This month's management briefing continues with our look at environmental sustainability in the drinks industry. Following his look at the brewing sector earlier this year, Ben Cooper turns his attention to the soft drinks & bottled water category.

As in other consumer goods and beverage sectors, the environmental sustainability mission of major soft drinks producers is no longer focused primarily on resource efficiency in manufacturing, but takes in the entire lifecycle of their products.

Indeed, footrpinting studies have consistently revealed the comparatively small proportion of the environmental footprint for soft drinks represented by manufacturing, whether with regard to water use or energy consumption and carbon emissions.

This does not negate the importance of work already undertaken in bottling plants: Just as brewers and distillers have found, soft drinks producers need to be able to demonstrate responsibility in this area of the value chain in order to protect their licence to operate, while resource efficiencies generally go hand in hand with cost savings.

Moreover - with regard to water in particular - when operating in water-stressed areas, responsible water stewardship in production can be of great significance, even if overall the volumes being used in production represent a small proportion of the total water footprint.

Also, manufacturers find it easier to require more of suppliers and service providers across sustainability criteria if they can show they have put their own house in order to begin with.

Nevertheless, it has become clear that, in order to achieve significant reductions in the total environmental impact of soft drinks, companies have to look along the entire life of the product from agricultural manufacture through to disposal - the total footprint.

What footprinting research has also revealed, perhaps not surprisingly, is that there is significant variation in the pattern of environmental impact across different supply chains, geographies and products, depending, for example, on the packaging material used or the degree to which a particular format is merchandised under refrigeration. 

Research from the Beverage Industry Environmental Roundtable

These variations are reflected in a significant carbon footprinting study published last year by the Beverage Industry Environmental Roundtable (BIER), a technical coalition of beverage producers which includes the Coca-Cola Co and PepsiCo, along with the world's two largest bottle water producers, Nestle Waters and Danone Waters. 

The BIER study of the carbon footprint of CSDs deliberately looked at two different pack formats in two different regions.

It found that the overall carbon footprint for a 1.5-litre bottle in Europe was estimated to be 251g of CO2 per 1.5-litre PET bottle. The BIER analysis identified the following as major contributors to the overall carbon footprint: the bottle (35%), sweeteners (33%) and distribution/transportation (17%).

Meanwhile, the overall carbon footprint for a 35.5cl aluminium can in North America was estimated at 195g CO2 per can. In this breakdown, the can accounted for as much as 71% of the total carbon footprint, with sweeteners accounting for 10% and distribution/transportation for 9%.

In its most recent water benchmarking study, BIER also indicated the necessity to expand that research, which the organisation has carried out annually for some years, to take in the broader value chain. 

BIER states: "After six years of benchmarking water use within the facility, BIER is naturally progressing towards evaluating water efficiencies in the value chain, and developing tools and guidance to assist beverage companies in water accounting and assessing, prioritising and mitigating water-related risks along the complete value chain."

Research carried out by major beverage companies on water fooprinting has consistently revealed that the vast majority of the water footprint lies in the agricultural supply chain. For example, the Coca-Cola Company has found that agricultural raw materials represent 79% of the total water used on average in the manufacture of its soft drinks, with packaging accounting for 20% and manufacturing for as little as 1% of the total. Distribution and refrigeration represent negligible contributions to the water footprint for soft drinks.

The agricultural supply chain element in the water footprint is marginally lower for soft drinks than for the beer sector, where most brewers estimate it to represent around 90% of embedded water. However, they are both subject to the same critical distinction between water and carbon emissions when it comes to global footprinting and total value chain mitigation. Unlike carbon, water has to be viewed and addressed regionally. Globalised figures and reduction targets are of limited use.

For this reason, soft drinks companies have tended to adopt similar approaches to water stewardship as have been seen in brewing, with a focus on sustainable agriculture programmes as a means to address water efficiency in the supply chain and location-specific strategies based on specific watersheds to address water efficiency in their own production sites 

Other carbon footprinting research

Major manufacturers have also carried out and published extensive carbon footprinting research. Notably, the Coca-Cola Co and its European bottler, Coca-Cola Enterprises (CCE), have both produced globalised carbon footprint assessments.

According to the CCE footprint, packaging is the largest single contributor accounting for 48% of carbon emissions. The second largest element is refrigeration which represents 20%, followed by ingredients (17%), manufacturing (8%) and distribution (7%). Having carried out its own baseline assessment, CCE set a value chain-based target in 2011 to reduce the carbon footprint of an average product in its portfolio by one third by 2020. 

In that sense, CCE could be said to be ahead of Coca-Cola in this area. In fact, Coca-Cola pays tribute to the work done by its bottlers, and in particular CCE, in the sustainability arena. Jeff Seabright, VP for water resources and the environment at Coca-Cola, describes CCE as having done "tremendous things" with regard to sustainability in recent years. 

"There's lots that we can learn from the bottlers, so part of our job at the Coca-Cola Co is to learn what the best practices are out there and seek to emulate them," says Seabright. How Coca-Cola engages with its bottler network and with other partners on sustainability is examined in greater detail in the next section of this briefing.

Coca-Cola's own global assessment also shows packaging to be the largest contributor to carbon footprint, accounting for 38% globally. The next largest element again is refrigeration which accounts for 32%. Ingredients represent 13%, with manufacturing and distribution accounting for 9% and 8% respectively. Coca-Cola will unveil its own value chain reduction targets next month.

Coca-Cola has also undertaken geographically-specific assessments, notably for the US, the UK, Japan, South Korea, China, Germany and France, which also show some variations from its overall baseline figure. For example, in China ingredients account for 9%, packaging for 36%, manufacturing for 11%, distribution for 8% and refrigeration for 36%. 

In Germany, on the other hand, packaging accounts for as much as 42% of the carbon footprint, refrigeration represents 35%, ingredients 13%, manufacturing 8% and distribution only 2%.

Bryan Jacob, Coca-Cola's climate change director, points out that the company would not seek to produce footprint studies for every product in every market. "We have done representative products in representative packages in representative markets and then been able to globalise that with sufficiently reliable information to form our baseline," Jacob tells just-drinks.

With a similar multiplicity of products, pack sizes and regional variables to take into account, PepsiCo also concedes that measuring the carbon footprint for every product and packaging configuration is not possible, stressing the importance of modelling in making total value chain assessments. In particular, PepsiCo has worked with a team of scientists at Columbia University led by Professor Christoph Meinrenken to develop a Fast Lifecycle Assessment (Fast LCA) assessment methodology.

In an article in the Journal of Industrial Ecology, Professor Meinrenken points out that as many as 100 different data inputs, including for instance the mass of the materials used, all journey distances and duration under refrigeration, are required for a single LCA for one specific product.

Footprinting research underlines the extent to which brand manufacturers are dependent on data inputs, innovation and action from suppliers, service providers and other partners when addressing environmental impacts along the value chain. How companies are seeking closer partnership with their partners on sustainability issues is the subject of the second section of this management briefing.

For the second part of this briefing, click here. All four parts can be accessed here.