{"id":26374,"date":"2017-11-15T22:48:07","date_gmt":"2017-11-16T03:48:07","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/anheuser-busch-inbev-ab-inbev-troubles-brewing-as-climate-changes-impact-the-beer-industry\/"},"modified":"2017-11-15T22:48:07","modified_gmt":"2017-11-16T03:48:07","slug":"anheuser-busch-inbev-ab-inbev-troubles-brewing-as-climate-changes-impact-the-beer-industry","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/anheuser-busch-inbev-ab-inbev-troubles-brewing-as-climate-changes-impact-the-beer-industry\/","title":{"rendered":"Anheuser-Busch InBev (AB-InBev): Trouble\u2019s brewing as climate changes impact the beer industry"},"content":{"rendered":"

Water shortage is real.<\/strong><\/p>\n

As Green House Gas (GHG) concentrations keep rising, their impact on the earth becomes more and more pronounced. The first effect is seen in the form of the rising temperature of the planet as the atmosphere is capturing more heat than it is releasing leading to an accumulation of the heat on the earth\u2019s surface. These higher temperatures have led to shrinking glaciers, altered precipitation patterns and have worsened the extremes of floods and droughts alike. [1] Erratic rainfall leads to fear of water shortages in areas and industries depended on agriculture. Higher temperatures make water bodies favorable breeding environments for insects and other disease carriers leading to lack of access to clean water. [2]<\/p>\n

Why should AB-InBev care?<\/strong><\/p>\n

Water is an integral part of beer \u2013 right from being used while growing barley (a key ingredient in beer) to brewing the beer. Water itself is a key ingredient of beer: \u2018Without water there is no beer.\u2019[3] With this key ingredient becoming an increasingly scarce and unreliable resource, measures need to be taken to reduce water usage and lead water sanitization efforts.<\/p>\n

What is AB-InBev doing?<\/strong><\/p>\n

AB-InBev\u2019s water usage reduction strategy is well captured in the sentence \u2018Conserving water from seed to sip\u2019.[4] Once AB-InBev (ABI) looked beyond their operational walls to understand their water usage, they discovered that 90% of the company\u2019s water usage is concentrated at the barley grower\u2019s part of the supply chain. [5] Along with implementing efficient irrigation techniques, ABI has also partnered with agriculture based weather stations to lead usage of innovative technology which helps reduce the unpredictability in water availability. This is done by optimizing amount of irrigation with respect to predicted rainfall and local soil conditions. They are also collaborating with global seed research hubs to identify drought resistant barley seed varieties that can get them the same yield with 40% less water. [6]<\/p>\n

Through efforts such as onsite water efficiency projects, watershed protection for brewing materials and overall operations, employee engagement and water access programs, ABI has also reduced the water used at their breweries to 3.14 hectoliters of water per hectoliter of beer by 2016 (11% reduction since 2012).[7]<\/p>\n

Recognizing the need to champion water access along with conservation, ABI has partnered with water.org<\/em> to come up with \u2018The Stella Artois Buy a Lady a Drink campaign\u2019. As part of this campaign, every time someone buys the limited-edition Stella Artois Chalice, ABI donates $6.25 to water.org. This $6.25 provides clean drinking water to 1 person for 5 years. [8]<\/p>\n

Another indirect water conservation initiative has been undertaken by ABI’s disruptive arm (ZxVentures). Undertaking a ‘Save the Barley’ campaign to create ‘Saved grain’ from \u2018Spent grain\u2019. Spent grain is the barley that remains post the beer making process and is usually used as animal feed. ZxVentures backed CANVAS instead found a way to convert it to a high fiber \u2013 protein \u2013 nutrition drink named CANVAS. This increases the overall \u2018productivity\u2019 of the water used to grow barley since it provides more products per kg of barley grown and harvested. [9]<\/p>\n

What else can ABI do?<\/strong><\/p>\n

Staying where you are in today\u2019s fast moving, fast changing world (even from a climate impact perspective) is as bad as walking backwards. ABI needs to continue accelerating their water reduction efforts and set aggressive targets for the same.<\/p>\n

