In the main, it’s fair to say drinks companies have faced less scrutiny of their ESG records than their counterparts in food but the attention being placed on the beverage industry is growing.
Much of the spotlight on the drinks industry has tended to focus on companies in the soft drinks sector and their use of plastic. Coca-Cola Co., for example, attracted criticism in December for the changes it has made to its ESG goals, including in the area of packaging.
But the progress (or otherwise) those in beverage alcohol are making to make their businesses more environmentally sustainable is also being examined, particularly on the topics of energy use, production, packaging and water.
It was against that backdrop that industry executives and ESG specialists met in London for a one-day forum focusing on sustainability in the beverage industry.
Representatives from Pernod Ricard, Heineken, Suntory and Tropicana were among those who discussed their companies’ sustainability initiatives at the Eco Drinks 2025 conference in London’s financial district.
What became clear at the event was there was a recognition among the attendees the drinks industry is making headway but that a lot of work needs to be done – and a lot of challenges need to be overcome.
The business imperative was laid bare by Jonas Van Eykeren, site and operations director at juice giant Tropicana Brands Group.
“Sustainability goals have gone from a nice-to-have, to a legal obligation, to a core requirement of all customers and consumers. And honestly, I don’t see that changing, not in the coming two to three years, not in the coming decades,” Van Eykeren said. “I think it will only intensify.”
Water is testing
The Tropicana executive was on a panel that principally discussed two topics: water and energy. Food and drinks companies know they have a pivotal role to play in tackling the world’s water crisis. How companies manage their use of water is becoming a prominent ESG issue but there are questions about whether they are doing enough and how quickly they are acting.
Van Eykeren outlined a series of ways Tropicana is seeking to reduce its use of water in its supply chain and reuse what flows through – and highlighted one consequence of its wastewater process at the factory in Belgium where he works. “The sludge that is generated there is used by local farmers to regenerate their farmland so that they don’t have to use as much chemical fertilisers as much,” he said. More on fertilisers later.
Alongside Van Eykeren on the panel was George Shepherd, global technical sustainability manager at GEA, the processing and engineering group that works with food and beverage groups. Water, he said, is a pressing issue for his clients. “Water conservation is often quite a big talking point and, in some places, surprisingly, actually sits higher up in terms of importance than carbon generation itself, especially in some water scarce areas,” Shepherd said. “We’ve had inquiries from customers regarding CIP [clean-in-place] technology and heat-pump technology purely for the water-saving benefits, rather than the carbon-saving benefits.”
With water stewardship often be limited to improving water use in manufacturing, Van Eykeren was asked by Just Drinks how drinks companies can work on how their agricultural suppliers use water. He cited Tropicana’s work with a citrus supplier in the heat of Brazil to mitigate against the evaporation of water they collect, or to avoid spraying fields at midday. It’s common sense but you need to check with your supplier if they do it in that way.”
Van Eykeren also fielded one thought-provoking question from the audience: would Tropicana ever consider water reuse within its products? If not, how would consumer perceptions or regulatory constraints have to change for the company to do so?
He said: “Would something need to shift? Perhaps consumer perception a little bit. Most people are becoming open to the idea of it. We already have plants that reuse water and clean it to such an amount that it is okay for consumption.
“I think nobody would doubt the fact that NASA, in their spaceships, is also reusing water for the astronauts. There, we think it’s normal but, still for most consumers, I think today it would perhaps be a bridge too far. I believe that in the near future most companies will move to that way of working.”
Reducing emissions in production
Like their counterparts across FMCG, Scope 3 emissions often account for the biggest share of a company’s emissions.
The bulk of a typical drinks manufacturer’s emissions are usually defined as Scope 3 emissions. Under the internationally-recognised Greenhouse Gas Protocol, an organisation’s emissions are split into three ‘scopes’.
Scope 1 covers direct emissions from owned or controlled sources. A second, Scope 2, covers indirect emissions from the generation of purchased energy consumed by the reporting company. Scope 3 includes all other indirect emissions that occur in a company’s value chain – and these can be ‘upstream’ (emissions generated by ingredient or packaging suppliers, say) or ‘downstream’ (generated in the selling and consumption of products).
Scope 3 emissions can account for 90-95% of a drinks manufacturer’s emissions – and, if a company is serious about aligning its business with the UN’s climate goals, it’s clear these need to be tackled.
However, with Scope 3 emissions occurring throughout the value chain, they can be hard to calculate and, given a drinks manufacturer is working with numerous actors, difficult to address and reduce.
Unsurprisingly, therefore, so far, the efforts of many manufacturers on emissions have focused on what’s more in their gift, especially from their production.
During the morning session at Eco Drinks, Sandrine Ricard, the director for sustainability and responsibility communications at Pernod Ricard and at the spirits giant’s Scotch whisky arm Chivas Brothers, gave a keynote address in which she outlined how the division is using heat-recovery technologies to reduce emissions in the distillation process.
Chivas Brothers has a target to achieve “carbon-neutral distillation” by 2026. Distillation, Ricard told the event, was the company’s third-biggest source of emissions behind agriculture and packaging.
During distillation, boiling the stills is a carbon-intensive process. Chivas Brothers is using mechanical vapour recompression, or MVR, heat-recovery technology to capture energy from the spirit vapour, use it to boil the still and eat into its carbon emissions.
“For one unit of electricity, you get 12 units of heat. That’s quite a return on the investment if you ask me,” Ricard said.
