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With ESG now very much a ‘need-to-have’ aspect of a business strategy, many in the spirits industry have realised that an integrated approach is the only way forward.
The production of spirits involves processes that don’t lend themselves particularly well to sustainability. Indeed, the very nature of distillation is intensive in terms of energy and water use, while also creating by-products that, without the correct treatment, are not easily reused and are often hazardous to the environment.
Furthermore, the broader issues around environmental, social and governance [ESG] have become ever-more complex and multifaceted in recent years, moving beyond pure environmental concerns to encompass the way that companies are run, how their workforces are treated and what they do to benefit their local communities.
Subsequently, companies are devoting ever more resources to developing a holistic approach to ESG. For instance, Spiribam, which operates the Fonds-Préville rum distillery in Macouba on the isle of Martinique, has its ‘Edden’ [‘Committed to the Sustainable Development of Ecosystems & Nature’] CSR policy.
Developed over the last two years, Edden is reinforced by the company joining the UN Global Compact, with its ten fundamental principles based on 17 sustainable development goals, in 2021.
“Becoming a member has enabled us to remain constantly vigilant and to keep a regular watch on all ESG-related issues,” says Spiribam’s QHSE [quality, health, safety, environment] & CSR manager, Fanny Pougeoise. “In order to constantly improve and remain in phase with current events, ESG workshops are organised at the [parent company] Groupe Bernard Hayot level in Martinique with the HQSE [health, quality, safety & environmental] managers of the group’s companies.
“This provides a benchmark of good ideas [and] visits of other companies in order to expand our vision and the common establishment of the GBH group’s ESG strategy,” Pougeoise adds. “All these actions under development and the monitoring carried out allow us to remain holistic.”
Improving distillation process key to modern sustainability strategies
Such an approach is a must for any serious player in today’s spirits industry – but the process of distillation remains a vital part of any modern sustainability strategy.
According to the VP of operations at Pernod Ricard-owned The Absolut Group, Anna Schreil, the Swedish vodka has spent more than three decades working on its energy efficiency. Between 1996 and 2000, Absolut’s old distillery halved its energy consumption, and then almost halved it again between 2004 and 2008, thanks to the construction of a new production facility just outside Åhus.
“The Absolut distillery uses compressors to turn low-grade energy into high-grade energy, which can then be reused in the distillation process,” Schreil explains. “Today, our distillery is considered one of the world’s most energy efficient.”
Technology is playing a key role in improving the sustainability record of the wider spirits industry, with MVR [mechanical vapour recompression] and TVR [thermal vapour compression], two popular options for the distillation process itself. Importantly, these can be introduced at established distilleries, as well as being installed in new builds.
Amber Beverage Group has introduced a number of energy-efficient and water-saving processes across its sites, according to the company’s board member responsible for legal & sustainability, Artur Evart. “We have already installed solar panels at our production plant in Tequila, Mexico,” Evart explains. “These activities and technologies made it possible to make the alcohol production plant one of the most economical in terms of specific consumption of energy and water resources.”
As older distilleries transform their processes, new plants increasingly have sustainability at their core. Proximo Spirits-owned Irish whiskey Bushmills’ new Causeway Distillery, which opened earlier this year, uses the latest thermal technology – reducing energy usage by 30% – while other innovations have boosted fermentation and distillation efficiency by up to 10%. “Furthermore,” says Bushmills master distiller Colum Egan, “all of our electricity is certified as 100% green, using wind and solar energy sources.”
Proximo worked with global engineering company GEA to improve the sustainability and efficiency of Causeway’s production processes. “With their expert consultancy, we selected the most appropriate machinery to enhance the sustainability and efficiency of our production processes,” says Egan.
One potential complication of building a new distillery for an established brand – and introducing sustainable practices into it – is the need to maintain the brand’s signature flavour profile. “It was also vital to ensure that, in developing our technology, we were not losing out on the legacy of our production processes and the quality of whiskies that we produce,” says Egan.
“State-of-the-art distilling innovations maintain the ability to control every stage of production meticulously. And the copper pot stills at the new distillery are built with similar dimensions to those at Old Bushmills Distillery to ensure consistency.”
Across the Atlantic, Heaven Hill Brands’ new Springs Distillery in Bardstown, Kentucky, plays a key role in helping the company progress towards its ‘Environmental Sustainability Strategy’ goals by 2030. These include a 15% improvement in water use efficiency; a 30% reduction in carbon emissions; the provision of zero-waste visitor experiences; a 50% reduction in the use of virgin plastic in Heaven Hill bottles; and the support of sustainable white oak supply through the funding of logger education.
According to Heaven Hills’ director of environment & sustainability, Rachel Nally, the new plant has been engineered to minimise water use below industry benchmarks, while reusing certain water streams. “The site will use native plants and natural systems to manage stormwater run-off and improve habitat on the property,” she adds.
“The distillery will include a wastewater pre-treatment system to ensure discharged water exceeds environmental standards and greatly reduces the load on the city’s treatment plant. Heaven Hill also plans to utilise energy creation and recovery, lessening the distillery’s demand on the city’s electrical grid.”
