Paul Suff hears how Bacardi is aiming to enhance the environment by putting back as much as it takes
Bacardi was founded in Cuba in 1862 by Facundo Bacardí Massó to help meet the colonial Spanish government’s need to reduce surplus molasses on the Caribbean island. Fast forward 154 years and the spirits company is still rising to external challenges, with social and environmental impacts driving decision-making as it aims to be a better and more sustainable business in the long term.
‘Good Spirited: building a sustainable future’ is the title of Bacardi’s sustainability strategy, which is focused on responsible sourcing, operational efficiencies and global packaging. ‘Our vision for sustainability is to have a balanced impact on the environment in which we operate, putting back as much as we take away,’ says Rodolfo Nervi, global quality, environment, health and safety director.
The strategy was announced in 2014 and requires the brands, which also include Bombay Sapphire gin, Dewar’s blended Scotch whisky and Martini vermouth and Italian sparkling wines, to reevaluate and augment their systems to achieve the overall objective of having a net-zero impact.
Making business sense
In terms of operational efficiencies, Bacardi has set company-wide goals to reduce water use and greenhouse-gas emissions by 55% and 50% respectively by 2017 against 2006 levels. The firm is also aiming by next year to have reduced packaging weight across its products by 10%.
Nervi points out that the spirits industry is energy- and water-intensive. In 2006 it took about 12 litres of water to produce one litre of Bacardi rum. That has been reduced to ten. Action to cut consumption of energy and water is therefore key to the company achieving its ambition to be more sustainable. But Nervi stresses that measures to reduce emissions or water consumption must be viable. ‘Sustainability needs to make business sense: good for the environment and good for the business,’ he says. ‘Energy efficiency tends to have a relatively fast payback, but improving water efficiency can be more difficult and tends to require high levels of capital investment.’
Julio Torruella, global environment director, describes the water reduction target as challenging. Whereas reducing GHG emissions is necessary across the company’s global operations, he says tackling water use is more of a local issue and may require different solutions, particularly in parts of the world where demand for it outstrips supply.
‘Reducing consumption in Scotland is not the same as reducing it in India,’ he says. ‘We’ve looked at our global operations and identified where water stress is an issue.’ On the island of Puerto Rico access to freshwater can be difficult but it is home to the world’s largest premium rum distillery. Bacardi collects and treats the water used to clean the oak barrels in which the rum matures as well as the plant’s domestic sewage water. This is reused to cool equipment used in the distilling process, saving around 57,000 litres a day.
Nervi says water-saving programmes do not focus only on reduction at source but include water harvesting. At Bacardi’s distillery, near San Juan, initiatives are being implemented to collect rainwater from the roofs of the rum ageing warehouses and tank farms’ secondary containments to reuse for process and utilities needs. Meanwhile, the Bombay Sapphire distillery at the renovated Laverstoke Mill in Hampshire, which received the BREEAM award for industrial design in 2014, has rainwater harvesting and flow restricting water devices throughout the site (see panel, below). ‘We examine every option to give water a second life,’ says Nervi.
Between 2006 and 2014 Bacardi increased water efficiency globally by 46.5% through better operating discipline, water-conservation measures, recycling and more efficient equipment, he says.
Improving the quality of wastewater discharges is also a priority. Bacardi’s 2014 corporate responsibility report reveals that 1,147,000m3 of wastewater was discharged that year from the firm’s global production facilities, and 351,000m3 (or 23%) was applied to cropland as a fertiliser or for irrigation.
Powering ahead
Wastewater also provides Bacardi with energy. The company patented its own technology for using anaerobic digestion (AD) to treat wastewater and to produce energy from biogas, with the first plant opening at the Puerto Rico rum distillery in 1982. There are now three digesters at the site that treat 500,000 gallons of ‘still bottoms’, unfermented molasses and water from the distillery each day to produce biogas. This powers a cogeneration system to produce the electricity and steam used to make rum.
Nervi says Bacardi is tackling its emissions by improving energy efficiency and investing in renewables. Initiatives include installing two wind turbines at the Puerto Rico distillery and switching from fossil fuel to hydro energy for vermouth production in Italy. The turbines generate about 500,000 kWh of electricity a year, offsetting more than 400 tonnes of CO2. In September 2014 Bacardi updated progress at the two plants against the 2006 baseline: a 47% cut in GHG emissions at the rum distillery and a reduction of more than 30% at Martini.
In the UK, Dewar’s Aberfeldy distillery in the Scottish Highlands boasts a biomass boiler (see panel, above). The wood-pellet boiler came on stream at the end of 2014 and was funded partly by the Green Investment Bank. It replaced a heavy fuel oil boiler and has cut the distillery’s annual carbon footprint by 90%, saving around 6,500 tonnes of CO2 and reducing Bacardi’s overall GHG emissions by 6% a year.
At the distillery in Arandas, Mexico, a mixture of agave bagasse (the fibrous matter left after juice is extracted) and woodchips is used in a biomass boiler to generate steam for agave sugar extraction, cooking and distillation to produce Tequila Cazadores. About 11,000 tonnes of the agave bagasse generated onsite from the sugar extraction process is burned every year as biomass fuel, says Torruella.
