society and current crises have prompted us, not only in management, but also among many employees, to ask ourselves what we can do even better in the future. Seven or eight years ago, sustainability wasn’t among the top priorities as much as today. However, we realized then that we had to change something and focus on it more. It’s less about how to cut costs or solve this or that problem, and more about ensuring the future viability of the company.
Baumfalk: How did you proceed in concrete terms?
Lötz: We asked ourselves where we stand in terms of sustainability. Where and how can we do things even better? Looking at what do we, perhaps, do we need to fundamentally rethink things? We have been dealing with the topic of energy for many years, but it was primarily from the perspective of cost savings. Today, the impact on a single product’s carbon footprint is taken into account. The narrative has changed and it’s become complex. Simply saving kilowatts by installing a better motor for a conveyor belt, for example, is no longer enough. We are thinking ahead, rethinking the size of our breadsticks, for example, in order to produce fewer rejects in the form of end pieces and thus save energy and raw materials.
Baumfalk: Have you received external demands for sustainability?
Lötz: The initial incentive came from within our company. Requirements from outside came later, from our customers, other stakeholders and politicians. Sustainability was and is an ongoing process in our company, which has now gained considerable momentum.
Baumfalk: What expectations do consumers have?
Lötz: Consumers today want to know where the raw materials come from, how they are processed and what happens to by-products and waste. Awareness in this direction has increased significantly.
Baumfalk: How do you communicate sustainability?
Lötz: We talk specifically about topics such as the regionality of our raw materials, or the precise and therefore reduced fertilization of the grain and we are receiving positive feedback consistently. Occasionally, we are explicitly asked about certain topics, such as food waste. When we explain what we are doing in terms of sustainability, people are amazed at the extent of our commitment.
Baumfalk: Speaking of food waste, what are you doing about it?
Lötz: We see a very important point in demand-oriented production and packaging. This allows us to adapt to market demands with our daily fresh production and delivery and actively contribute to combating food waste.
Baumfalk: Are your efforts for more sustainability also seen by retailers?
Lötz: Absolutely! The retail sector itself has set up departments within the company that deal with sustainability. We are in direct contact with these departments.
About Harry-Brot
Harry-Brot GmbH, headquartered in Schenefeld near Hamburg, was founded in 1688 and is now in its 10th generation of family ownership. With around 5,020 employees, Harry-Brot operates 10 production sites in Germany and produces sliced bread, toast, sandwiches and baked goods for ready-baking as well as a range of prebaked products for retail baking stations. In 2023, Harry-Brot GmbH generated sales of EUR 1,408 million. This makes the company the market leader in Germany.
Sustainability is a leadership matter
Baumfalk: “Sustainability must be a top priority,” you said in your presentation at the WIG conferences in spring 2024. Who is the driving force at Harry?
Lötz: Clearly, the management. They have to lead the way on this topic. But, we very quickly realized that many of our employees are just as committed to sustainability work and got actively involved. They are incredibly motivated to drive this issue forward.
Baumfalk: How do you define sustainability at Harry?
Lötz: Avoid, reduce and, if necessary, compensate! It is best not to generate CO2 in the first place. The second step is dealing with lowering emissions and finding answers to the question, “What can we do better?”. One example: engines consume a lot of energy when starting and stopping. If you leave them running all the time, they also need electricity. Now the question is, what is better for the CO2 balance, keeping them on, or shutting them down and restarting them? We decided to keep them running at a minimum speed. To do this, we installed frequency converters that operate at 15 Hertz in standby mode instead of 50 Hertz, so that they don’t consume as much power when starting up and as little as possible when continuing to run. It is important that we scrutinize the entire process in detail to look for better solutions. Admittedly, we don’t always find opportunities for optimization, but the search for them alone drives many people in the company to get involved.
Baumfalk: Can you give us more examples?
Lötz: We also looked into the question of why the flour has to be transported over such long distances within our production facilities. As a result, we are installing the silos in our new plant in Troisdorf above the production area. This shortens the distance to the kneader and reduces the amount of energy required for transportation. Another example: in the past, the goods were pasteurized to preserve them. Today, we only pasteurize in isolated cases and transport many of our products via clean rooms, which significantly improves the quality of the products and also saves energy.
Norbert Lötz,
Managing Director of Production and Technology, Harry-Brot GmbH
Baumfalk: You mentioned the new plant in Troisdorf. Is sustainability an issue for building materials there?
Lötz: To a certain extent. We try to reduce the floor space by not only thinking in terms of 400 m long halls, but also considering how the material flow can be optimized. In my opinion, we have succeeded in doing this well in Troisdorf. In terms of the building materials themselves, we have less leeway due to the fire safety requirements. Nevertheless, sustainability was the focus of the planning. In the distribution hall, for example, we use underfloor heating that is sourced from waste heat. We have also installed large heat exchangers to preheat the air that is fed to the burners. We assume that this will also save a considerable amount of energy. We will be able to prove this when the comparative values are available.
Baumfalk: Do you see CO2 as a kind of currency?
