Climate Change and the Beverage Industry: Brewing a Storm

一    Tiffany McGrath
|    October 15, 2024

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Climate change is reshaping the beverage industry, affecting the cultivation, quality, and cost of drinks we love. From wine and coffee to beer and tea, producers are grappling with rising temperatures, unpredictable weather patterns, and water scarcity. This blog delves into the impact on each beverage category and explores how companies are adapting to protect their future.

Wine 

Global warming is altering wine-growing regions, driving grape sugar levels higher and acidity lower, affecting flavor. Notable wine-producing areas like France, Spain, and California are experiencing droughts, wildfires, and extreme weather events, forcing winemakers to adjust vinification processes. Essex in England, has now young vineyard owners making a name in international wine as the climate changes. Listen more on BBC Climate Question.

Coffee

Arabica coffee, the most popular type, is vulnerable to changes in temperature and rainfall. Higher temperatures and altered rainfall patterns can reduce bean yields and negatively impact bean quality, leading to changes in flavour profiles and potentially increased costs. Regions like Latin America and Africa are facing challenges, with significant implications for coffee quality and supply.

Tea

Tea’s sensitivity to temperature and rainfall patterns impacts its yield and quality. Major producers like India, China, and Sri Lanka are contending with erratic weather, leading to decreased production

Beer

Barley production, crucial for beer, is impacted by drought and heatwaves. Climate change is disrupting barley yields, leading to higher production costs and potential changes in beer flavor

Industry Approaches to Mitigation and Adaptation

The beverage sector isn’t sitting idly by. Leading companies are investing in climate-resilient crops, efficient water management, and sustainable farming practices like agroforestry and regenerative agriculture

Key Strategies include: 

  • Climate-Resilient Crops: Developing new varieties of coffee, grapes, and barley that are more drought and heat-tolerant.
  • Water Stewardship: Reducing water waste through methods like drip irrigation and water harvesting.
  • Supply Chain Diversification: Exploring new growing regions less susceptible to climate change effects to reduce reliance on single-source regions and lessen the impact of supply chain disruptions.

Impact and Potential Solutions

Climate change brings multifaceted challenges for the beverage industry—economic (rising costs and supply disruptions), social (livelihoods of communities in production regions), and environmental (greenhouse gas emissions from production).

Addressing these issues requires industry-wide collaboration, transparency, constant improvement and the development of climate-resilient supply chains are all paramount to ensuring a sustainable future for the beverage industry. 

Beverage Leaders Taking Action

Major brands like Absolut Vodka, Heineken, Diageo, and BrewDog are leading the charge in sustainability, from reducing water usage and emissions to incorporating renewable energy. These companies have set ambitious targets like carbon neutrality and waste reduction while investing in local communities.

Key Examples: 

  • Absolut Vodka: Absolut has publicly committed to carbon neutrality by 2030. Their initiatives include:
    • Sustainable Farming: Working with farmers to adopt sustainable agricultural practices in their sourcing of ingredients (wheat and sugar beet).
    • Renewable Energy: Shifting towards renewable energy sources in their production facilities.
    • Sustainable Packaging: Utilizing recycled glass in their bottles and exploring more sustainable packaging options.
    • Water Management: Implementing water conservation measures in their production process.
  • Heineken: Heineken has set ambitious sustainability goals, including:
    • Water Stewardship: Reducing water usage in their brewing processes and supporting water stewardship projects in water-stressed communities.
    • Carbon Footprint Reduction: Working to reduce their carbon emissions throughout their value chain, focusing on renewable energy and efficient operations.
    • Sustainable Sourcing: Promoting sustainable barley sourcing practices.
    • Waste Reduction: Implementing waste reduction and recycling programs across their breweries.
  • Diageo (brands include Guinness, Johnnie Walker, Smirnoff): Diageo has a comprehensive sustainability program focusing on:
    • Responsible Sourcing: Implementing responsible sourcing practices for key ingredients such as barley, water, and spirits.
    • Reducing Carbon Emissions: Setting targets to reduce greenhouse gas emissions throughout their value chain.
    • Water Stewardship: Prioritizing water conservation and responsible water management.
    • Community Engagement: Investing in local communities where they operate and promoting social responsibility.
  • Guinness (Diageo): While under the Diageo umbrella, Guinness’s sustainability efforts are often highlighted separately, including water conservation, responsible sourcing of barley, and community engagement initiatives in Ireland.
  • BrewDog: This craft brewery is known for its outspoken commitment to environmental sustainability, including:
    • Renewable Energy: Using renewable energy sources in their breweries.
    • Sustainable Packaging: Focusing on reducing packaging waste and using recycled and recyclable materials.
    • Environmental Advocacy: Actively advocating for environmental protection and engaging in public campaigns.
    • Carbon Offsetting: Investing in carbon offsetting projects to mitigate their environmental impact.

Choosing Sustainable Partnerships

When making beverage purchasing decisions, it’s crucial to look beyond marketing claims and ensure companies are truly committed to sustainability. Transparency, third-party certifications, and a holistic approach across the value chain are essential for assessing sustainability efforts.

A Call to Action

The future of the beverage industry depends on ongoing innovation and collaboration. Through climate-smart agriculture, sustainable supply chains, and corporate responsibility, the industry can mitigate climate risks and ensure a sustainable future for both businesses and the communities they serve.

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