GLOBAL CHALLENGES

Smarter Beer: Major Brewers Tackle Water Issues

Salvatore Salamone | Date: 08-09-10 | Comments

In an effort to thwart predicted water shortages, beverage companies like Anheuser-Busch are seeking methods of reducing their water footprint.

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Smarter Beer: Major Brewers Tackle Water Issues
The old bar joke "save water, drink a beer" may soon be truer than anyone ever imagined. Realizing the vast quantities of water needed to produce their products, SABMiller plc and Anheuser-Busch InBev, two of the world's largest beer producers, are looking for smarter ways to use water.

The production of beer�and most things we ingest including coffee, meat, grains and soft drinks�takes a great deal of water, a substance that is increasingly in short supply and more expensive all around the world. This is driving many food and beverage manufacturers to more closely examine their water usage.

The reason: While much attention is being paid to the development of renewable energy sources and the reduction of carbon dioxide, in reality, water shortage is going to be a more serious problem in a much shorter timeframe.

"Five years from now, we will have more options for energy, but we will have fewer options for water," says John Cronin, director and CEO of Beacon Institute for Rivers and Estuaries and senior fellow for Environmental Affairs, Pace Academy for Applied Environmental Studies at Pace University.

Cronin's comments came at last week's IBM Blogger Day event, held at IBM headquarters in Armonk, N.Y. Cronin noted that the looming impact of water availability and cost is already getting the attention of large companies.

"Companies are realizing that their economic limiting factor is not energy, not the availability of cheap labor, but water," Cronin asserts.

Others agree with Cronin. "Global water scarcity is one emerging risk that all companies should be focused on, and one about which investors need information," states Brooke Barton, senior manager of the Corporate Accountability Program at Ceres, in a 2010 report on corporate reporting on water risk. (Ceres is a national network of investors, environmental organizations and other public interest groups that works with companies and investors to address sustainability challenges.)

The Ceres report noted that "the combination of rising global populations, rapid economic growth in developing countries, and climate change is triggering enormous water availability challenges around the world."

An example of the economic impact of water shortages is California farmers, who are being forced to abandon or leave unplanted more than 100,000 acres of agricultural land, resulting in more than $1 billion in lost revenue. Utilities are seeing licenses for new plants denied and energy production in existing plants being curtailed due to water issues.

As a result, companies and particularly corporate boards and investors are seeking ways to assess the potential economic impact of water's cost and availability on their businesses. In fact, similar to determining a company's carbon footprint, some organizations are now trying to gauge their corporate water footprint.

The footprint essentially is a measure of the total volume of fresh water used to run a business. Normally, calculations of a water footprint take into account the direct amount of water used by a company for its operations and a supply-chain water footprint.

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