Lötz: Yes, but this is where it starts to get complicated. Sustainability is multi-layered. I would like to illustrate this with another example. When looking at our corporate carbon footprint, our CHP (combined heat and power) plant is currently under discussion. The problem is that it increases gas consumption and, consequently, our company’s footprint. However, it works very energy-efficiently, precisely because we can also use 100% of the waste heat. We save energy in many other places and even feed the rest of the waste heat into the city’s district heating network. The question is, which perspective on sustainability is the right one? It is crucial that we don’t think about sustainability on a small scale but in a global way. If we don’t, we are not actually changing anything.
Baumfalk: That does sound complicated. Can you explain your approach in more detail?
Lötz: If we use fossil energy, in this case, gas, to generate electricity and heat via our CHP plant and then achieve an efficiency of 93%, we can’t be blamed for the fact that we need more gas at this point. 93% efficiency – none of the electricity-generating power plants in Germany reach this, to put it into perspective. That’s why I would like us, in Germany, to take a more global approach to the issue. The fragmented nature of the decisions – federal, state, district – has an inhibiting effect. As a result, we want everything, but no one can implement measures to reduce CO2 emissions. We must not penalize companies for doing something for the environment.
But that’s how it is at the moment. Companies that do nothing are not taking any risks. Those that do something are taking a high risk and may end up losing out if, for example, natural gas prices plummet and it was a bad decision to invest in sustainable energy. It must be ensured that companies that invest in sustainability are not disadvantaged. The CO2 price can play a role in this if it is implemented consistently.
Baumfalk: Specifically, what are the drawbacks of the CHP unit consuming more gas?
Lötz: It’s about pursuing the SBTi goals – the Science Based Targets Initiative. It calls for and defines methods for reducing emissions in line with climate science to achieve climate neutrality. The CHP plant means that we consume more gas and therefore do not achieve the target set at this point.
Baumfalk: And what does that mean for you?
Lötz: I examine SBTi targets with a very critical eye. They require us to save 4.5% on energy every year. But, we don’t have a perpetual motion machine. The 4.5% savings have to be achieved every year, even if a company produces more goods. However, a company that is growing cannot do this. The crux of the matter lies in the calculation with absolute values: there is no reference value here. A manufacturing company cannot be climate-neutral per se. When formulating targets, achievability should also be taken into account at a global level; otherwise, these targets quickly appear to be window dressing.
Norbert Lötz,
Managing Director of Production and Technology, Harry-Brot GmbH
Baumfalk: So what would you propose?
Lötz: We urgently need to do something and use the available energy more efficiently globally. CO2 emissions can only be reduced with greater efficiency, regardless of the process. We waste too much energy these days and are also unable to store it. Two years ago, I set the company target of 50% self-generated energy at the Soltau site. The Federal Ministry of Economics is supporting us at the state level to develop simulations for greater sustainability, which have also incorporated various ideas. However, many legal hurdles in regional politics may prevent the implementation of various options.
Baumfalk: Obviously, there is room for improvement in cooperation with and in politics. If we look at your efforts to advance your sustainability, did you have any role models from the industry?
Lötz: Both in the food industry and in other sectors, many great companies are taking an innovative approach to sustainability. I am very excited to see which concepts we could also implement for ourselves.
Baumfalk: What are your plans for Soltau now?
Lötz: We are currently investigating what we can implement. Wind power and biogas are important topics that we are looking at closely.
Baumfalk: Is an electrolysis plant for producing hydrogen, such as the one operated by MPREIS, an issue that Harry could consider?
Lötz: Producing hydrogen ourselves is not an option for us at the moment. However, we will need hydrogen one day and are active in various organizations that focus on the use of hydrogen. We can easily integrate hydrogen at various points in our production. Only the connection is still missing. However, the question arises as to who will pay the higher price for hydrogen compared to gas. If we make our bread 10 cents more expensive because we use hydrogen, for example, that may be laudable, but in the end, we have to sell it and generate profits from it, which we can then use to invest. That is why I believe that there must be compensation payments from a higher level for those who reduce gas compared to those who do not. This brings us back to the issue of CO2 pricing.
How is the CO2 footprint determined?
Baumfalk: How do you determine the CO2 footprint?
Lötz: For our Corporate Carbon Footprint (CCF), we start with our raw materials and examine the emissions caused by cultivation, transportation to the mill and processing, based on information provided to us by the mills. In the next step, we include the entire production process, including direct and indirect energy consumption. We record all the values of our processes, even employees’ commuting and business trips. Finally, transportation to our customers is also calculated. The values in the various scopes are added together. TÜV then validates our calculations in the individual scopes. And since the framework conditions are constantly changing, we recalculate every year.
The values for our CCF are derived from these calculations. For the individual product – the Product Carbon Footprint, we also take into account the line on which the product was manufactured and under what conditions. Developing a CCF is a huge challenge, and one with a time limit, as the CO2 footprint has to be constantly adjusted.
Baumfalk: In contrast to most other suppliers who use central warehouses, Harry supplies each individual store. What effect does this have on the CO2 balance?
