AB InBev sets out new goals for environmental shift
Brewer aims to have all of its electricity coming from renewable sources by 2025
AB InBev, the world’s biggest brewer, has set out a series of sustainability goals that will see all of its beer sold in returnable or recycled packaging and all of its electricity coming from renewable sources by 2025.
The new goals build on targets the group behind Budweiser and Stella Artois has published since 2009, but extend for the first time to external partners, including entrepreneurs whose ideas AB InBev hopes to tap through a start-up accelerator.
The initiative marks the latest attempt by a global brand owner to stay ahead of consumers’ demands for big businesses to make a positive contribution to society, at a time when brands such as Budweiser have lost market share to smaller rivals branding themselves as natural or artisanal alternatives to bland consumer staples.
Companies from Coca-Cola to McDonald’s have set out similar goals to reduce the environmental impact of their packaging in recent months, and groups including General Motors and Walmart created an alliance in 2016 to put their weight behind renewable energy investments.
“Sustainability is not necessarily something we have to do that will have a cost that doesn’t help the business. Sustainability is our business. If there’s no water, there’s no beer; it’s that simple,” said Carlos Brito, chief executive. “Our consumers and our people also want to know where we stand on those [issues].”
He declined to put a figure on how much AB InBev would spend to hit the new targets, saying: “There are costs everywhere but because they make business sense, you can say it’s a cost [and] I can say it’s an investment; I can say it’s part of the business anyway.”
But Mr Brito said its goal of having 100 per cent of its electricity contracted from renewable sources by 2025 — up from 17 per cent now — would require an investment of “around $2bn” by its suppliers.
Last September AB InBev signed an agreement with Enel Green Power to buy enough renewable energy from its Thunder Ranch wind farm in Oklahoma to meet up to half of its annual US electricity purchases. From next month, Budweiser bottles in the US will feature a battery-like symbol when the beer has been brewed using renewable electricity.
Its targets for reducing carbon emissions will be audited by the Science Based Targets initiative, a partnership including the UN Global Compact and World Wildlife Fund, said Greg Belt, who leads AB InBev’s sustainability work.
Entrepreneurs working with the accelerator were more interested in how AB InBev could help them reach consumers than in cash investments, Mr Brito said. “People have ideas but they don’t know sometimes how to get those ideas to fruition. We have brands, we have scale. What we learnt many years ago is that they need companies like us to test those ideas.”
The accelerator is run by ZX Ventures, an incubator and venture capital unit of AB InBev which it has used to bring craft beers, small premium brands, home-brew supply companies and a beer rating site into its portfolio.
Mr Brito said AB InBev was working with retailers such as Walmart in Brazil to increase the proportion of returnable containers it uses. “Everything’s driven by the consumer,” he said: “The consumer said, ‘if the big guys don’t do it, I’m going to go to the small guys who have returnables’. Then the big guys decided to be competitive, so they opened up their doors.”