“Describe how the organization is likely to be affected…
MillerCoors considers itself to be a “brand curator.” While other beer companies are constantly reinventing themselves and their portfolios, MillerCoors looks at its portfolio of time-honored brands such as Blue Moon, Coors, Fosters, and Leinenkugel, and fights to keep them relevant. This preservationist attitude is apt because there is something else critical to MillerCoor’s product in need of preservation: the climate.
As a company, MillerCoors is vulnerable to risks posed by climate changed in three major ways. First is its reliance on agricultural materials for its end-product. The ingredients in all MillerCoors beer products are just hops, barley, grains, yeast, and water. A changing climate has altered the chemical composition, nutritional yield, and cultivation methods of the first three ingredients. Furthermore, those ingredients’ availability is limited by the scarcity of the last ingredient from rising temperatures and increasingly common droughts.
The second risk is from MillerCoors’s land-based distribution model to wholesalers and retailers. Petroleum-powered trucking alone contributes 6%[i] of total U.S. greenhouse gas emissions and a quarter of those from transportation sources.[ii] With increased taxes on fossil fuels and greenhouse emissions likely, the supply chain costs associated this distribution channel can greatly increase.
Lastly, as a consumer packaged goods company, many containers for the liquid products sold by MillerCoors end up in landfills. In addition to any regulatory enforcement of sustainable packaging, climate-change-conscious consumers increasingly view sustainable packaging as a differentiated selling point of the product.
“…the steps the organization is taking to address those effects…”
Unlike some companies facing comparable ecological challenges (notably in the almond milk product category[iii]), MillerCoors has demonstrated public recognition of the problem, a willingness to educate its consumers about the challenge, and an eagerness to find solutions. MillerCoors has already adopted a three-pronged approach to increase its climate sustainability addressing each of the issues above in turn.
The first prong is for Miller Coors to reduce water consumption in breweries and agricultural supply chain[iv]. In 2011, MillerCoors recorded a water to beer production ratio of 4.07 to 1 and set an ambitious goal of reducing that ratio to 3 to 1 by 2020.[v] By capturing and reusing waste water and sustainably releasing it in streams, MillerCoors has reduced its water consumption by 128.8 million gallons in 2015 alone. MillerCoors has taken this commitment even further by working to “restore a volume of water equal to the final product volume produced at our breweries and cidery located in water-stressed watersheds” across the United States by 2020.[vi]
Reducing Miller Coors’s carbon footprint across the value chain is the second prong. Miller is working to reduce the energy consumption of its breweries through unspecified ways, and switching its energy sources by installing solar panels on brewery roofs and changing out coal-fired broilers for natural gas ones.
Miller’s last prong is to eliminate waste at all major manufacturing facilities by 2020. The company repurposed refuse from the beer-creation process, converted waste beer into fuel-grade ethanol, instituted stringent company-wide recycling programs, and cut waste-to-landfill in 2014 by 50%.[vii] Miller Coors has also made a lot of waste-reducing changes in its packaging, from “light-weighing” cans and bottles, to shifting from heavier bottles to lighter-weight cans. Miller Coors has sought to capitalize on the badge value of these initiatives by manufacturing new prominent tap handles in bars out of recycled aluminum.
“…and describe and justify what additional steps you think the organization should consider implementing.”
MillerCoors can still improve its sustainability in ways that will promote the long-term vitality of the company. One way is in further reducing the energy consumption of its breweries. Easy wins include converting to 100% LED lighting, changing the trucking fleet over to low-emission vehicles, increasing insulation of refrigeration units, and only powering those units during off-peak hours. Furthermore, given the water consumption of the agricultural inputs, breweries should begin tracking the spoilage and waste of beer inputs and work to reduce those numbers.
The more complicated and impactful steps MillerCoors can take would be promoting sustainability down its supply chain to its growers. Low volume or “drip” irrigation can reduce the amount of water expended on crops, while a reconstruction of the farm soil can help keep water and nutrients from passing beyond the plants’ root zone. Furthermore, the rootfloor of the farms can be restructured to maximize efficiencies, reducing the number of passes machinery have to take as well as reducing the amount of dust that would be given up by dry soil in the process.
In short, MillerCoors is a leader in sustainability at the corporate level, but has the potential to greatly increase its impact up and down the supply chain.
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[i] Freight Railroads Help Reduce Greenhouse Gas Emissions Association of American Railroads April 2016 https://www.aar.org/BackgroundPapers/Railroads%20and%20Greenhouse%20Gas%20Emissions.pdf
[ii] Sources of Greenhouse Gas Emissions | Greenhouse Gas (GHG) Emissions | US EPA. 2016. Sources of Greenhouse Gas Emissions | Greenhouse Gas (GHG) Emissions | US EPA. [ONLINE] Available at: https://www.epa.gov/ghgemissions/sources-greenhouse-gas-emissions. [Accessed 03 November 2016].
[iii] Sustainability. 2016. Sustainability. [ONLINE] Available at: http://bluediamondgrowers.com/sustainability/. [Accessed 03 November 2016].
[iv] MillerCoors. 2016. Sustainability | MillerCoors. [ONLINE] Available at: http://www.millercoors.com/sustainability. [Accessed 03 November 2016].
[v] MillerCoors. 2016. Environmental Stewardship | Sustainability | MillerCoors. [ONLINE] Available at: http://www.millercoors.com/sustainability/environmental-stewardship. [Accessed 04 November 2016].
[vi] MillerCoors. 2016. Water Stewardship | Environmental Stewardship | Sustainability | MillerCoors. [ONLINE] Available at: http://www.millercoors.com/sustainability/environmental-stewardship/water-stewardship. [Accessed 04 November 2016].
[vii] MillerCoors. 2016. Packaging and Recycling | Environmental Stewardship | Sustainability | MillerCoors. [ONLINE] Available at: http://www.millercoors.com/sustainability/environmental-stewardship/packaging-and-recycling. [Accessed 04 November 2016].