Brewers Association 2015 Sustainability Benchmarking

introductionThe Brewers Association (BA) conducts and hosts a numberof surveys and forums that assist the craft brewing sector inbrewing the highest quality beer in a profitable manner. This firstSustainability Benchmarking Report shares additional insighton key performance indicators (KPIs) and best practices ofsustainable brewers. It represents the participation of nearly80 breweries of all sizes and regions within the U.S. Detailedmonthly economic and environmental data for calendaryear 2014 were collected, analyzed and trended. Theinsights and best practices identified from these data willassist the sector to continue to grow in a responsible manner.The purpose of the BA is to promote and protect Americancraft brewers, their beers and the community of brewingenthusiasts. As brewers, we acknowledge that we dependupon the natural resources and communities that make ourlivelihoods possible, and that threats to these systems affectour ability to brew beer.This BA subcommittee is helping to create additionalbusiness value through: EconomicSustainability EnvironmentalSustainability SocialSustainabilityThe BA has established a Sustainability Subcommittee thatserves the BA purpose by helping members continue to brewthe highest quality beers in a manner that strengthens thevalue of our businesses, protects the environment for brewingingredients and future generations, and enhances the livesof our workforce and the communities we call home.Sustainability DefinitionThere are many definitions and interpretations of theterm “sustainability”. The classic definition includesthree pillars of focus: economic, environmental andsocial well-being.To be a sustainable business, there should bea balance between all three pillars. Economicsustainability is the ability to support a defined level ofprofitability and growth to continue at an acceptablerate. Environmental sustainability is the ability to usenatural resources as efficiently as possible, minimizethe creation of waste and pollution, and do so in amanner that can be continued indefinitely. Socialsustainability is the ability to attract and retain the bestemployees, provide them with a safe and prosperousplace to work, and give back and support the localcommunity.6BrewersAssociation.orgDirect funding and researchtowards sustainabilityrelated issues and solutionsthat drive the greatestbusiness value for ourmembership;Identifying, benchmarkingand sharing sustainabilityrelated best practices, tools,and resources that areapplicable to breweries ofall sizes; andPromoting craft brewingas a sustainable sector byshowing what is possiblethrough collaboration anduniting a cohesive voicethat inspires change.The Brewers Association sustainability subcommitteehas identified six priority actions for environmentalfocus: Improve the usage efficiency of energy, waterand other natural resourcesReduce the amount and impacts of wastecreated and disposedProtect the long-term viability of watersheds inwhich we operateIdentify and promote more sustainable barleyand hop growing practicesIdentify and promote more sustainablepackaging optionsIncrease member education and engagementin sustainability related initiatives

IntroductionEnvironmental AttributesThe environmental aspects of sustainability are the mainfocus of this benchmarking report. Key performanceindicators (KPIs) include: fuel, electricity, water andpurchased CO2 usage efficiency; wastewater effluent,greenhouse gas emissions, solid waste disposal and recyclingefficiencies. The diagram below outlines a hierarchy craftbreweries can use to reduce their environmental impact in alogical progression. Through these steps, it is possible for thesector to grow in a more sustainable manner.It is important to note the potential adverse impacts ofdisregarding the order of these steps. If a brewery chooses topurchase “green energy” before making efforts to reducetheir natural resource usage, the impacts may nullify eachother, therefore rendering the investment ineffective. To besustainable, breweries should take steps to improve theirown operations before considering steps to improve supplyand distribution chains.Usage and emissions efficiencies are affected by a numberof variables including building and equipment age andconfigurations, brewing process operations, brewingrecipes and styles, local climatic conditions, etc. We havecommented on these variables throughout the report andhow they may impact accurate comparisons.2015 Sustainability Benchmarking Report7

