Corona, Budweiser, Stella Artois, La Virgen, Franziskaner...all these beer brands are owned by AB InBev, the biggest brewing group in the world and one of the most committed to sustainability principles. For them, water plays an essential role, as the major component of the 'liquid gold', and water use efficiency is a challenge that AB InBev has set as a top priority in its corporate strategy. In fact, the company has the lowest water consumption to produce beer in the brewing industry.
Alexandre Pouille, Director for Spain, and Anxo Martínez, Director of Legal Affairs and Corporate Social Responsibility for Spain, are in charge of guiding AB InBev towards a scenario of environmental commitment and the best management of such a limited resource as water. We talked with them over a few beers about this and many other issues, at their offices in Madrid's Gran Vía.
Question: Could you tell us some highlights of your career path up to your current position?
AP: I graduated in Finance in 2011 from William & Mary University in Williamsburg (Virginia, United States), and I have a master degree from the Raymond A. Mason School of Business, of that same university. I joined the brewing group in 2011, working in different positions of responsibility. The last one, prior to becoming Director General for Spain, was Budgeting and Business Performance Director for Southern Europe, including the French, Italian and Spanish markets.
AM: I studied Law at the University of Oviedo (Asturias, Spain) and then did a Master in European Business (MEB) at the KU Leuven University in Belgium. I started to work in the brewing industry in 2005, at the Modelo Group, the Mexican company that produces, among others, the well-known brand Corona Extra, and where I was in charge of Legal Affairs for the EMEA region. In 2013, as part of the integration into AB InBev, I was appointed Director of Legal Affairs and Corporate Social Responsibility for Spain.
Q: For those who do not know AB InBev, which beer brands do you brew and distribute?
AP: AB InBev is the world's top brewing company, with more than 500 brands, such as Budweiser, Stella Artois, Corona Extra, Leffe, Quilmes, etc., produced in more than 200 brewing plants. We have operations in more than 50 countries.
In Spain, the group has 3 different operating entities: La Virgen, an artisan brewery located in Las Rozas (Madrid); our imported brands company, located in Madrid; and the biggest one, the Compañía Cervecera de Canarias in the Canary Islands, which makes the Canary Islands well-known beer brands Tropical and Dorada.
AM: We are a big company, and as a sector leader and global business, we believe we have a huge responsibility in terms of sustainability; as we like to say, sustainability is not part of our business, it is our business.
In this regard, we are very proud to have been recognised this year with The Circulars award — an initiative of the World Economic Forum and the Forum of Young Global Leaders, run in collaboration with Accenture Strategy —, the world’s premier circular economy award program, as one of the 12 top companies leading the way towards a circular economy, specially taking into account that 450 applications from 45 countries were received to compete for the prestigious award.
Q: To give an idea of the company's size, what is the company's turnover, and how many people does it employ?
AP: Our turnover in 2018 was $54,619 million, and we are more than 175,000 unique people all over the world. In Spain, considering the three entities, we are about 500 employees in total.
Q: Now let us talk about water: how much water does AB InBev use to produce beer and where does it come from?
AM: According to our 2018 Annual Report, the amount of water used by the company was 1,632 billion hectolitres.
This resource comes mainly from our own wells, natural wells and in some cases, even rivers, as well as the public water supply. In this regard, we always try to be autonomous and prefer to have our own wells. When we are not happy with the results of groundwater extractions, we prefer to look for a different location to build our brewery, in order to avoid any risks in that geographical region.
Our water consumption to produce one hectolitre of beer is the lowest in the brewing industry: 2.95 hectolitres. We must take into account that water consumption has gradually decreased in the past few years; it was 3.07 hectolitres in 2017 and 4.04 hectolitres in 2010. This shows our serious commitment to a sustainable and rational use of water, part of our 2025 Sustainability Objectives, and our effort to reduce water consumption, even though our beer production has increased significantly.
Q: What measures are implemented to reduce water consumption in a brewing operation?
AP: Water makes up about 95% of beer. Therefore, water is the most important ingredient and resource for us. And concerning water management, we believe that it is not just about the latest technology and/or launching big projects, but about managing this resource according to the same rules used for other business assets and resources.
Our company's culture is always based on ongoing analysis and measurements, and fits this purpose perfectly, because we apply the same philosophy to water management. We believe it also involves training our employees, establish the appropriate KPI for our operations and appropriate incentives to improve our performance concerning water management at all levels. Raising our employees' awareness is important too, asking them to report any leaks in hoses, taps, etc., and to participate in sustainability projects. All of this will achieve marginal improvements, that will improve our operations step by step.
