The ROI of Going Green: Why Beverage Companies Are Betting Big on Sustainability

Some drinks companies consider sustainable practices a necessary long-term investment, while others may view participation in the sustainability movement as a costly obligation. Either way, soft drink syrup makers, ice manufacturers, breweries, coffee chains, fruit juice bottlers, milk brands, bottled water companies and other industry players are greener than ever.

Learn how the beverage sector is becoming increasingly environmentally conscious and the motivations behind this refreshing trend.

Sustainable Practices in the Beverage Industry

Drinks companies have taken various paths to sustainability. These are some of the most commonly adopted practices and the case studies that highlight them.

1. Sourcing Ingredients Ethically

The Coffee and Farmer Equity (C.A.F.E.) Practices program guides Starbucks’ decisions regarding coffee bean sourcing. It requires suppliers to observe payment transparency throughout the supply chain, ensuring coffee growers get paid adequately.

Starbucks helps prevent natural forests from being converted for agricultural production and expects growers to refrain from using pesticides. Starbucks farmers also maintain ground cover and shade trees to promote climate resilience.

The global coffee chain advocates against inhumane labor practices. Its C.A.F.E. Practices program sets criteria around wages and benefits, work hours, use of protective equipment, and more. Starbucks also has zero tolerance for child labor.

2. Managing Water Usage Efficiently

AB InBev — the maker of Budweiser, Corona Extra and Stella Artois — is particular about water consumption because its products heavily rely on the availability of this scarce resource. That’s why the company prefers to build its wells. It sets up facilities in locations with sufficient groundwater reserves to avoid harming high-risk communities.

AB InBev embraces innovation. It uses cutting-edge technology to minimize evaporation during the wort boiling process, enabling it to curb water consumption further.

The company’s subsidiary in Mbarara, Uganda, is Exhibit A. The brewery’s water consumption has dropped by 40% since 2013 thanks to advanced water treatment and water recycling methods.

3. Decarbonizing Logistics and Distribution

The Coca-Cola Company, Pernod Ricard, Diageo, Heineken and other global beverage companies have teamed up to form the REfresh Alliance and collectively curb their Scope 3 emissions. These emissions impact climate change and account for about 90% of a beverage company’s greenhouse gas emissions.

The consortium has partnered with Enel X for expert advice and guidance. This third-party entity connects alliance members with renewable energy providers to accelerate their decarbonization efforts.

REfresh has prioritized North America and Europe to capitalize on the regions’ established renewable energy infrastructure. The group has engaged with hundreds of suppliers, discussing everyone’s role in decarbonizing the supply chain.

4. Incorporating Eco-Friendly Packaging

Carlsberg is a paragon of sustainable packaging ingenuity. It pursues zero-waste packaging by gluing multipacks, appealing to discerning consumers who buy products without plastic packaging to lower their carbon footprints. This method creates less waste, lowers carbon dioxide emissions and reduces reliance on fossil-based packaging materials.

In Poland, Carlsberg has rolled out its rounded multipack boxes made from fully recyclable material. They are less prone to damage and help reduce the need for shrink film on pallets. Compared to boxes with angular corners, rounded ones have less empty space inside them and are lighter. This circular design makes packaging for Carlsberg, Garage and Somersby bottled beer products less energy-intensive to manufacture and transport.

In Latvia, the brewing group’s local Aldaris and Carlsberg brand teams have helped initiate a national deposit return scheme, which rewards consumers for returning beer bottles and cans for recycling and reuse. The multinational company gleaned insights from similar initiatives in Estonia and Lithuania to streamline the process, which earned the Latvian government’s approval.

5. Offering Wellness-Focused Products

The Central Bottling Company has joined forces with plant-based product manufacturer Brevel to develop a functional beverage based on microalgae.

Microalgae offers a neutral-tasting drink packed with essential fatty acids, protein and antioxidants. The bottler takes advantage of Brevel’s novel production process, which emits lower CO2 emissions, uses less land and water, and produces sustainable ingredients rapidly.

Collaborations like this one between Brevel and The Central Bottling Company can flood the market with more functional beverages, encouraging people to take control of their health and increasing consumers’ intake of vital nutrients.

Why Beverage Companies Are Going Green

Transitioning to greener business practices requires considerable capital without a guarantee of breaking even or generating higher returns. Business executives are generally uncomfortable with this risk, as only 21% agree that sustainability has a clear business case. Most believe the cost of financially burdensome environmentally conscious initiatives outweighs the benefits.

Despite the prevalence of such sentiments in corporate circles, many beverage companies are betting big on sustainability over the long term. Their expected benefits include:

• Reducing their environmental footprint: Drinks companies that fail to implement green practices can negatively impact the environment by emitting greenhouse gases, draining precious water resources, generating nonbiodegradable waste and disrupting natural habitats.
• Complying with intensifying regulations: The regulatory landscape surrounding sustainability is ever-evolving, pressuring industry players to adopt greener practices sooner rather than later to avoid fines and unflattering headlines.
• Generating higher revenue: Over 60% of consumers will pay extra to support products packaged with sustainable material, incentivizing beverage companies to target a growing number of people keen on making purchases that align with their values.
• Serving niche markets: Experts forecast the global functional beverage market size to increase at a compound annual growth rate of 6.5% from $168.32 billion in 2025 to $296.67 billion in 2034 — a lucrative niche beverage companies want a significant slice of.

• Reinforcing brand loyalty: Many consumers care about sustainable initiatives and worry about the planet’s habitability and the adverse effects of climate change. Beverage brands can invest in eco-friendly practices to effectively convert casual buyers into loyal supporters.

• Earning and retaining consumer trust: Socially conscious consumers support brands they can trust to be environmental stewards, underscoring the need to meaningfully adopt sustainable practices to generate repeat business.

Tap in to Sustainability’s Full Profit Potential Before Last Call

Many industries have received press for how their routine operations impact environmental degradation and climate change. Aware of the demand for more sustainable practices, beverage companies are shaping up by adopting eco-friendly operations.

While no business can go cold turkey after decades of ungreen business practices, the concrete sustainable efforts beverage brands are making deserve commendation and are worth emulating.