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Bottoms Up: Why SABMiller Strives to Make More Beer with Less Water

RP Siegel | Tuesday July 19th, 2011 | 0 Comments

Last week mega-brewer SABMiller released their 2011 Sustainable Development Summary Report. The company, which earned $5.04B up 15% from last year on revenues of $28.3B, up 7%, sold 218million hectolitres (5.76 billion gallons) of beer, up 2% from the previous year.

The report’s language shows a good understanding of sustainable development and a good awareness of the key issues that the company’s operations touch on, particularly with respect to water. This is a good start, though far more needs to be done and SABMiller can do more.

“Our businesses understand that their profitability depends on healthy communities, growing economies and the responsible use of scarce natural resources. We integrate these issues into the day to day management of our business.”

The report is structured along the lines company’s ten sustainable development priorities which are listed below, along with their motivational comments, goals and plans.

  1. Discouraging irresponsible drinking. “We want our consumers to enjoy our beer responsibly.” The company actively participates in the International Center for Alcohol Policy (ICAP). Their goal for 2012 is to incorporate responsible messaging on 100% of global brand labels.
  2. Making more beer using less water. “The scarcity and availability of water represent a potentially significant risk to parts of our business, as well as to some of the communities in which we operate. We aim to work collaboratively to protect the watersheds that we share with local communities and on which we and they depend.” The company has completed water footprints in each market and the findings were published in a Water Futures report last year. Using this analysis, action plans have now been developed with local stakeholders, which include watershed protection schemes, further research and engagement with other partners. Roughly 90% of the water used, which ranges from 61 to 180 liters per liter of beer, depending on the locality, goes for crop cultivation. In 2010, the company used 731 hectaliters of water for production. Water efficiency of 4.2/liters/liter represents an 8% improvement since 2008.
  3. Reducing energy and carbon footprint. “The effects of climate change could have far reaching consequences, particularly in terms of water availability and agricultural production – both of which are vital to the production of beer.” Last year’s fossil fuel emissions of 13.8 kg/hl represent a reduction of 3%. To drive faster improvements, the company has set a target for a 50% reduction in fossil fuel emissions by 2020. Regional action plans include: shifting from truck to rail in Eastern Europe, optimizing delivery logistics in Colombia and reducing packaging and refrigeration loads in various locations.
  4. Packaging, reuse and recycling – “We have introduced an environmental impact assessment tool. This enables us to review the environmental impact of our packaging by brand, from raw materials to final disposal.” The tool has been piloted in the UK, Czech Republic and Italy, and is now being rolled out to the rest of Europe. Almost half of the company’s packaging is returnable. Bottles with scuff-resistant coatings can be used up to 40 times.
  5. Working towards zero waste operations –“At our San Juan brewery in Peru, we are using waste labels to produce a fertilizer for use in a reforestation project close to the plant.” The company generated 3.1 million tons of waste (up 3%). Recycling rate remained at 96%. Yeast and malt waste is fed to livestock. Wastewater sediment is used as fertilizer. In some locations, biogas is siphoned off the waste stream and produces power. In Honduras, bagasse, derived from sugar cane waste is being used to power one brewery, saving 20,000 tons of CO2 per year.
  6. Encouraging enterprise development in value chains.  “By sourcing locally we can make a contribution to the health and economic development of the markets in which we operate.” During the past year, over 28,000 farmers were engaged in SABMiller’s smallholder programs across the world. SABMiller has partnered with the NGO FARM-Africa to provide local sourcing for cassava, which is expected to provide significant direct benefits for 2,000 smallholder farmers and their dependants, and employment opportunities for about 15,600 people in the resulting value chain over the next three years.
  7. Benefiting communities “The prosperity of our business is closely aligned to the health and well-being of the communities in which we work.” Projects are underway or have been launched in six markets, including Mozambique, Lesotho, Tanzania and Uganda to provide access to safe drinking water in these communities through the implementation of new community water initiatives. In 2011, SABMiller invested US$41 million in its Corporate Social Investment programs.
  8. Contributing to the reduction of HIV/Aids – SABMiller’s Tavern Intervention Program, with co-funding from the Global Fund, is training facilitators who will engage with 4,000 men across South Africa to address HIV/Aids, responsible alcohol consumption, gender violence and children’s rights. Working with employees and local groups, their efforts have resulted in thousands of individuals being referred for voluntary counseling and testing. Nile Breweries in Uganda, was recognized for their work by Health Initiatives for the Private Sector and UNAIDs.
  9. Respecting human rights – “As a global business, we recognize our responsibility to uphold labor standards, both in our local operations and in our supply chain.” The findings of a ‘poverty footprint’ analysis, undertaken with Oxfam America and Coca-Cola and published in March 2011, found that labor conditions, environmental protection and human rights were well respected, and that existing programs on HIV/Aids and water made a positive contribution. Issues raised include the under-representation of women, and health and safety in the supply chain. These are now being considered by their local businesses in discussion with local stakeholders.
  10. Transparency and ethics “High standards of ethical behavior and transparency underpin all that we do.” In June 2010, the ‘Ten Priorities. One Future’ communications campaign was launched across the group. This involved workshops, meetings, film screenings, posters and newsletters. A subsequent employee survey said that 85% of employees now knew how they could promote sustainable development at work.

The company’s sustainable development performance is reviewed twice a year using the Sustainability Assessment Matrix (SAM). Each business is required to provide both qualitative and quantitative data relating to each of the sustainable development priorities, which are evaluated against clearly defined assessment criteria on a five point scale. The company just added a fifth level, “Leading edge” which exceeds the previous top level which was “Best practice.”

This recent raising of the bar is commendable as it shows that SABMiller has set its sights on leadership in this area. This company has clearly on the road to sustainability, but if leadership is their goal, we’ll be looking for more substantial results over the next few years, as well as more of the out-of-the-box thinking that characterizes real leaders.

RP Siegel is the co-author of the eco-thriller Vapor Trails, the first in a series covering the human side of various sustainability issues including energy, food, and water.  Like airplanes, we all leave behind a vapor trail. And though we can easily see others’, we rarely see our own.

Follow RP Siegel on Twitter.


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