Along with direct water reduction efforts, a large piece of the puzzle is to reduce energy used during brewing process so as to reduce GHG release which will reduce impact on the climate and hence increase water availability. Though ABI has dedicated some efforts around efficient energy utilization, there are various low, medium and major cost opportunities to further optimize this. These opportunities range from having a strict \u2018turn off equipment when not in use\u2019 policy to collecting steam condensate and purchasing and installing efficient equipment. The brewing, packaging and utility support are the three main buckets that have a high potential for energy reduction. [10] Enhancing their ability to replace present energy sources with onsite renewable energy sources, is another direction that ABI can move in since this is the most sustainable method of reducing GHG release.<\/p>\n

Unanswered questions!<\/strong><\/p>\n

The success of the agriculture industry is being questioned due to its dependence on the ever-changing climate. Given the reality of resources being limited, how should ABInBev think about their short and long-term investments for water-conservation – invest in core R&D of seeds that can withstand adverse climates and need less water to survive OR<\/u> in existing technologies for water\/energy usage reduction?<\/p>\n

The process of growing barley, brewing and packaging beer will continue to be a water intensive industry, albeit less than before. Given the present and future context and the preciousness of water as a resource, should\/will consumers fundamentally reject the beer industry over time?<\/p>\n

Word count: [800]<\/p>\n

——————————————————————————————————————————————————————————<\/p>\n

References:<\/strong><\/p>\n

[1] Time for change article (Crystal Davis: EarthTrends Update: November 2007 “The Multiple dimensions of water scarcity”):\u00a0http:\/\/timeforchange.org\/water-scarcity-and-global-warming<\/a><\/p>\n

[2] HBS document: Climate Change in 2017- Implications for Business<\/p>\n

[3] AB-InBev website link 1: http:\/\/www.ab-inbev.com\/better-world\/a-cleaner-world\/water.html<\/a><\/p>\n

[4] GreenBiz 2010 article by Angie Slaughter: https:\/\/www.greenbiz.com\/blog\/2014\/06\/10\/how-anheuser-busch-conserves-water-seed-sip<\/a><\/p>\n

[5] GreenBiz 2015 article by Kelli Barrett: https:\/\/www.greenbiz.com\/article\/when-beer-and-water-mix-abinbev-teams-conservation<\/a><\/p>\n

[6] Sustainable Brands 2015 article by Kim Soko Schaefer: http:\/\/www.sustainablebrands.com\/news_and_views\/leadership\/kim_soko_schaefer\/-b_inbev_how_global_brewer_setting_bar_innovation_local_<\/a><\/p>\n

[7] AB-InBev website link 2: http:\/\/www.ab-inbev.com\/better-world\/a-cleaner-world\/water\/watershed-protection.html<\/a><\/p>\n

[8] Stella Artois website: http:\/\/www.stellaartois.com\/en_us\/buy-a-lady-a-drink.html<\/a><\/p>\n

[9] Kickstarter article on CANVAS: https:\/\/www.kickstarter.com\/projects\/savethebarley\/canvas-a-new-type-of-beverage-made-from-saved-grai<\/a><\/p>\n

[10] Brewers Association – https:\/\/www.brewersassociation.org\/attachments\/0001\/1530\/Sustainability_Energy_Manual.pdf<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

With water being a critical part of the beer making process, ABInBev takes charge of reducing its Water footprint in a changing world where water demand may soon overtake supply.<\/p>\n","protected":false},"author":10158,"featured_media":26433,"comment_status":"open","ping_status":"closed","template":"","categories":[1218,130,4075,1815,1889,427,3456,3336,1637,1381,3457,1480],"class_list":["post-26374","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-climate-change","category-energy-efficiency","category-food-and-agriculture-organization","category-food-and-beverages","category-waste-management","category-water","category-water-efficiency","category-water-footprint","category-water-management","category-water-scarcity","category-water-stress","category-water-use-reduction","hck-taxonomy-organization-ab-inbev","hck-taxonomy-industry-food-and-beverage","hck-taxonomy-country-united-states"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/rc-tom-challenge-2017\/","yoast_head":"\nAnheuser-Busch InBev (AB-InBev): Trouble\u2019s brewing as climate changes impact the beer industry - 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