Beer-making without impact, the Heineken wayJuly 2016
by Tom Idle — For the past six years, Heineken’s approach to environmental and social issues has been informed by its structured Brewing a Better world strategy. And it is beginning to bear fruit.
In Austria, the Gösser brewery – one of more than 160 sites across the Heineken Group – proudly boasts a zero carbon status. Diligent work by the company’s local brewmaster means that a combination of renewable and reusable energy sources, including solar, hydropower, biogas and waste heat, has cut the brewery’s carbon footprint by 3,000 tonnes of CO2 a year to absolutely zero.
A 15-year veteran of the business – Europe’s largest brewery group with more than 250 brands around the world – global sustainable development director Michael Dickstein is excited about what comes next as the company continues to expand while finding innovative ways to become a responsible business fit for the 21st century. I talked with Dickstein about Heineken's strategy.
What’s been achieved at the Gösser site looks impressive. How does this fit into your wider energy strategy?
Well, one pillar of our Brewing a Better World strategy focuses on reducing CO2 emissions by 40% by 2020. Gösser is playing a leading role in that by now operating without any need for fossil fuels.
Like many businesses, it has been about reducing our energy use and if there is an opportunity to go for renewables, then do it. The Gösser brewery is located near to a sawmill that is creating waste thermal energy in the form of steam. Our visionary brewmaster built a pipeline from the sawmill to the brewery to make use of that steam and cover all of the thermal energy needs.
When it comes to renewable energy, you need to be creative, grasp the business opportunity and work with partners.
You have more than 160 breweries, which are all very different in shape and size. How important are the people in the business in finding solutions?
Our people are incredibly important, particularly at the beginning of a change programme. We have now reached a tipping point where looking at innovative new ways of doing things is more structured.
In our Dutch brewery, our biggest in Europe, we are working with a consortium of local businesses to build a pipeline that will take residual heat from Rotterdam Harbour to the brewery. It’s a huge, 43 kilometre project, and if successful will create a zero carbon brewery there too.
Similar projects are under way in Vietnam where five breweries have biomass installations designed to cover 50% of their energy needs. And our colleagues in Mexico are striving to source two-thirds of their energy from renewables by 2020.
Many companies are grappling with working out what their purpose is in the world. Have you been through that process?
Yes, and we are crystal clear about that. What’s most exciting is that we are becoming clearer on the purpose of our brands and how those brands are focusing on specific topics. In Africa, for example, we are focused on local sourcing so that 100% of the materials going into the beer-making process there are being sourced from local farms. And that idea has spilled over into Europe with similar things happening in Croatia and Hungary.
The use of solar energy is something gaining traction with various brands and we are starting to use the Brewed by the Sun slogan on brands such as Bierra Moretti in Italy and Tiger in Singapore.
But do your customers really care about how their beer is made?
Well, you need to be careful because what consumers say they are interested in when it comes to sustainability is not necessarily consistent with their purchasing decisions in supermarkets, for instance.
But in some segments of the beer drinking market, around 5 to 10% of people are making their purchase decision in a conscious way and sustainability is becoming a real differentiator.
How do you get the balance right between promoting responsible consumption of alcohol and the commercial interests of the business?
My message is: don’t be afraid. If I think back to the conversations we had internally 5 to 10 years ago about responsible consumption messaging, it took a while for people to understand the need to bring authenticity into brand messages.
Our Moderate Drinkers Wanted campaign increased our brand equity among consumers and made it a lot easier to push the agenda internally. No longer is the sustainability team driving the agenda; our marketers fully believe in it and are grasping the opportunity.
And is it something being driven by customers demanding you take a stand on irresponsible drinking?
It’s the responsibility of big brands to go ahead of the consumer – but only so far that you don’t lose sight of them.
If you can keep that balance of setting the agenda and answering the needs of consumers – sometimes about things they are not yet aware of – you are in the sweet spot.
So, what advice do you have for other businesses starting out on a similar journey?
Take one step at a time. Whether it is renewables or the responsible drinking agenda, we had some difficulties establishing an internal agenda five years ago. So, don’t be frustrated at what you cannot achieve today because tomorrow there will be good opportunities to make progress.
Also, be authentic. I am not a messiah for changing the world. I am a businessman. And I believe what is relevant is making sure that we support the businesses, whether directly or indirectly, using the sustainability agenda. That might be a strange message coming from somebody in my position, but my interactions with NGOs and partners over the years suggests it is an authentic and strong message that makes it clear as to what we stand for and why we do the things we do.