Consumer Goods

The link between procurement and a sustainable pint

Beer is made up of 95% water—and that’s just what makes it into the final product. It can take up to seven gallons of water to make one gallon of beer and that ratio can be as high as 10 to one.

But these figures don’t factor in the amount of irrigation required for the farming of barley and hops, two of the four ingredients key to brewing (alongside water and yeast). So, on the whole, brewing is a water-intensive activity.

Many breweries, from small independents to macro beer, are looking at ways to become more sustainable in the brewhouse and water wastage is a key issue in the industry. Some breweries don’t have a choice—in places like California, where water shortages are common, breweries have been ordered to reduce their water usage by local governments. Other breweries are taking steps of their own volition, such as building water treatment facilities. This is just a drop in the ocean when it comes to water conservation in the beer industry, however.

The world’s largest beer manufacturer, Anheuser-Busch InBev (AB InBev), has set ambitious sustainability goals to achieve by 2025. These focus on four pillars: smart agriculture, water stewardship, circular packaging and climate action, requiring a complete supply chain overhaul. From the farmers they work with for growing barley to packaging design, AB InBev is concerned with increasing efficiency at all stages of production.

The impact of brewing on the environment doesn’t start and end at the brewery; AB InBev reports that 90% of its water input is used in agriculture, especially in growing barley and hops. This is demonstrative of how water usage is spread across all stages of the supply chain—and that action must be taken across multiple functions if the beer industry is going to successfully reduce wastage.

How does this affect procurement? Well, by enabling farmers to grow barley more efficiently and future-proofing their crops, this means that the supply of one of beer’s fundamental ingredients is secured; and without barley, there would be no beer. This is particularly important because malting barley varieties are delicate crops that are increasingly at risk of low yields when affected by climate change or draught. The Nature Research journal reports that weather conditions are responsible for an annual decline of up to 17% in an average barley harvest. This in turn can potentially cause beer prices to rise by up to 15%.

AB InBev is developing a number of processes that will benefit other manufacturers around the world, such as AgriMet, an irrigation scheduler programme using data to optimise water usage. In addition to this, it is also sponsoring agriculture-focused water reduction programmes in Argentina, Brazil, Canada, China, Mexico, Russia and Uruguay. By improving processes and helping farmers to understand the impact of weather on their harvest and to predict crop conditions, AB InBev is equipping barley and hop growers with the knowledge to produce healthy yields.

One thing is patently clear: if the beer industry is going to reduce its water usage, then it must happen at all stages of the supply chain. The initiatives put in place by the world’s largest breweries will have the most significant impact on the reduction of water usage and wastage and, in investing in these projects, large beer manufacturers are playing a vital part in making the entire industry more sustainable.

This can only be a good thing. While many drinkers are unaware of just how much water it takes to grow the ingredients that go into their pint, it’s unlikely that they’ll be turning their backs on the product soon—especially where grabbing a beer with friends is woven into the cultural fabric of a country, like the US or UK.

With major beer producers working closely with farmers to increase efficiency and pushing a number of initiatives to guarantee healthy, sustainable crops, this is a particularly exciting time for procurement professionals to get into similar food and beverage positions.

As sustainability is such a key focus for manufacturers, we’re beginning to see organisations hire sustainability professionals not only into their procurement teams, but across the wider supply chain—logistics being a core area for this. With topics such as carbon emissions receiving such heavy media and political coverage, there’s value in hiring expertise into organisations with high land freight costs.

Growler Mag | The thirsty business of beer: How breweries are confronting the industry’s water problem
Raconteur | Brewing the future: water efficiency in beer making
CSO Magazine | AB InBev Driving Sustainability
Nature | Decreases in global beer supply due to extreme drought and heat

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