Related to this, analysing our beer brewing processes and seeing how we can improve them in terms of water consumption is key, without forgetting any relevant investments to secure the technology that can help us with this objective. For example, we are developing technology to reduce the extent of water evaporation during the wort boiling process. In fact, during this process, due to water bubbles, the loss can reach up to 6-8% of the total product. Thanks to a new technology (Simmer & Strip technology) we have developed in collaboration with the European Commission, as part of the LIFE Programme, we can decrease that percentage to 1%, by injecting CO2 obtained during the same process. The company has already patented this technology and our plan is to provide it for free to small independent breweries. Large breweries would use it in exchange for monetary compensation, and we would commit to reinvest the funds received in sustainability projects.
Q: In this regard, do you have any relevant projects ongoing in Spain?
AM: Our brewery in Madrid (La Virgen) and the two in the Canary Islands follow the same water management criteria than the other global breweries of the company.
In addition, we are in the verge of launching a pilot project in the Canary Islands with a small startup that is part of our 100+ Sustainability Accelerator, known as Desolenator®. The project is based on a technology that combines thermal and electric energy from solar panels to produce pure water. Seawater can be desalinated and groundwater contaminated with toxins can be purified, even in remote areas.
Q: The 100+ Sustainability accelerator is a really interesting initiative. What does it involve?
AP: In August 2018, we launched our 100+ Sustainability Accelerator, together with 10 commitments pertaining to different areas, including water management, sustainable agricultural production, product recycling, circular economy and packaging, climate change, etc. Our goal was to request applications and tools from startups that are addressing key sustainability challenges with innovative solutions. With the programme, we want to support motived and committed entrepreneurs and use our resources and experience to foster, help and grow this type of business.
Just to get an idea, during its first year, the 100+ Sustainability Accelerator received more than 650 applications from startups across the world. Together, the new companies raised $100 million in funds and $50 million in revenue. Out of all applicants, 21 were selected to participate in the first test and receive mentoring, financing and access to new work online to make their ideas become a reality.
We look forward to launching the second round of the accelerator in 2019, ensuring the continuity of our efforts to find innovative technologies to achieve our ambitious 2025 Sustainability Objectives and contribute to the UN 2030 goals.
Q: Recently, AB InBev has announced its commitment to Sustainability Objectives. What is the approach with regard to water consumption and what targets are contemplated?
AM: As climate change increasingly intensifies water resources challenges, we continue to increase our efforts to manage water, adopting an outward looking approach and looking for knowledge from key experts and the main water conservation organisations. The combination of their guidance with our scale and our management systems allows us to ensure a reliable and clean water supply, both for our operations and for the local communities where we operate.
Our water related objective for 2015 is ensuring that water availability and quality improve significantly in 100% of our communities in high stress areas.
This ambition is directly related with the UN's Sustainable Development Goal number 6, and its purpose is to improve tangibly the health and livelihoods of the people that live in the river basins involved.
To do this, we continue to develop surprising initiatives, like 'Buy Lady a Drink', associated to our brand Stella Artois, started in 2015, in collaboration with the organisation Water.org, founded by Matt Damon and Gary White. Thanks to it, 1.7 million people gained access to drinking water by way of a $21 million donation to Water.org, through the sales of our special Stella Artois glass and products of this same brand, together with direct donations.
Our goal with this specific project is to double the amount in 2020, in order to provide access to drinking water to 3.5 million people.
Q: What are the water management challenges for a brewery like AB InBev?
AP: Fighting for a measurable improvement in water availability and quality in high risk communities is a challenging and vital commitment, based on a basic belief: water security is a priority challenge for global sustainable development. At AB InBev we are critical and passionate, results-oriented staff. Therefore, we plan to lead a corporate change towards measurement and responsibility in this regard, ensuring that our investments and local programmes translate into long-lasting impacts concerning water quality and availability in our communities and operations across the world.
For example, to set a baseline for measurement and monitoring techniques, we tested comparative assessment initiatives for the protection of river basins in Mendoza, in the state of Zacatecas, Mexico. Our intention is to apply the findings to the rest of locations with supply problems where we brew our beer before 2020, and share the results with the NGOs we work with and with the remaining stakeholders in local communities.
Q: To conclude the interview, and regarding the company's partnership with NGOs, which examples would you highlight?
AM: In 2018 we announced a global water agreement with The Nature Conservancy (TNC) and the World Wildlife Fund (WWF). Both organisations share our belief in a measurable impact at a certain scale as the next frontier for water management.
The first phase of our association with TNC focuses on Latin America and the United States, with the development of four Water Funds in Colombia, El Salvador, Argentina and Mexico, as well as river basin protection projects in California and the Colorado river.
These initiatives bring together all type of sector stakeholders, public, private, and civil society, to achieve a common goal: contribute to water security through solutions based in nature protection and sustainable river basin management.
On the other hand, our current partnership with WWF in Bolivia, South Africa and Zambia is based on earlier collaborations that used water risk assessments to point out the value of water for the local economy.
We are working together to develop public-private financing approaches, in order to foster private sector investment at the scale necessary to improve water access and quality, improve the health of river basins and ensure the needs of local communities are met.