Last year, a trial of the MVR technology at the Glentauchers distillery in Scotland resulted in a 48% reduction of energy consumption and a 53% reduction in CO2 emissions. Once the tech is fully implemented at Glentauchers, Chivas Brothers intends to roll it out at more sites by 2026.
Shepherd at GEA says heat-pump technology can be “a big win” for its customers in the drinks industry looking to reduce their emissions. “We’re obviously talking to our customers about reducing their consumption first of all,” he told the event. “’Why are you pasteurising at this temperature? Why are you boiling at this temperature? Can we reduce that?’
However, in areas like refrigeration, Shepherd said there remains some concerns about heat-pump technology among some of GEA’s clients.
“Often customers are sceptical regarding heat pumps,” he said. “It’s like a lot of innovative and newer technologies: there’s often scaremongering and there’s also real-world cases where things are put in and they’re not designed properly. A lot of that happens in the domestic market. That’s why we take it back to basics and say … the only change is the equipment itself, the ability to run things at higher temperatures, at higher pressures. The physics behind it remains the same.”
The challenge of Scope 3
An afternoon panel session at Eco Drinks explored how drinks manufacturers and brands could better work with their suppliers to try to tackle their Scope 3 emissions.
One significant challenge for companies along the supply chain is collecting data, measuring and analysing the numbers and then meeting reporting requirements.
Bertel Haugen, head of innovation and sustainability at UK dairy-alts business Rude Health, said the EU’s corporate sustainability reporting directive, or CSRD, had helped the business work with its suppliers on measuring impact.
“CSRD for us has made the biggest impact, because five years ago, when we started asking our co-manufacturers, mainly based in the EU, questions about their Scope 1, 2, 3 we got a lot of blank faces,” he said. “Now if I ask the same questions, they’ve already started work on it. They can give me some information. They can give me Scope 1 or 2 at least, and they’re working on Scope 3. That’s an example of where regulation is helping us build our knowledge of our supply chain, just by kind of forcing everyone to think about it a lot more.”
It’s clear, though, that it is a long process to get a handle on a company’s environmental impact along the far ends of the value chain. Charlie Kingsley, corporate sustainability manager for Suntory Food & Beverage in Great Britain and Ireland, gave a wide-ranging presentation about the Ribena owner’s relationships with its blackcurrant growers but noted how ingredient suppliers can differ in how much work they’ve done in estimating their impact.
“We have a globally-led ESG procurement programme where we’re collecting GHG data and other sustainability KPIs and metrics to assess exactly where these suppliers are. How we collaborate with them is very different and depending on where they are on their maturity level,” Kingsley explained.
“We’ll have some suppliers right at the bottom who are starting off on their sustainability journey. We are also going to get some suppliers right at the top, who are leading the way and at the forefront of sustainability. In some cases, we would like to learn off them and see where we can collaborate with them in that aspect. You can see there are there are different ways in which we interact with our supply base. It’s definitely not a one-size-fits-all.”
Looking downstream
Scope 3 emissions aren’t just generated upstream with suppliers. Further downstream, there is the customer and consumer and their impact on the environment.
Eco Drinks closed with a presentation by Diageo executives Sasha Kumar and Bianca Woolley. They didn’t take questions but their session sought to outline how the company is trying to, in Kumar’s words, “engage” the consumer on sustainability.
Kumar, who works with Diageo’s sustainability innovation team, cited data from Kantar and BCG that “when it comes to the beverage industry, 68% of consumers say that they care about sustainability but only 12% currently buy what they consider to be more sustainable options”.
He said “sustainable products” are often more expensive or hard to find. Consumers also “don’t always have the confidence to know if sustainable products are going to be any good”, Kumar added. “They’re inundated with information on sustainability and misinformation, and that can lead to conflicting messages or mistrust of sustainability claims.”
However, he argued there are openings to capture consumer interest if brands can understand how to “speak about sustainability in a way that appeals to the masses”.
“Consumers won’t choose the most sustainable option, if it’s less attractive or there’s a perception of sacrifice and so we need to develop and communicate these options in a way that actually increases their appeal.”
Diageo has rolled out in so far limited fashion different types of packaging on certain brands to see how they fared. It’s tested aluminium and paper bottles for Baileys and, last year, claimed to have launched the “world’s lightest whisky glass bottle” for its Johnnie Walker Blue Label Ultra – a whisky priced at £1,000.
“I’s easy to think that consumers don’t care much about sustainability in our category because we are predominantly packaged in glass and we don’t make up a big part of any consumers annual carbon footprint,” Woolley, a global marketing sustainability manager at Diageo, said. “This doesn’t mean that consumers don’t care. It does mean that we need to make sure that our sustainability innovations are really desirable for consumers.”
The back of 2024 also saw Diageo launch Everpour, a keg and dispense system devised to help reduce the carbon emissions of its packaging. The system allows on-premise customers to refill a dispensing bottle of Smirnoff. Once the keg is empty, it is collected, cleaned and refilled by Diageo and re-distributed to bars.
“It dramatically reduces the amount of single-use glass in circulation. It reduces the recycling cost for pugs, and it makes life a lot easier for the bar staff,” Kumar said.
The extent to which Diageo will further roll out these efforts remains to be seen, of course. But Kumar and Woolley argued a brand’s sustainability credentials can combine with more “core brand claims” to win over the growing cohort of interested consumers.
Kumar said: “We believe that, if all other things are equal, that sustainability is the tie breaker and, if we make our innovations great, easy, desirable and sustainable, that the consumer will always choose the more sustainable option. By providing them with these options, we stand a much greater chance of achieving not only our own sustainability goals, but our goals as a wider industry.”
