Management Briefing

Sustainability in Soft Drinks - Part I: Looking Forward to 2020

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In common with several global brewers, the world's major soft drinks producers have identified 2020 as a significant target date in their sustainability strategies. In the opening section of this year's Sustainability in Soft Drinks management briefing, Ben Cooper looks at what the sector's leading players hope to have achieved by 2020.

It is no surprise to see that the turn of the next decade is viewed as a compelling milestone for the world's major soft drinks producers, just as it has for four of the world's major brewers. Targets for 2020 can be found in the sustainability strategies of leading soft drinks manufacturers, giving a clear picture not only of what they consider to be the most pressing priorities for the sector, but also the rate of progress that can be anticipated in those key areas for the coming five years.

The Coca-Cola Co's 2020 Vision is defined as "A Roadmap for Winning Together" for the company and its bottling partners, and thereby comprises many commercial aims, not least to have doubled the size of its business by 2020. However, sustainability aspirations and metrics are also afforded significant prominence, underlined in the letter from chairman & CEO Muhtar Kent, which introduces Coca-Cola's 2013-2014 Sustainability Report. Kent says pursuing the goal of doubling the size of its business will take "next-level creativity, partnerships, marketing, distribution and marketplace execution". It will also require the company "to operate more sustainably. For our business. For our stakeholders. And for the broader world beyond".

The 2020 Vision includes overarching environmental goals to show "global leadership in sustainable water use" and "industry leadership in packaging, energy and environmental protection", as well as human sustainability goals, notably relating to the empowerment of women, which, along with water and well-being, is one of the three primary pillars of Coca-Cola's sustainability strategy.

Specifically with regard to water, the company is working to "balance" the water it uses by 2020, returning to communities and to nature an amount of water equivalent to that used in its beverages and their production. In its 2013-2014 Sustainability Report, Coca-Cola states that it is "on track" to achieve that goal, replenishing an estimated 68% of the volume of finished beverages in 2013 and returning some 108.5bn litres to communities and the environment. This has been achieved through no fewer than 509 community water partnership projects across more than 100 countries.

Coca-Cola's other 2020 environmental goals are:

  • to improve water efficiency by 25% against a 2010 baseline
  • in packaging, to reach a 75% recovery rate for the number of bottles and cans equivalent to the volume it introduces in developed markets
  • to ensure that all new PET plastic it uses in packaging contains PlantBottle technology
  • to reduce the carbon footprint of the "the drink in your hand" by 25%, and
  • to sustainably source key agricultural raw materials.

PepsiCo, meanwhile, also boasts sustainability targets for 2020 in its Performance with Purpose sustainability strategy. One of the group's 2020 human sustainability targets is a pledge to reduce the average amount of added sugars per serving in its key global beverage brands, in key countries, by 25% by 2020 against a 2006 baseline.

Sugar is not only a sustainability issue for major soft drinks producers in terms of the impact their products have on consumers, but also on the impact the companies have on agricultural suppliers and their communities, both in environmental and social terms. Ulrike Sapiro, sustainability director at Coca-Cola, will be among the speakers at a major two-day conference on the sustainability of sugar supply chains to be hosted this week in London by the Innovation Forum, a company specialising in sustainability events, analysis and training.

Like Coca-Cola, PepsiCo is a member of Bonsucro, a non-profit organisation dedicated to reducing the environmental and social impacts of sugar. PepsiCo is working with Bonsucro and other stakeholders to evaluate certification standards that can help it meet a goal to source 100% sustainable cane sugar by 2020.

In its 2014-2015 Corporate Responsibility and Sustainability Report, published this month, Coca-Cola Enterprises (CCE) states that all of its sugar beet suppliers have agreed to adopt its Sustainable Agriculture Guiding Principles by 2020. The company is committed to sourcing 100% of its key agricultural ingredients sustainably by 2020, working in partnership with the Coca-Cola Co, which has committed to the same aim. The new CCE report sets out what the company describes as its "most ambitious sustainability targets to date", including a commitment to reduce the absolute carbon footprint of its core business operations by 50% by 2020. This, the company says, will "reduce the carbon footprint of the drink in your hand by a third".

CCE has already set out its "2020 vision", to "inspire and lead change for a more sustainable tomorrow", while growing a "low-carbon, zero-waste business". In fact, the company set a target to reduce the absolute carbon footprint of its business operations by 15% by 2020, against a 2007 baseline, but met this target seven years early in 2013 with an actual reduction of 23%.

Another expanded 2020 target unveiled in the latest report is to source 40% of its manufacturing energy from renewable and low-carbon sources, increased from an existing aim of a 35% ratio. In transportation and distribution, the company has increased its commitment to deliver a case of product in 2020 with 20% less carbon emissions than in 2007 to a 30% reduction against the same baseline.

Ensuring a water-efficient operation is described as key to its water stewardship strategy. CCE has committed to reduce its water use ratio to 1.20 litres per 1-litre of product by 2020 and, according to its latest report, is well on the way to achieving that objective. It reports that its water use ratio stood at 1.36 litres/litre in 2014, a 17% reduction from 1.64 litres/litre in 2007 and flat against a restated 2013 figure.

Also by 2020, CCE has committed to return to nature the water used in its beverages, where it is sourced from areas of water stress, by investing in community-based water programmes. The company also aims to recycle more packaging than it uses by championing improvements to collection schemes and investing in strategic recycling infrastructure projects. The company has pledged that by 2020, 40% of the PET it uses will be recycled PET and/or PET from renewable materials.

The compelling power of the 2020 landmark and the link between sustainability and reputational capital is also underlined by UK soft drinks producer Britvic's stated desire to achieve its "2020 vision of becoming one of the world's most admired soft drinks companies". Britvic also includes both human and environmental sustainability goals for 2020 in its overall sustainability mission.

Under the consumer health banner, the company pledges to reduce the average calories per serve across its portfolio by a further 20% by 2020 and label the calorie content on pack within all its markets, while also using "the power of our brands to inspire 20m people to actively play together". Another key 2020 human sustainability commitment concerns female representation in senior management, with a 2020 goal to have at least 40% female representation within senior management levels by 2020. Britvic states in its 2014 Sustainable Business Report that it has 25% female representation on its board and that 35% of its senior managers are women. The company's sustainability strategy also boasts a 2020 target on community volunteering.

Having identified climate change, water stewardship, packaging and its subsequent disposal and responsible sourcing as the four key focus areas in terms of environmental sustainability, the company has numeric 2020 targets for water intensity and greenhouse gas emissions. Britvic has committed to reduce the water intensity ratio to 1.4 litres/litre by 2020. Its water intensity ratio currently stands 1.93 litres/litre. Interestingly, the company is further ahead in terms of this ambition in France, where it has already successfully lowered its water intensity ratio to 1.5 litres/litre.

Britvic has also set itself a target of a 20% reduction in its direct (Scope 1 & 2) greenhouse gas (GHG) emissions ratio by 2020 against a 2012 baseline. This would represent a 15% reduction target against the company's GHG performance in 2014.

While the company has no numeric 2020 target related to packaging, it has as one of its 2020 "ambitions" to "innovate our packaging to make it increasingly sustainable, minimising our impact on the environment". In its 2014 Sustainable Business Report, the company says it is aiming to develop a sustainable packaging strategy this year.

The next section of this briefing looks at how leading soft drinks producers are acting to boost packaging recycling rates in the US and the challenges created by the lack of an adequate recycling infrastructure.

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