A good source
Bacardi envisages all raw materials and packaging to come from sustainably sourced, renewable or recycled materials. Molasses, a by-product of sugarcane, is a key ingredient in rum and Nervi says the aim of the sourcing vision is to reduce environmental and social impacts, while maintaining or enhancing the economic status of growers and suppliers.
The firm is a founder member of Bonsucro, the not- for-profit, multi-stakeholder organisation established in 2008 to promote sustainable sugarcane. Bacardi wants all sugarcane-derived products to come from sustainably certified sources by 2022, with an interim 40% target by 2017.
Nervi says the 2022 goal is well within reach. In Fiji, Bacardi championed ‘model sugarcane farms’ in partnership with WWF in a three-year pilot. The programme focused on helping farmers increase crop yields while reducing water run-off and other older practices that are hazardous to the Great Sea Reef, the world’s third longest of its kind. Initiatives included simple changes, such as terracing and carefully distancing rows of sugarcane, to help control nutrient and seed run-off into waterways that lead to the reef.
Measuring progress
In March 2014, Bacardi unveiled an auditing method to accurately measure performance and progress against its key environmental sustainability objectives. Called BEST – Bacardi Environmental Sustainability Tracking – and developed in association with a team of accounting academics at Poole College of Management at North Carolina State University, the method uses flexible budgeting to measure the performance in one reporting year against a base year.
‘Rather than dividing the volume of water used by the amount of alcohol produced to assess efficiency, BEST calculates very specific data from a set baseline for each product,’ says Nervi. ‘This is important because the energy and water profile can vary depending on the product. For example, it requires more water to produce tequila than rum.
‘BEST enables Bacardi to measure improvements year on year. The results provide an accurate assessment of not simply the cost of goods, but also the degree of efficiency in Bacardi’s use of resources.’ Bacardi is the first company to apply this accounting method to monitoring environmental metrics.
Measuring progress is one thing, but Nervi stresses that engaging staff is key if the company is to achieve its targets. He says the Good Spirited initiative empowers the firm’s 6,000 global workforce to contribute more directly to its environmental sustainability programme. A sustainability hub has been created on the company’s intranet and more than 50 employees have volunteered as ‘green champions’.
Nervi points out that the central sustainability team is relatively small, numbering just five, so it relies on a network of local teams, including volunteer ‘green champions’, and experts, such as engineers, to identify and assess opportunities to boost efficiency. Sites are encouraged to learn from each other and share best practice. ‘Bacardi operates 30 production facilities across the world, so there is a profusion of languages and regulations,’ says Nervi. ‘Strong local knowledge is therefore very important. Expertise is also crucial. There is no point solving one problem by creating another because you haven’t, for example, considered the energy implications of installing a new water treatment plant.’
Learning points
- Sustainability needs to make business sense: good for the environment and good for the business.
- ‘Reduce, reuse, recycle’ is the key principle behind decreasing GHG emissions, water consumption and waste.
- A successful global sustainability strategy integrating local knowledge and expertise – the right balance of corporate and local resources.
- Establish metrics to monitor and drive decisions.
- Initiatives need to be locally relevant and demonstrate measurable benefits to watersheds and neighbours.
BREEAM tonic for Bombay Sapphire distillery
Laverstoke Mill in Hampshire was, in 2014, the first distillery to win the BREEAM industrial award and the first refurbishment project anywhere to achieve an outstanding rating, scoring 86.81% under the method for assessing the sustainability of buildings.
The disused former paper mill, which dates from the 18th century, includes Grade II listed buildings and is set on a site of special scientific interest with a section of the River Test flowing through it. More than 80% of the original buildings were retained. The three still houses and visitor centre use renewable energy from a biomass boiler, solar photovoltaic array and a 6kW hydroelectric turbine. Unused heat generated during gin-making warms the unique glasshouses at the site, in which many of the botanicals used in Bombay Sapphire gin are grown.
The project scored 100% of available credits in the BREEAM energy and management categories (2008 version) and more than 90% in the water, materials and waste categories. An additional 5% worth of innovation credits were given for the high performance levels achieved.
Dewar’s Aberfeldy distillery steams ahead
Highland single malt whisky has been produced at the Aberfeldy distillery since 1898 and in 2014 Dewar’s installed a biomass steam boiler there, reducing the carbon footprint by 90%.
The boiler, which replaced one run on oil, was part funded by the Green Investment Bank. It burns wood pellets from Balcas and uses renewable energy and raw materials sourced from local, sustainably managed forests at the timber processor’s Invergordon plant.
Dewar’s is a member of the Highlands-based Combination of Rothes Distillers, which supports a biomass energy plant in Speyside. This uses by-products from nearby malt whisky distilleries to produce renewable energy for the local community as well as a liquid animal feed product called pot ale syrup. The site comprises a 7.2MW capacity power plant and a 66.5t/h pot ale evaporator plant.
