Sustainability in Spirits - Part I: Water
Part I: Water
Defining a typical or average water-use ratio for spirits production is not easy. Economies of scale often mean the size of the facility is a determining factor, with larger facilities able to maximise efficiencies. Water consumption also varies between spirits types. For example, the production of malt whisky in pot-stills uses more water than grain distilling because of the cooling process employed.
The Beverage Industry Environmental Roundtable's (BIER) report, Water Use Benchmarking in the Beverage Industry, Trends and Observations, 2011, revealed that distilleries have the highest water-use ratio range of all the beverage sectors, with water efficiency across a sample of 46 facilities ranging in 2010 from 9.11 l/l to 63.06 l/l. BIER also observed a 1% improvement in water efficiency across its sample between 2008 and 2010 from an average of 22.10 to 21.86.
Improving water efficiency in the distillery
While some of the major spirits companies moved earlier than others to establish targets around environmental sustainability criteria, all recognise the importance of increasing water efficiency.
In its recently-published Sustainability & Responsibility Report 2012, Diageo announced further progress towards its target of improving water efficiency by 30% by 2015 and to reduce water wasted at water-stressed sites by 50%, against a 2007 baseline. The world's largest spirits producer improved water efficiency by 7.2% for 2012, resulting in a cumulative improvement from the 2007 baseline of 19.0%. Overall water usage, including spirits, beer and wine, has improved from 7.9 l/l in 2007 to 6.4 l/l in 2012.
Michael Alexander, head of environment communications and policy at Diageo, says it has been "a good year" in terms of improving water efficiency and the company was "on track" to meet the 30% goal.
Diageo also recorded an 8.6% improvement in water efficiency at water-stressed sites, although these no longer include any distilleries. Indeed, Alexander says Diageo's George Dickel distillery in Kentucky and its Huntingwood bottling facility in Sydney have been removed from its list of water-stressed sites because of the improvements made in water efficiency at those facilities.
Diageo's experience underlines that, while distilling is a water-intensive process, water is a regionally-defined challenge, unlike carbon which can be aggregated globally. Diageo, therefore, prioritises its water efficiency programme in water-stressed locations, chiefly its African brewing operations. "That's the way it should be," Alexander adds. "We can't prioritise everywhere. Scotland and Ireland aren't water stressed - far from it - and therefore we focus our resources effectively within our Africa business to make the biggest improvement."
Bacardi set itself a target of achieving a 15% improvement in water efficiency per unit of production by 2012 against a 2006 baseline. In fact, it has far exceeded that target, says global technical director Stuart Lowthian. "In terms of water efficiency, we've improved by 40% from our baseline year, against a target of 15%, so clearly we've done very well on that."
In 2008, Pernod Ricard set itself a target of a 10% reduction in water consumption per unit by 2012, against a pro forma 2008/2009 baseline. According to Patrice Robichon, the company's corporate scientific advisor & representative for sustainable development, the group had achieved a 14% reduction on a like-for-like basis by the end of June 2012. The company singles out water efficiency improvements at its Behror site in the water-stressed Rajasthan region of India, in Armenia and in Mexico as being particularly significant.
Meanwhile, water is also a major priority within Brown-Forman's recently-launched Environmental Sustainability Roadmap for 2020. The company's sustainability strategy includes a target of a 30% reduction in wastewater generated per unit of production by 2020, along with targets around energy, greenhouse gas emissions and waste.
Tim Nall, Brown-Forman's director of environmental performance and governmental compliance, concedes that early progress towards the water target has been harder to achieve than on energy, emissions and waste. "Water is not where we'd like it to be but it is moving," he says.
Brown-Forman's primary competitor in the US whiskey sector, Beam Inc, is also in the process of developing its environmental strategy. While Beam has only existed as a stand-alone company for less than a year, Rick Price, director of environment, health & safety, stresses that environmental sustainability is "embedded in the history and heritage or our brands". He also points out that environmental sustainability was prioritised from the company's inception last October. "From day one as a stand-alone company, we issued our first Environmental Sustainability Guide. In the guide, we identified our approach to environmental sustainability and our commitment to continually improve."
While Beam's sustainability guide includes a number of general undertakings, the company's strategy at this stage does not include the same detail in terms of reporting and targets as most of its major competitors. "We are in our first year as a stand-alone company and are still building our external reporting framework for environmental sustainability," Price explains.
Price also points to the behind-the-scenes work currently being undertaken with a view to establishing baseline performance levels and possible targets around total usage and usage rates for water, energy and waste.
"Beam is currently completing a review of three years of global environmental performance data to verify that it is both accurate and precise," Price states. "We are using this data to establish our global baseline performance level and identify potential global reduction targets. Once this work is complete, we will begin to share it with external stakeholders. We are currently developing our global reporting system and establishing our baseline performance level. We will be identifying more specific information about our potential reduction targets and will begin to increase our external reporting capabilities in 2013."
While spirits companies are clearly making progress in improving water efficiency in the distillery, all recognise that the larger water impact of their businesses comes from their supply chains. As with most food and drink companies, these impacts are primarily in the agricultural supply chain but in addition water use in glass production also increases spirits companies' total water footprint.
While initially sustainability strategies of major food and drinks companies were focused primarily on operations under their direct control, increasingly more attention is being paid to impacts along the supply chain, and the spirits sector is no exception. All the major spirits producers acknowledge in their sustainability strategies the importance of quantifying and optimising water usage in their supply chains.
"Increasingly there's an expectation of business to be looking further to their supply chains around water use in particular and agricultural water use, and influencing the supply chains and making a bigger impact that way," says Michael Alexander, "because the vast majority of embedded water within a litre of whisky, or a litre of beer or a litre of vodka, is in the agricultural growing of raw materials. So that's what we're moving towards just like business in general."
Next year's series of management briefings on environmental sustainability will reflect that evolution by focusing on environmental impacts in beverage supply chains. Meanwhile, this briefing continues with an examination of the spirits industry's push to increase energy efficiency and reduce greenhouse gas emissions in an energy-intensive production process.
For part two of this management briefing, click here.
The full table of contents can be found here.
Heineken last week announced plans to build a 1.5m-litre capacity brewery in Ethiopia, which, with the second-largest population in Africa, is a major focus for international brewers....
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