AB InBev: Sustainably sourcing for the world of tomorrow
AB InBev is without a doubt the world’s largest brewer. With an incredibly diverse global footprint, spanning the Americas, Europe, Africa and Asia Pacific, AB InBev produces the biggest brands in beer. Budweiser, Corona, Stella Artois, these are but a few of the biggest, and arguably most influential, beer brands in the world.
But being the number one brewer is not the only measure of success for the company. The company was founded with a dream, a dream of bringing people together for a better world.
It delivers on this vision by investing into every step of the value chain. From the farmers and the retailers, right through to entrepreneurs and communities that the company serves, AB InBev well and truly goes above and beyond.
As a company that brews the best beers in the world, it needs to source the best ingredients in a safe and sustainable way and it does so through an unwavering commitment to sustainable best practice.
Overseeing the company’s sustainability and procurement drive throughout Europe is Richard White, Vice President of Procurement and Sustainability.
Having worked with AB InBev for nearly 17 years, White has seen first-hand the company’s exceptional growth as well as more recently, the amplification of its sustainability agenda.
“The bottom line is, we’re a beer company and a brewer. We brew our beers using four key, natural ingredients from the land, so there is an inherent link between sustainability and sourcing those ingredients,” he says.
“We’ve always had sustainability goals, but predominantly from an internal focus. Over the last six to 12 months we decided as a team to stretch those goals further and it comes down to one, clear vision. We want to continue operating as a company for the next 100 years and beyond.”
As part of this increased focus on sustainability, AB InBev created its “2025 Sustainability Goals.” As White noted, AB InBev has always focused heavily on sustainability, but as a company that has successfully delivered on its sustainability ambitions for more than a decade its new goals for 2025 has been dubbed the “most ambitious goals yet.”
The 2025 goals can be broken up into four key areas, Smart Agriculture, Water Stewardship, Circular Packaging and Climate Action. For White, the only way the company can even begin to achieve and actually deliver on these goals is by leveraging its brands and more importantly, leveraging its brand connection points with its consumers.
This is where procurement plays a key role.
“Historically, procurement has been seen as a cost-quality focused function,” he says. “But over the years, particularly here at AB InBev it’s definitely grown and become much more of an innovation and sustainability function.”
As the main touch point between the company and its supply base, across its entire global footprint, it becomes clear just how much of an integral role the procurement and supply chain function will have on delivering these goals.
With a supplier base exceeding 10,000 suppliers and farmers across Europe alone, AB InBev will have to work much closer and more collaboratively with these suppliers in order to truly achieve its goals.
White agrees as much, citing that with the most ambitious goals in the company’s history, it cannot complete them alone.
“We cannot even begin to try and deliver these goals on our own,” he says. “We need to work with our suppliers, our private and public partners if we want to achieve them. They are extremely stretching goals and collaboration is crucial.”
With an increasing responsibility on the touch points throughout the supply chain, AB InBev is mapping opportunities across its supplier network. This exercise represents a journey towards defining those key metrics it’ll use to allow its current suppliers, and potential future suppliers, to see that AB InBev walks the walk and invests in future growth.
AB InBev truly sees sustainability as not simply related to its business, but as its business. As was the case for the environmental goals to which AB InBev committed in the 2012-2017 period, all its sustainability initiatives both inside and outside its walls will be comprehensively measured, tracked and benchmarked for improvement.
White emphasises that the metrics behind each initiative are designed together with sustainable development experts and results are audited externally for validation. Sustainability is, in essence, the ultimate guiding principle while carefully described performance indicators drive meaningful evaluation.
“Inherently, as a brewer we need to make sure that what’s coming into the business is sourced sustainably,” he says.
“What goes in needs to be right and so too does what goes out to our consumer. We set a number of targets and our supply-relationship management programs have and will continue to speak very loudly to our commitment there.”
In any industry, the customer and the consumer are the real key driver and White believes that its not only the company that has turned its attentions towards visibility and transparency across the supply chain with regards to sustainability.
Consumers are changing and in this modern world where more and more data is accessible in the palm of the hand, White feels that the consumers have become much more in tune towards the sourcing of the ingredients or the raw materials in the products they buy.
To this end, AB InBev remains agile to this changing consumer mindset and White believes that this will prove king in the delivery of the sustainability goals.
“Our consumers connect with us through our brands and so we have a responsibility to utilise this touch point and continue to innovate and push our sustainability goals,” he says. “What we as a business will continue to do in order to achieve this is to activate and amplify them through our consumer touch points.”
No more is this apparent than in the “Buy a lady a drink” campaign, launched through the Stella Artois brand. The campaign? For every multipack of Stella sold, AB InBev and water.org will provide six months of clean water to people in developing countries, where often women need to walk up to 6 hours to get clean water for their family.
Another strong example of AB InBev innovating and amplifying its brand, albeit in the United States, is through a partnership with Enel Green Power, an Italian renewable energy corporation. The switch to renewables for AB InBev’s US breweries alone corresponds to taking
48,000 passenger cars off the road every year. Budweiser bottles will feature a 100% Renewable Electricity symbol. This is to highlight to the consumer that AB InBev now purchases 50% of its entire electricity for its US breweries from wind power, which amounts to more than the total electricity required to brew Budweiser in the US.
“It’s about showing to our consumers the fantastic work that we are doing behind our brands and our innovations towards delivering on our sustainability agenda,” says White.
“We need to do so in an authentic, credible way. The consumer will want to know and want to feel sure that this is an authentic approach to sustainability, and we're not just paying lip service to it, and I think we can prove that.”
With a global footprint, selling beer in more than 100 countries, AB InBev not only has a responsibility to define its own sustainability agenda but it also has a responsibility to set a standard of best practice that others can follow.
From the consumers that it interacts with, the people that work for the company, to raw materials that it sources to produce its beers, AB InBev recognises that it can and will play a huge role in creating a better world for today and tomorrow.
“We must work with our suppliers and partner with NGOs and government organisations,” he says. “The work that we are doing and what we have achieved should be shared with other companies in the industry because ultimately, it’s for the greater good.”
That partnership and collaborative effort is fundamental. As White notes, these sustainability goals are intentionally challenging, pushing AB InBev and the wider industry to double up on its efforts in order to create a better world.
Sustainability in isolation is not the key message here.
“The creating a better world part of our motto is increasingly important to us and to our consumer,” adds White. “To be a part of a company that not only values sustainability but sees procurement as the spearhead to driving sustainability and innovation, I’m incredibly proud.”
“Ultimately, the sustainability goals are but one step in a 100-plus year plan that will enable us to continue to excite our customers with amazing brands and do so in a sustainable way.”