Tackling the packaging problem
Boosting the sustainability of production facilities is an obvious goal for distillers – first improving efficiency, then switching to alternative fuel sources – but the packaging that holds the spirits they create is a more complicated matter.
“Balancing the demands of eco-friendly packaging with the expectations of premium-plus consumers who seek aesthetically pleasing and luxury-oriented products can be a delicate task,” says Amber’s Evart. “The challenge lies in finding innovative ways to meet both objectives simultaneously.”
Amber has explored using alternative packaging materials to achieve this aim, while optimising design and reducing the presence of unnecessary components. “This includes using recycled cartons for our boxes, minimising labels by using apps to provide product information and light-weighting bottles, including bottles in reusable schemes,” says Evart.
The challenge is all the greater with luxury products, such as high-end rum Havana Club Máximo Extra Añejo. As revealed exclusively by Global Drinks Intel earlier this year, brand owner Pernod Ricard revamped Máximo’s packaging, using a box constructed from certified wood by-products, with an 89% reduction in plastic components. The result, says Havana Club’s communications, public affairs & CSR director, Marie Benech, offers “a more sustainable option to rum collectors”.
Bottle weight and secondary packaging are obvious quicker wins in terms of sustainability, but closures are also becoming increasingly important. Crealis group marketing director Isabelle Gruard observes: “Whereas the focus is more on the glass bottle that takes approximately 85% of the carbon footprint of the packaging of wine and spirits, we’re happy to also see an increased demand for more sustainable closures and capsules.”
Crealis’s R&D team has created a new line called Green Tech, encompassing products that are bio-based, circular or compostable but, according to Gruard, don’t compromise on design aesthetics. These include Supercap, a spirits closure from the group’s BarTop division, and T-Bar Lux closure Maestro, with a shank made of bio-based materials.
Gruard adds: “The recent merger of Woodcap Indústria de Cápsulas de Madeira, Manuel Firinho & Filhos and Jesus Couto & Pereira in Portugal within Crealis Group has given us the crucial opportunity to widen our product portfolio with natural cork solutions.”
Meanwhile, late last year, Absolut announced a co-investment with glass supplier Ardagh Group in a hydrogen-fired glass furnace – a glimpse into the future as hydrogen is widely considered as a key weapon in the long-term effort to reduce carbon emissions.
Whatever the potential solutions, it’s clear that spirits packaging is on the verge of radical transformation. “Globally, the use of packaging has evolved into a ‘take-make-dispose’ model,” says Diageo South-East Asia marketing director Lyndon Govender. “Convenience comes at the cost of our natural resources. Packaging has become synonymous with waste. We want to change this.”
Diageo’s agent of that change is ‘Society 2030: Spirit of Progress’, a ten-year action plan aimed at delivering a 10% reduction in packaging weight, plus an increase in the proportion of recycled content in packaging to 60%, by 2030 globally. This, says Govender, is “a step in the right direction”.
US and Asia lag behind: support varies from country to country
But how is the consumer responding? The challenge lies in the distinct attitudes towards sustainability seen in different parts of the world. “We’re seeing a more positive response in our home market and in continental Europe,” says the marketing manager at Ireland’s Clonakilty Distillery, Karina Collins.
“US consumers are a few years behind Europe, but they’re catching up. We have trade customers in the US, for example, who are very particular about our sustainability story, and will only deal with brands that are genuinely committed in that regard.”
The sustainability message may struggle to cut through in the luxury-focused markets of Asia, but attitudes are evolving here too, says Evart, who adds: “As sustainability gains wider recognition and acceptance, the integration of luxury and sustainability is becoming increasingly understood and accepted.”
Diageo’s Govender agrees: “The luxury sector is primed for a shift towards sustainability,” he says. “There’s a growing appreciation for sustainable materials, and sustainability being embedded as part of what consumers expect from premium or luxury products.”
Last year, Diageo announced a programme to phase out the use of 183m cardboard gift boxes from its premium Scotch portfolio globally; in Singapore and Thailand, the company has launched the ‘Step out of the Box’ campaign, aimed at reducing cardboard packaging for brands such as Johnnie Walker.
Some of the most eye-catching initiatives span the environmental and social programmes, such as Havana Club’s repurposing of vinasse – a by-product of distilling sugarcane – into animal feed for 2,000 local farmers, alongside its fleet of electric vehicles for employees. A long-term solar panel project aims eventually not only to save 1,800 tons of CO2 per year, but also to distribute excess energy free of charge to the local population.
More such action is needed, and soon. Tomorrow’s spirits consumers are more conscious than ever of the damage humans have done to the planet. As Heaven Hill’s Nally says: “Due to the age of Gen Z consumers, many of them are income-limited or aren’t even of legal drinking age, so the power of their desire to make sustainable purchases has been slower to feel in the spirits industry.”
That may well be true – but it won’t remain true for long.
This article has been available to Global Drinks Intel subscribers since June. For details on how to join them, please click here.
