A change in culture is one of the key ways to bring about change across all sectors: such as engaging employees in efforts and setting meaningful targets. Collaboration across companies and stakeholders is also vital.
That’s according to the inaugural Drinks Industry Sustainability Index Trends Report 2020, published by Magners producer C&C Group and Footprint Intelligence. The report scores the beverage industry across eight key areas: including packaging, waste, water, energy and emissions.
“Scientists tell us that 2020 is a critical year for change - and sustainability needs to be high on the agenda for us all,” says Steward Gilliland, executive chairman, C&C Group. “Not simply because more and more stakeholders demand ethical, responsible behaviour, but because stepping up our efforts when it comes to the environment is also the only way to safeguard our personal – and commercial – futures.”
The industry has made some good inroads, but...
The report found that the drinks industry has ‘pockets of good practice’ - it's recognised, for example, the need to rethink packaging - but is lagging behind in others. Carbon footprints, for example, can be hefty given the transportation of raw materials, packaging, finished goods and wastage. The industry can also be highly energy intensive, with processing of fruits or grains and complex distilling processes requiring high amounts of energy.
The ratings for each sector were compiled through a combination of primary and secondary research: such as in-depth industry interviews and desk-based research. It covers both the alcoholic and non-alcoholic drinks sector. “While the industry has made some good inroads, with certain players at the vanguard of this transformation, the industry at large has a long way to go on its sustainability journey,” says the report.
Engage everyone
So where to start on such a seemingly insuperable sustainability mission? Embracing efforts close to home is a good place to start.
Setting clear strategies and targets will be key to improving sustainability. But it’s not just about dry technical targets: it’s about engaging everyone – from employees to stakeholders – in a sustainability mission.
“The drinks companies that are leading and who are having the most impact are those that have clearly identified sustainability strategies which have been developed through careful understanding of the science, their stakeholders, their supply chains, and the full range of their business impacts” says the report.
“They have also taken this information and permeated it throughout their culture. They have translated it to employees to enable them to understand their role in not only helping the company to meet ambitious targets, but also to inspire them to feel empowered to see and do more, and to continually challenge those around them to do the same.”
Companies should set themselves meaningful, challenging targets which align with science and the UN’s Sustainable Development Goals (SDGs) to ensure efforts are robust.
“It is important to include the supply chain, for example to question how drink-related crops like barley or hops and the communities that grow them, and the supply chains that deliver them will be impacted by climate change. There is increasing recognition that these are real business risks: the continuity and availability of supply.”
C&C Group targets
Headquartered in Dublin, C&C Group manufactures, markets and distributes branded beer, wine, cider and soft drinks: including Tennent's, Magners, Orchard Pig. In the US it manufactures craft cider brand Woodchuck.
- Key raw materials for beer and cider brands are sourced locally.
- The Group has set targets to be 100% carbon-neutral by 2025 – 25 years ahead of the UK’s carbon neutral target.
- It will remove single-use plastics from consumer packaging by 2021.
- Its sustainability index helps identify sustainable operating practices which reduce the industry’s carbon footprint.
Get employees involved
People are increasingly concerned about sustainability – and this includes employees.
“Employees really care about sustainability, especially concerning issues such as waste, so it’s important that companies help them act to reduce it,” notes the report.
UK brewing and pub retailing business Marston’s, for example, can provide concrete figures of how employee engagement can pay off. It hit its zero waste to landfill target two years early after bringing all supplier management in house and helping to drive staff culture change through a waste action plan. This plan helped to systematically change the management culture to encourage staff to tackle waste: and is now being expanded to a ‘culture change’ campaign aimed at brewery staff to reduce water usage, energy and waste. This has been responsible for a 10% reduction in water usage, according to the company.
While internal efforts might seem like small fry compared to the size of the global challenge, multinational beverage companies can employ tens of thousands of people – creating a butterfly effect behind a movement.
And sometimes the best ideas come from those working on the front line. Companies should be engaging the team in sustainability efforts and considering what their employees want them to be as a business, suggests the report. Even when a company is doing a lot, the energy and enthusiasm from employees is still there to do more and push harder.
