Ben Cooper

Sustainability in Spirits - Part III - Working with Agricultural Suppliers

By | 23 October 2013

just-drinks continues its management briefing series on environmental sustainability this month, with a focus on the spirits industry. This, the penultimate part of the four-part briefing, turns the spotlight on the agricultural end of the chain.

As footprinting research consistently shows that a significant proportion of the environmental impacts involved in the production of spirits, notably water and energy consumption and greenhouse gas emissions, comes from the agricultural supply chain, partnership and collaboration with agricultural suppliers is becoming ever more crucial.

If empathy and common ground are critical components in such dialogue, Pernod Ricard believes it has a particular advantage, according to the company's scientific advisor on sustainability, Patrice Robichon, in that it is directly involved in agriculture itself on a considerable scale.

The company cultivates some 6,600 hectares of vineyards principally in six countries, which, says Robichon, means the company directly produces around 10% of the 3m tonnes of agricultural commodities it uses in the production of its wines and spirits.  

Bringing its experience as an agricultural producer to bear is "absolutely key" to the company's sustainability strategy, Robichon says. "Being able to produce 10% from our own land with our own teams of farmers, we are able to talk with and to teach other farmers. We have a lot of experts in farming. When we talk about reducing the use of fertilisers or pesticides, we are not just talking about a concept. We know how to do that."

Robichon says Pernod has been able to apply its direct agricultural expertise across other agricultural supply chains, notably in its relationship with smallholder farmers producing botanicals in India. This was enabled through a link-up with Planet Finance, an international non-profit microfinance organisation.

Pernod has also worked with Planet Finance in helping to set up a cooperative to develop the business capacity of smallholder farmers in Armenia. Also in Armenia, Pernod subsidiary Yerevan Brandy Co helps farmers manage crop protection, supplying farmers with crop protection products that comply with environmental standards in France as well as efficient sprayers that enable them to use the precise required amount of pesticides. It also collects and disposes of packaging waste for farmers.

Other sustainable agriculture initiatives cited by Pernod relating to its spirits brands include local sourcing of wheat, in line with "stringent sustainable agriculture standards", for the Absolut brand in Sweden, and the production of fennel in France in accordance with sustainable farming principles which protect biodiversity.

While Pernod may be able to bring more direct practical experience to bear when liaising with agricultural suppliers than most spirits producers, closer cooperation and partnership with agricultural suppliers is a feature of the sustainability strategies of all the major spirits manufacturers.

Bacardi's portfolio profile naturally makes sugarcane a key agricultural commodity, as molasses is one of the main ingredients in rum. In the materiality matrices that have now become a critical tool for companies when developing their sustainability strategies, certain key agricultural commodities will register as extremely high priorities. This would certainly be the case with Bacardi and sugarcane.

Dave Howson, global sustainability director at Bacardi, stresses the importance of Bacardi's membership of Bonsucro, the multi-stakeholder forum focused on improving social, environmental and agricultural standards in the sugarcane industry.

A founding member and "active supporter" of this forum, Bacardi has been working with Bonsucro for six years. "Sugarcane is obviously very, very strategically important for us so we've been involved in looking at developing sustainability within the sugarcane supply chain and industry for the last six years. We've been heavily involved in Bonsucro and will continue to be because we want to grow like any other business, and we can't just assume that we will have more molasses at our disposal. That's where good relationships with our suppliers are so important."

Bacardi has set a target to source 100% of its sugarcane-derived products from Bonsucro-certified sources by 2022, and to make sure that evidence of this is externally verified. As such, it is the first spirits company and the first Bonsucro member to do this.

Bacardi is also helping its agricultural suppliers to achieve Bonsucro certification, for example in Fiji. Fiji is one  of the three principal supplying countries for Bacardi's molasses, along with Brazil and Mexico. Fiji accounts for around 40% of the molasses Bacardi uses and the nationalised sugarcane industry in the country is a leading provider of employment and a major contributor to GDP.

Howson cites a sustainability initiative relating to the supply of molasses in Fiji as particularly noteworthy. The company is partnering with WWF in Fiji on a project to improve farming and mill practices. The project is aimed at boosting productivity and optimising the use of pesticides on farms, while also improving milling standards and allowing its Fijian producers to work towards Bonsucro certification. 

A steering committee for the project has been formed that will establish model sugarcane farms that demonstrate improved agricultural standards and follow WWF's Better Management Practices for sugarcane; promote the use of "mill mud" as a bio-fertiliser; set up a water-quality sampling programme, and recruit an extension officer to support farmers in understanding better management practices for sugarcane farming.

Future plans include undertaking a gap analysis of the Labasa sugar mill and cane production area against the Bonsucro Standard; instituting a 'train-the-trainer' system for training local farmers in WWF's Better Management Practices for sugar; and complete a feasibility assessment for creating renewable energy from bagasse, the fibrous waste material left after sugar has been milled. As a significant biomass source, the bagasse can be burned in a cogeneration unit that produces heat for local use and electricity that can be sold to the consumer electricity grid.

Bonsucro certification for the Fijian sugarcane industry is seen as a long-term goal. However, WWF estimates that, with this form of targeted support, the sugarcane industry in Fiji could achieve certification for all of its mills within five to seven years.

Aside from the production of agricultural raw materials, the other significant contributor to water and energy consumption in the total life cycle of spirits is packaging, which is examined in the final section of this briefing.

The fourth and final part of this briefing can be found here. For full details of the briefing, click here.

Expert analysis

Environmental sustainability in the global drinks industry in 2012

This four-part report takes an in-depth look at the buzz topic of environmental sustainability throughout the global drinks industry. Each chapter looks at the environmental footprint of each drinks category: Beer, soft drinks & bottled water, spirits and wine.

Sectors: Environmental issues, Spirits

Companies: Pernod Ricard, Absolut, Bacardi

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