Two major American beer brewers are growing greener –and we’re not talking about producing that colored stuff that some pubs serve on Saint Patrick’s Day.
GreenBiz Group Associate Editor Lauren Hepler writes in the article below that "the big names in beer are also refining their own production methods to maximize efficiency and address nagging sustainability challenges."
For most casual drinkers, beer is beer. It can be hoppy or mild, light or dark, but the finished product often doesn’t convey the months of intense agricultural legwork and processing that it takes to get your favorite brews bottle-ready.
As craft brewers continue to gain market share, particularly in urban markets flush with disposable income, the big names in beer are also refining their own production methods to maximize efficiency and address nagging sustainability challenges.
Water use and the process of growing barley are two primary areas of focus for MillerCoors and Anheuser-Busch InBev, particularly as risk factors like water scarcity become more prevalent and new precision agriculture technologies hit the market.
"It really needs to be farmer centric," John Rogers, global director of agricultural development at Anheuser-Busch InBev, told GreenBiz. "We look at economic value creation as well as environmental."
That process increasingly entails not only calculating the relatively straightforward economic costs of producing beer, but also harder-to-quantify natural capital costs.
The Sustainability Accounting Standards Board (SASB) this week released new disclosure and accounting guidance for sectors including the alcoholic beverage business. Among the biggest issues facing the beer industry: water and energy usage, agricultural risks, waste generation and local impacts on communities where ingredients are grown.
As the two biggest brewers in the U.S., Anheuser-Busch and MillerCoors have outsized potential to forge models that address these sustainability challenges — and there are high financial stakes for both.
Anheuser-Busch InBev, which has dual headquarters in Brazil and Belgium and a market cap of $197 billion, has cornered about 25 percent of the global beer market with brands like Budweiser, Corona and Stella Artois. The company uses 5 million metric tons of barley annually and works directly with upwards of 20,000 barley growers.
MillerCoors, meanwhile, was born in 2008 with the launch of a joint venture between SABMiller and Molson Coors Brewing Company. The Chicago-based U.S. arm of the companies produces and markets beers including Miller, Coors, Molson and Blue Moon. All told, the company tallied $7.8 billion in sales last year.
“We need to be really strong leaders with what we’re doing," MillerCoors Chief Sustainability Officer Kim Marotta told GreenBiz.
Watering down risks
To make beer, you need water. By some academic estimates, the liquid resource accounts for 90-95 percent of beer by mass.
In addition to California’s ongoing severe drought, many major brewers — along with big, industrial users in many other sectors — rely at least in part on water from other severely depleted sources, like the Colorado River.
Agricultural and brewing operations that rely on fragile watersheds expose beer companies to enhanced risk.
"Because alcoholic beverage companies rely heavily on access to a large volume of clean water and water stress is increasing in different regions globally, companies may be exposed to supply disruptions that could significantly impact operations and add to costs," SASB explains.
"Companies operating in water-stressed regions that fail to address local water concerns may face further risk of losing their social license to operate."
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