Lötz: There are significant differences. For example, reusable crates are used in drop shipments, while deliveries to central warehouses are packed in cardboard boxes, which have a higher CO2 value. In this way, we produce considerably less CO2, even though we include the gas for the journeys to and from the individual customers and the cleaning of the boxes. Nevertheless, our carbon footprint is around 23% lower than if deliveries were made in cardboard packaging. To be fair, I have to say that we set up driving routes to nearby stores. This means that one vehicle drives to many stores within a relatively small radius every day. If we only drove to one store in each region, we would get a completely different picture.
Baumfalk: Harry produces fresh and frozen products. Are there differences in the CO2 balance here?
Lötz: Our frozen products are semi-baked, so we save energy during baking. Energy is then used in the form of electricity for freezing. In the end, the balance is not that different. At the moment, half of the electricity in Germany is green and half is black. Of course, we could consider using electric ovens, but gas prices are currently far too low to make it worthwhile. The Scandinavians, for example, are positioned differently. Because a lot of hydropower is used to generate electricity in these countries, electricity is comparatively cheap there.
Baumfalk: Would that be a model that would work well in Germany?
Lötz: If we want to get away from fossil fuels, we certainly have to think in terms of electricity, but it would have to be produced sustainably. At Harry, we are already thinking about how some processes could be converted to electricity use. However, this requires careful consideration of the advantages and disadvantages.
Norbert Lötz,
Managing Director of Production and Technology, Harry-Brot GmbH
Baumfalk: 65% of CO2 emissions come from raw materials used for baking, before baking even starts. How does Harry approach this topic?
Lötz: That is the biggest lever. If we all only ate rye, for example, our carbon footprint would look better because it requires less nitrogen fertilizer during cultivation. Nevertheless, there are also ways to reduce CO2 emissions from wheat. This is exactly what we are currently focusing on. We see ourselves as part of the value chain and are working with farmers, a fertilizer manufacturer and a mill in a joint project to test how we can reduce CO2 emissions.
Baumfalk: You are talking about your cooperation involving the use of green nitrogen fertilizer, right? Why did you enter into this cooperation?
Lötz: Because we want to show a way in which we can reduce CO2 emissions. However, this path ultimately costs money and the question is whether consumers are prepared to spend a little more money so that a reduced nitrogen input from the outset lowers the CO2 footprint of the product. But, we also go further and ask ourselves what we need to do together with the farmers to ensure that the right varieties are grown that provide us with the baking properties we need. Ultimately, we want to get by with less protein and therefore less nitrogen fertilization. The farmers we work with are highly automated.
They do not determine the amount of fertilizer required per field, but can use geodata and algorithms to fertilize specific areas. Fertilization is therefore more needs-based and much more targeted. It is a pleasure to sit around a table with such professionals and discuss what is feasible!
Baumfalk: What solutions did you take away from the discussions?
Lötz: We have identified wheat varieties that we believe require less protein from the outset in order to achieve the same product qualities. These varieties have now been cultivated in specially assigned areas. This is accompanied by studies and, among other things, the amount of nitrogen applied is documented. At the end, we calculate what we have achieved in terms of CO2 reduction and yield. As we measured the values last year using conventional varieties and methods on precisely these fields, we can really compare them with this year’s results.
The green nitrogen fertilizer project
In 2023, Harry-Brot signed a cooperation agreement with the milling group Bindewald & Gutting and the fertilizer manufacturer aYara Germany. The collaboration aims to reduce the CO2 footprint of grain cultivation. The vehicle for this is the production of the nitrogen fertilizer used in grain cultivation using renewable energy. Yara’s fertilizer is produced in Rostock using green hydrogen from Norway. Compared to conventional nitrogen fertilizer, it reportedly has a CO2 footprint that is up to 90% smaller
Do we still need high-protein flours?
Baumfalk: Do we still need wheat with a high protein content for baking bread? Is that still the right standard?
Lötz: No, it doesn’t need to be. Protein has always been viewed quantitatively, not qualitatively. This view has changed, certainly due to the fertilizer reform, the price increase, and other reasons. Today, I think we no longer need these high-protein meals, we need the right varieties.
Baumfalk: But farmers are paid according to protein content. How do we solve the problem?
Lötz: A reconsideration is needed here. A large proportion of the grain grown in Germany is exported. This means that a new approach must be embraced globally. I believe that we can certainly achieve this within Germany. However, I can’t speak for France or other countries. But, I know that some bakers in the Netherlands, for example, are prepared to scale back their demands on protein content.
However, farmers must not be left out in the cold. The exciting question, and I have already mentioned this, will be whether we can achieve consumer acceptance. If this works, and if you, as a baked goods manufacturer, have the opportunity to label your product with the statement ‘this or that measure has reduced CO2 emissions by 30%’, then you can also offer farmers corresponding contracts. The best example of how easy it can be for people to make a decision for or against something is green electricity. I am aware that it will be a long road to re-evaluate wheat and certainly not an easy one, but as they say – crises are always new opportunities.
