Sustainability in the beer sector in the Netherlands: What are the difference between craft & large beer manufacturer?
Research carried out by Greenfish Netherlands has uncovered that the Dutch craft beer sector is struggling with becoming more sustainable. The main difficulties that are being faced by the brewers are the small-scale nature of the breweries and the uncertainty regarding the willingness to pay for sustainable beer by Dutch consumers.
The food processing industry – all transformers of agricultural products into food – has been labelled as a focal point for controlling the sustainability of the food industry. A remarkable branch of the food processing industry is the beer sector, encompassing the brewing and distribution of beer. This sector has to cope with several persistant issues, such as the intensive use of resources and the significant amounts of waste that results in large carbon footprints. (Patterson and Hoalst-Pullen, 2014)
The sector can be divided into two distinctive groups, big beer and craft beer. Big beer commonly refers to large output, globally-operating corporate entities holding a significant stake in the world beer market. On the contrary, craft beer commonly refers to relatively small output, independent breweries.
Most of the big beer breweries release yearly sustainability reports informing the public of progress made in this matter. However, there has not been any conclusive research on the Dutch craft beer segment’s sustainability. Additionally, smaller breweries like the craft breweries are usually more energy inefficient due to their small-scale nature. (Muster-Slawitsch et al., 2011) For that reason, Greenfish Netherlands has decided to analyse this sector.
The tool used for examining the current state of the Dutch craft beer sector is the Sustainable Value Assessment survey developed by Greenfish. Together with interviews with brewers and branch associations, the key areas of development can be identified and the main question can therefore be answered: how could sustainable development within the craft beer sector be carried out, both by the brewers and the consumers?
The Sustainable Value Assessment evaluates the breweries in six different categories: Company Policy, Production, Energy, Environment, Supply Chain and Mobility. Based on the scores in these categories and associated subcategories, key areas of development can be identified.
Small-scale nature of breweries hinders sustainable development
The results revealed several issues regarding the progress of sustainability within the craft beer sector. Due to the small-scale nature of the breweries, there are only limited resources, both capital-wise and personnel-wise, available for multifocal sustainable development. This results a singular focus within the breweries’ policies towards sustainability with at most one person full-time or several people part-time involved in set topics. This can be seen in the high potential for improvement regarding packaging, energy management, emissions management and supply chain management that was observed among the brewers in question.
The collective nature of CRAFT Onafhankelijke Brouwers – the branch organisation for craft brewers in the Netherlands – could be very beneficial to the development of affordable sustainability solutions for craft breweries. Collectively purchasing solar panels and investing in green electricity among other solutions would be beneficial to the financial capabilities of the relatively small-scale craft brewers. The savings could be used to invest in other measures with acceptable payback periods (e.g. premise insulation and LED), therefore accelerating the transition to more sustainable practices. The simplicity and affordability of the collective measures mentioned above should be emphasized, which is necessary in order to obtain a high participation rate from the smaller brewers.
You can influence the development of a sustainable craft beer sector with your beer selection
Moreover, for sustainability to really enter the market, a change in behaviour regarding the willingness to pay for more sustainable alcoholic beverages also needs to happen. The price of beer and our willingness to pay higher prices for it will need to increase in order to finance the sustainability projects of craft beer.
There is no existing public research about the current WTP for “sustainable” (craft) beer in the Netherlands. Therefore, the required measures to reach a critical mass of Dutch consumers in this branch are yet to be identified. The critical mass refers to the required amount of consumers that would finance a given project. Though it is of a speculative nature, a possible measure could be increased external communication about the efforts being carried out or efforts that are underway. Individual willingness cannot be translated into action if the purpose of a price increment is not addressed. Moreover, it should also be determined if the willingness to pay changes based on different sustainable measures. All in all, a thorough examination of the current Dutch WTP levels should be performed, and methods to enhance the consumer brand awareness could then be identified.
The long-standing bottle vs. can discussion
One of the brewers also brought up the long-standing discussion about beer packaging. It is rather interesting for the craft beer sector to research whether beer bottles or beer cans are the most sustainable form of primary packaging. Currently, a number of beer brewers, among the Big Beer and Craft Beer sectors, use interchanging bottles that can be re-used by any of the associated breweries to reduce the associated waste. A notable example is the Dutch Bruine Nederlandse Retourfles (lit. the Dutch Brown Retour Bottle).
However, due to the lower weight of aluminium and less voluminous nature of the cans, there is a potential for a huge reduction in fuel required and therefore a decrease of emissions during transport. Combined with the recyclability of the aluminium, it might be an intriguing contender against the traditional bottle. Still, the recycling aspect will depend on the local policies regarding it, which therefore complicates matters.
An all-encompassing Life Cycle Assessment (LCA) would need to be made, including scenarios for collective bottle or can sharing and mixed packaging (employing both bottles and cans).
However, there are also detrimental elements regarding packaging sharing. The loss of the traditional appearance might be ill-received by both the brewers and the consumers and collective packaging might dissolve brand differentiation. This topic has not been explored properly and is thus still open to further examination.
All in all, a high potential for improvement regarding packaging, energy management, emissions management and supply chain management was observed. However, it can be concluded that the Dutch craft beer sector is making progress overall, but it could exceed its current performance through segment-wide collaboration and an increase in public awareness, which would enhance the willingness to pay for sustainable beer.
Sjoerd J. Kraaijenhof – Junior Consultant, Green Solutions at Greenfish Nassim Daoudi – Chief Executive Officer at Greenfish
The Green Brewery Concept – Energy Efficiency and the Use of Renewable Energy Sources in Breweries, Muster-Slawitsch et al. (2011)
The Geography of Beer – Patterson and Hoalst-Pullen (2014)