Management Briefing

Is the wine industry collaborating enough? - Sustainability in Wine, Part II

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The fact that the three newest members of the Beverage Industry Environmental Roundtable (BIER) are all wine companies suggests that, in spite of unique factors that set the wine category apart from beer, spirits and soft drinks, there is plenty of common ground and potential for sharing learning and best practice.

While the wine sector clearly has some specific attributes that set it apart from other beverage sectors, this has not prevented a number of major wine companies from participating in the drinks industry's cross-sector technical environmental coalition, the Beverage Industry Environmental Roundtable (BIER). Moreover, while Diageo's exit from the wine sector brings a reduction in the wine industry's presence within BIER, given that Treasury Wine Estates, the new owner of Diageo's primary wine interests, is not a BIER member, the coalition has recently seen a number of notable additions from the wine sector.

Last year, Constellation Brands and Fetzer Vineyards, now owned by Chilean group Concha y Toro, both joined the organisation, while, earlier this month, BIER officially announced that Jackson Family Wines (JFW) had become its newest member.

Common ground

Notwithstanding its distinct characteristics, Eric Thomas, CSR manager at Constellation, believes the common ground between beverage sectors is of greater significance than their differences. "We find there are more similarities than not, when it comes to sustainability in both the beverage alcohol and non-alcoholic beverage industries," Thomas tells just-drinks. "We have strong roots in agriculture, so being good stewards of the land and water is vital for the long-term success of our businesses. Our operations and the issues we face also tend to be similar."

BIER, which is entering its tenth year, has come to be regarded as a successful example of pre-competitive industry collaboration on environmental sustainability. "We joined BIER in 2014 because we see value in the collaborative approach the group takes towards sustainability," says Thomas. "From the tools and benchmarking they provide to the sharing of best practices with others in the beverage industry, our participation gives us access to new ideas and solutions that will help us be a more sustainable business. It also allows us to share insights and learnings where we've had success."

The wine sector, however, is under-represented among the BIER membership. Even though BIER was constituted in the US, the organisation has so far not been able to persuade E&J Gallo to come on board. It has also not been able to attract any of the larger Europe-based wine groups, with the exception of Pernod.

BIER director Tod Christenson believes there is potential to expand the membership of the coalition in Europe and beyond. It is also interesting to note that BIER has added the American Beverage Association (ABA) as a member. The structure and specific characteristics of the wine industry mean there is a plethora of trade associations, many of which have active sustainability platforms. The possibility could exist for a wine trade association to follow the same path as the ABA.

While Christenson concedes that the wine sector may be under-represented in terms of market share, he asserts that the work of BIER members associated with the wine sector provides a good reflection of the "innovation and sustainability achievement and progress" in the category. In this respect, last year's addition of Fetzer, recognised as being at the vanguard of sustainability, particularly in relation to sustainable agriculture, should be seen as a particular boon for the coalition.

Fetzer is "very advanced and doing some very exciting things", says Christenson, adding: "They had the chair at our recent meeting a couple of weeks ago and got the whole group energised about what is possible in the space of sustainable agriculture." This would appear to underline the value of the cross-sector dialogue that BIER embodies. As pointed out in the first section of this briefing, particularly close links with agriculture are a facet of the wine sector which differentiates it from other sectors, suggesting wine companies may have valuable and unique insights, experience and observations related to agriculture to bring to the group.

The fact that BIER groups together companies representing beverage sub-sectors speaks not only to the spirit of cooperation that exists, but also to the value companies perceive in sharing information and experience between categories, another factor that drew Constellation to the coalition. "This cross-sector approach is one that we're comfortable with because Constellation Brands is the largest multi-category alcoholic beverage provider in the US," Thomas adds. "We're always looking to share knowledge across categories."

Benefiting SMEs

One defining attribute of the wine industry is also highly relevant to BIER's mission. As stated in the opening section of this briefing, one characteristic that differentiates wine from other beverage categories is its fragmented structure. As such, there are thousands of SMEs in the wine sector that could benefit from the technical insights of larger companies working in the wine sector and in other drinks categories. In that sense, BIER's work is of particular value to the wine sector. "The wine industry is much more fragmented," says Christenson. "There are a couple of big players, but there are thousands of small wineries, so their capacity to participate is probably much less."

Christenson stresses that all the resources produced by BIER, such as its True Cost of Water toolkit and its Energy Management Guidance, are freely available to any company and not just BIER members.

"One of our mission objectives is to be recognised as the leading sector in terms of environmental sustainability and we cannot achieve that if we don't take along all of its SMEs with us," says Christenson. The open publication of BIER reports and toolkits is "intended to facilitate and accelerate their learnings because they don't have the same resource capacity".

As to whether TWE could be persuaded to join BIER, the company's global corporate affairs director, Roger Sharp, makes no specific comment. "TWE's intent is to add value to all of the industry organisations we participate in across the world," he says. "We regularly review our participation in these organisations as part of our Corporate Responsibility programme."

The wine companies within BIER were, like all the members, signatories to its Joint Commitment on Climate Change, officially published in September. However, in the context of carbon emissions, Sharp points out another factor he believes differentiates the wine sector. "Compared to some other major industries, winemaking is not as intensive when it comes to carbon emissions," he says. "TWE is focused on continuous improvements in the areas where we believe we can make the most impact, for example, water."

Nevertheless, he says the company is "actively benchmarking our energy use to continue to develop a strategic approach to reducing our carbon emissions" and the company reports on carbon emissions within its Annual Report.

Sharp points out that lifecycle analysis reveals that "the majority of carbon emissions occur in the manufacture of glass and transport" and says the company continues "to work with our suppliers to reduce this impact through, for example, reduced glass weights and our approach to bottling".

The third section of this briefing looks at how growth in the draft wine sector is reducing the number of wine bottles which have to be produced, filled and labelled, with clear environmental benefits.

The full contents of this briefing can be found here.

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