Innocent Drinks, for example, gives employees a role outside their job title to champion the company’s overall mission and mindset. A ‘Protector’, for example, defends sustainability; while an ‘Agitator’ is tasked with constantly challenging the company to do better.
Collaboration is key
Is the drinks industry lagging behind when it comes to collaboration? “In hospitality and foodservice, collaborating to find solutions has been commonplace for years, but the highly competitive drinks industry is only recently waking up to the opportunities afforded from working together,” says the report.
“Being proactive about collaborating to solve sustainability challenges is rapidly becoming a business necessity.”
However, the drinks industry is starting to act on opportunities.
The Ellen MacArthur Foundation and the New Plastics Economy, for example, show how stakeholders can work together on plastic and packaging. Among the 250 corporate signatories are The Coca-Cola Co, PepsiCo, Danone, Nestle and Unilever. Such schemes can help companies hold themselves to account and demonstrate transparency.
Other packaging initiatives include the Alliance to End Plastic Waste – an industry coalition that brings together organisations along the plastics value chain from oil and chemical producers to consumer goods companies; and the UK Plastics Pact which allows companies to sign up to targets to reduce problem plastics.
And some companies are even willing to share competitive information – Toast Ale has made its bread-based recipe open source and regularly collaborates with others to catalyse a larger movement in the brewing industry. The recipe has been accessed over 80,000 times.
AB InBev use a supplier portal called Eclipse which allows discussions around sustainability and carbon reduction throughout the tender process. Suppliers can input commitments to Eclipse so AB InBev can see which suppliers have similar commitments to help them learn from each other and benchmark best practice in a non-competitive forum.
Drinks barometer: How does the drinks industry level up?
Strategy and culture: 4/10
“Needs more work. The industry is picking up the pace of change, reacting to pressure from employees and investors, but companies are only just starting to separate their external impacts from their bottom line and seeing their brands as part of a global picture of climate crisis. Being a purposeful business will resonate with consumers and presents an opportunity. It is the right thing to do and it is expected from all sides.”
Packaging: 6/10
“A hot topic and one that the industry has embraced hard. Incoming legislation could prove challenging and needs industry engagement. Good progress has been made but the industry needs to set itself challenging targets for recycled content. Critically drinks companies – and their consumers – are mired in tradition. It is time to use effective marketing to move away from glass bottles and virgin plastics to less impactful containers.”
Waste: 5.5/10
“Another hot topic issue which the industry is tackling but incoming legislation on bottle returns and EPR could be disruptive so it will pay to get ahead of the challenge. Time to think more creatively about waste and to find more circular uses for it from fabrics to plastics, as well as preventing waste from occurring in the first place.”
Water: 6/10
“An issue where the industry has been creating effective solutions for some years, but it is time to take it up a gear and set challenging targets because water scarcity is a threat to the industry. Finding creative ways to capture and re-use water is essential, and the industry needs to look down the supply chain to be water efficient in the growing and processing of raw materials.”
Energy and emissions: 4.5/10
“Definitely an area where the industry could do better. It is time to decarbonise, work towards science-based targets, embrace renewable energy and look at technological solutions to make the sector more energy efficient. One area where science is moving fast is batteries and other ways to manage power. Costs are higher but can show return on investment in the longer term. Time to walk the talk.”
Social impact: 3.5/10
“Lagging behind other industries. Yes, drink/drive programmes have proven effective but the sector is a big employer along its global supply chain with the power to support programmes that achieve incredible impacts in terms of supporting education, youth employment, health programmes, underprivileged communities and innovators.”
Raw materials and environment: 4.5/10
“Could do better on sustainable sourcing. Should be more proactive in terms of investigating its supply chain and working with farmers. Collaboration is key in terms of developing shared programmes that support growers and producers, but also removes duplication of effort.”
Clients and consumer: 5/10
“Consumers are a lever that can be turned to create a more sustainable industry, with the growth of interest in purpose-driven companies. The industry has a responsibility to work for population health and wellbeing and can apply its branding to drive greener behaviour. Clients are looking for product that meets the needs of younger consumers who are moving away from alcohol and enjoy quality brands with stories.”