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Beer Industry Essay

1550 words - 7 pages

Team Synthesis
Business Case for Sustainability

Recommendation: Packaging

The process of brewing beer is essentially the same for the industry as a whole. There are two stages in the brewing process; (1) the extraction of sugars from cereal grains and (2) the fermentation of these sugars to make alcohol. However, the packaging for large breweries, consists upwards of 50% of the weight during shipping from the brewer to the distributor and then to retailers (Dornbusch, 2010). Studies have shown that the aluminum can beats out the glass bottle when it comes to life cycle analysis of the materials including the recycling and reuse of each material. Aluminum cans, when recycled, use ...view middle of the document...

Overall, the cost analysis of aluminum versus glass packaging shows aluminum results in lower costs and less environmental impacts (Aluminum.org, 2011) Just in recycling miles for transporting glass versus aluminum, the glass bottle can travel 9,000 miles compared to aluminum which can travel 450,000 miles before breaking even in fuel and emissions total cost, thus the cost of transporting bottles is 98% less in terms of fuel and emissions alone ( Ecotrope, 2011). Factoring in less breakage and spoilage (Bernstein, 2011), the can just makes better sense economically and environmentally. Furthermore, the barriers that make canning versus bottling in the craft brew industry are non-existent as large scale brewers already have the equipment and means necessary to move to all aluminum packaging. In fact in a strategic plan document prepared for Anheuser Busch (Carlisle, 2009), states that the aluminum bottle reduces cost due to already existing technology being more energy efficient for aluminum packaging and also in terms of public perception and awareness of “green” packaging.

Being one of the larger impacts of the beer industry, single use containers (bottles and aluminum cans) are both energy and resource intensive. The transporting of product in single use containers is much more damaging in terms of emissions and energy use than are kegs. However, it is not feasible to propose that all large scale brewers eliminate single use packaging since it would allow for competition to carve out their large profit margin by offering single use containers. We propose that, instead, large brewers adopt the aluminum bottle as an alternative to glass bottles. Aluminum bottles are lighter, seal tighter and are less of an impact on the environment when recycled. The quality of the product is increased, spoilage and breakage are decreased and cost is reduced in both production and distribution of their product. This is a win-win for the industry and has been presented as a viable business model according to the recent strategic plan for Anheuser-Busch.

Recommendation: Distribution
The three-tier system that binds the beer industry in terms of providing direct to consumer sales, does not support satellite breweries, where the brewery or producer limits the distance between them and the distributor or consumer. Large breweries already have positioned themselves close to their respective distributors and thus the final destination of retailer shelves is a constant variable, not controlled by the large brewers. However, by utilizing the distributors and the large power they hold over distributors compared to that of smaller craft breweries, large scale brewers can use the innovative ideas the small craft brewer have implemented to combat this power relationship between the large scale brewers and the distributors.

One of these ideas is related to the use of “growlers”. The original growler, a galvanized pail, is a refillable container...

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