FDBusiness.com

Juggling sustainability with customer expectations is a daily balancing act for brewery firms like Molson Coors. The solution it would seem lies in not in the beer, but the packaging, as Maxine Perella finds out.

“I don’t think consumers come to a beer brand for education around sustainability,” Molson Coors’ head of corporate responsibility Debbie Read reflects. For her company – a leading brewery and distributor of brands such as Carling, Cobra, and Coors Light – customer perception is king when it comes to delivering on green ambitions. “We will innovate enough that we have an environmental and cost benefit, but not enough to have a detrimental brand impact,” she says.

It’s a philosophy that seems to be serving the beer maker well. Last year Molson Coors launched a new 2020 sustainability strategy to integrate management around its energy, water and waste commitments. One cornerstone of the strategy focuses on packaging reduction – an area where the company is making good progress, particularly in the UK. It is currently ahead of a global target to reduce the weight of primary packaging sold by 4% by 2015 (compared to a 2012 baseline); in 2013 it achieved a 6% reduction.

“We are delighted about this, but also a little bit scared,” Read admits. “One of the things that has helped us is that there has been a switch in some of our global markets towards aluminium packaging, away from glass. But that’s a trend we know is coming to an end.” She feels progress going forward on this front won’t be quite so dramatic. “Consumers like glass, we are seeing the growth of craft markets and the cider market where glass is particularly popular. If anything, glass is starting to pick up again – that will have an impact on our packaging targets going forward.”

Balancing act

One early success story has been the lightweighting of the Cobra beer 660ml glass bottle in the UK due to a supplier renegotiation. A 10g reduction per bottle was achieved, given an annualised weight saving of 173 tonnes. This change was implemented at the end of March 2013, providing a 135 tonne saving for that year. “This was a large bottle – it is heavily embossed with images that tell the Cobra story so we looked at opportunities where we could take weight and cost out of the bottle, but still keep the look and feel of the bottle and the brand,” Read explains.

She adds: “With packaging you have this fine line between lightweighting to such a point that you end up with a product quality issue, or a perception of quality issue. We need to make sure we are balancing that fine line.” Investment is crucial to this – as part of a £75m investment programme, Molson Coors has installed a new packaging line, bottling line, and energy centre at its biggest UK brewery in Burton-on-Trent. This led to another innovation, the Carling brand being packaged in wrap film instead of carton board, resulting in 60% weight savings and 4% carbon savings.

Despite these benefits, Read points out that there are still challenges around consumer messaging. “This film wrap technology means a number of our can products are now wrapped in plastic film, rather than traditional carton board. But consumers are quite wary of that – their perception is that cardboard is good and plastic is bad. We have on-pack messaging around recycling, but I think consumers aren’t quite there yet with plastics … they don’t consider the long-term supply chain implications of factors like weight, distribution, and embedded energy.”

Landfill-free

Like other brand leaders, Molson Coors applies lifecycle assessment to all of its packaging. Beer being a consumer product means the company can’t directly control what happens to its packaging once it leaves the supply chain, but where it can exert some influence is in the finishing process. “We do have some end-of-life challenges around some of our labels, not all of them dissolve well enough in the recycling process, they leave quite a gooey mass,” Read says. “Part of this is to do with the fact some of our labels are laminated so we are working with our suppliers to get those labels to a point where they dissolve better so they can be recycled and reused as a pulp.”

Working towards zero waste is a core drive for the company. It has a global target to be landfill-free by 2020, currently 16% of its waste is still sent to landfill – but not in the UK. Its three main brewery sites here have been landfill-free since 2012; during 2013 this saved the company around 160,000 in landfill taxes. “We are now working on upgrading that waste to move it up the waste hierarchy,” Read says. “We are quite fortunate in that we have a relatively simple supply chain, beer is essentially an agricultural product. More than 95% of our waste stream is spent grain and spent yeast and we are able to use a lot of that in cattle feed, compost, and soil improvers.”

She adds that the challenge now is to add value to that revenue stream and build in supply chain resilience. “We are looking at new outlets for our waste streams. A lot of our spent yeast goes to Marmite production, but we are now sending some of it to pet food manufacturers to ensure that we are not just reliant on one service provider.”

Business benefits

Looking further afield to the company’s international operations – it operates as MillerCoors out in the US – Read says that more work needs to be done around the perception of waste. “In the UK and Europe, the public generally understand that landfill is bad. In a country like Canada, landfill isn’t a challenge, the country has an awful lot of land and very few people so this message is not quite engrained within their culture yet. We must educate [our international sites] more about waste being a resource, it’s about showing them the benefits and that you can create revenue from it.”

Certainly, the 2020 strategy seems to be paying off. Asked if she could quantify the total cost savings to the business if all of the 2020 goals were met, Read replies: “Based purely on the environmental element of our strategy, we are looking at delivering around $16m (US) a year of savings. I don’t think there will come a point where we will hit diminishing returns with this drive. There will always be a continual push on industry to do more, I think we have a responsibility to keep innovating and because of that, those diminishing returns will always stay just out of reach.”

Maxine Perella