Companies that are heavily reliant upon agriculture should be worried about climate change.\u00a0 While some laboratory studies have shown that warm weather and higher levels of CO2 in the atmosphere can generate better growth, these benefits are largely offset by the other changes that occur as a result such as extreme weather and thriving pest populations.\u00a0 Additional stress will be placed on this system due to population growth.\u00a0 By 2050, the population is estimated to grow to 9 billion people and agricultural production will need to double in order to feed everyone.\u00a0 Previous production increasers, such as clearing rainforests and heaving fertilizer usage will only continue to exacerbate the growing climate issues.\u00a0 Addressing this changing environment will be especially important for an organization like AB-InBev, whose grain use does not go towards feeding the population, but goes towards \u201cextracurricular\u201d uses \u2013 alcohol.\u00a0 As the population increases, it stands to reason that alcohol consumption will also increase, but alcohol producers will likely need to watch their sustainability practices much closer than food producers.<\/p>\n
AB-InBev is doing quite a lot already to address climate change and its potential affect on their supply chain.\u00a0 They have about eight overarching environmental goals that they had hoped to achieve by 2016 including protecting watersheds and reducing greenhouse gas emissions per hectoliter of production by 10% globally and 15% in China.\u00a0 They surpassed many of these goals before 2016, indicating that they have the potential to do even more (as they should) to reduce their footprint.\u00a0 Just recently, in September, ABI partnered with Thunder Ranch, a wind farm set to open in the next several months.\u00a0 The amount of energy purchased represents about half of the Anheuser-Busch annual usage, a good step in parent company ABI\u2019s goal to use 100% green energy by 2025.<\/p>\n
Specifically related to agriculture, they are leveraging their size and resources to help the many growers in their supply chain to improve productivity and competitiveness.\u00a0 AB-InBev started a program called SmartBarley in 2013, a global platform for barley growers to document trends and yields.\u00a0 It has created a community in which growers can share best practices moving forward.\u00a0 ABI has also provided technology to help measure different metrics such as nitrogen content (for the purposes of fertilizer management programs).\u00a0 Currently, the program is open to growers who have contracted with ABI in the past but will be open to new growers in coming years.\u00a0 While barley is a good choice for ABI considering their use of the project, it would be interesting to see them not only open this platform to all barley growers but to other crop producers as well.\u00a0 Many of the best practices learned in increasing yield are likely transferrable to other major crops as well.<\/p>\n
Along this vein, ABI has been working to support the communities as well as the agriculture.\u00a0 They have invested in resources for small growers, such as the Nile Breweries Limited program in Africa.\u00a0 These programs provide training for smallholder farmers and provide a steady income stream.\u00a0 That said, not everyone can or should grow barley.\u00a0 ABI has worked to develop beers out of local ingredients such as sorghum and cassava. \u00a0Similar partnerships exist with small distributors all over the world.\u00a0 While not directly related to climate change, these partnerships have the dual benefit of helping local communities and allowing ABI to have tight control of how the famers operate.\u00a0 Best practices can spread down the line.<\/p>\n
Watershed protection is one of ABI\u2019s most important initiatives.\u00a0 Similar to their look at agriculture, they have addressed water protection both internally by reducing water usage (outside of water used for the product) and externally by partnering with organizations such as water.org and protecting watersheds in the communities in which they work and serve.<\/p>\n
ABI is one of the largest CPG companies globally and they\u2019ve taken several steps to address the stress climate change will place on their supply chain, but they can do more.\u00a0 As mentioned, they have the resources to invest in knowledge and best-practice spreading outside of their core competencies.\u00a0 Additionally, after looking at their Better World Report, while they have made some strides in reduction of waste \u2013 including over 99% of production waste used in some other process \u2013 there is still a significant amount of work to be done in recycling efforts and packaging waste management.<\/p>\n
My two questions to my classmates are the following:<\/p>\n
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Sources used:<\/p>\n
http:\/\/www.ab-inbev.com\/better-world\/how-we-manage-sustainability.html<\/a><\/p>\n http:\/\/www.ab-inbev.com\/content\/dam\/universaltemplate\/ab-inbev\/BetterWorld2\/reporting\/better_world_report\/ABInBev_2016BWR.pdf<\/a><\/p>\n https:\/\/19january2017snapshot.epa.gov\/climate-impacts\/climate-impacts-agriculture-and-food-supply_.html<\/a><\/p>\n https:\/\/www.cnbc.com\/2017\/09\/14\/anheuser-busch-enters-into-renewable-energy-partnership-with-enel-green-power.html<\/a><\/p>\n http:\/\/nca2014.globalchange.gov\/report\/sectors\/agriculture#intro-section-2<\/a><\/p>\n https:\/\/www.nationalgeographic.com\/foodfeatures\/feeding-9-billion\/<\/a><\/p>\n