IntroductionEconomic AttributesIndustry Market SegmentsThe importance of balancing economic, environmentaland social attributes has been outlined earlier in this report.Reducing environmental impacts at a brewery is veryimportant, but the economics of implementation shouldbe considered equally important. This first benchmarkingstudy, collected both usage and cost efficiency relatedinformation. It is important for brewers to understand thecosts of electricity, fuel, water, wastewater, and wastedisposal before embarking upon a sustainability program.Similar to usage information, these costs are normalizedon a per barrel packaged basis. Accordingly, this showsthe economies of scale when comparing a small breweryproducing less than 1,000 barrels to a regional breweryproducing more than 100,000 barrels packaged per year.As defined by the BA, the data has been classified in threedistinct craft beer industry market segments: brewpubs,microbreweries and regional craft breweries. Each of thesesegments will be trended and analyzed in this report.There are obvious geographic variables to be considered incomparing cost efficiencies. The price of utilities is not onlyspecific to a geographic region, but sometimes very specificto a community within a particular region. This variability ismost evident in the price for municipal water supply andwastewater treatment. As water scarcity becomes moreof a reality across the country for breweries, it is evident thecost of water and wastewater discharge will continue toincrease.Inflation can also play a part in comparing data from yearto year. This report is based on 2014 actual data. This shouldbe considered when comparing data from other years tothis dataset.BrewpubA restaurant-brewery that sells 25 percent or more of its beeron site. The beer is brewed primarily for sale in the restaurantand bar. The beer is often dispensed directly from thebrewery’s storage tanks. Where allowed by law, brewpubsoften sell beer “to go” and/or distribute to off-site accounts.Note: BA re-categorizes a company as a microbrewery if itsoff-site (distributed) beer sales exceed 75 percent.MicrobreweryA brewery that produces less than 15,000 barrels (17,600hectoliters) of beer per year with 75 percent or more of itsbeer sold off-site. Microbreweries sell to the public by oneor more of the following methods: the traditional three-tiersystem (brewer to wholesaler to retailer to consumer); thetwo-tier system (brewer acting as wholesaler to retailer toconsumer); and, directly to the consumer through carry-outsand/or on-site tap-room or restaurant sales.Regional Craft BreweryAn independent regional brewery with a majority of volumein “traditional” or “innovative” beer(s), that producesbetween 15,000 and 6,000,000 barrels annually.8BrewersAssociation.org

IntroductionGeographic RegionsAs defined by the BA, there are six distinct regional designations: Northeast, South, Mountain West, North Central, PacificNorthwest and Pacific. Each of these geographic regions will be trended and analyzed separately in this report. In addition,some non-U.S. craft breweries provided data for the study. These will be grouped in a separate geographic region for purposesof this report.Pacific NorthwestPacificMountain WestNorth CentralSouthNortheast2015 Sustainability Benchmarking Report9

section 1:Project DescriptionIncreasingly, environmental stewardship is a priority forboth beer consumers and producers. Maintaining ahealthy balance between stewardship, social enrichment,and economic vitality is important to the future of craftbrewing. BA members expressed a desire to benchmark keyperformance indicators (KPIs) on a consistent basis in orderto set aggressive, but realistic, goals and targets.About the ProjectIn 2013, the BA began working with Antea Group, a globalsustainability consultancy, to create sustainability-relatedbest practices guidance manuals and tools for brewersrelated to energy, water, wastewater, carbon dioxide andsolid waste. Craft brewers are able to use the manuals andtools to identify strategies for improving efficiency to allowfor operation and growth in a more sustainable manner.volume. The results of the pilot study were presented at theCraft Brewers Conference in April 2014. Results of the 2014pilot study emphasized the value in tracking and trendingoperational data, but also highlighted the need to haverepresentative benchmarking data in order to create realand lasting business value. Tracking and monitoring data isan important first step, but the ability to compare operationswithin a sector provides valuable insights for facilities tounderstand where improvements may be made to helpdrive more sustainable operations.The BA engaged Antea Group to expand the pilotbenchmarking study from the smaller initial pilot participantsfor 2015. The 2015 study includes 2014 utility, resource andproduction data from 79 breweries, representing a robustvariety of production sizes, and geographic locations.Antea Group ensures trusted third-party data collectionand aggregation, user anonymity and consistent use andcomparison of KPIs. Participation in the study was voluntary,with requests for participation made by the BA, variousstate and local guilds, and by Antea Group during the CraftBrewers Conference in April 2015. Participants were asked tocomplete their 2014 data entry using an Excel spreadsheetand submitted to Antea Group for aggregation.What Are the Benefits of Participation?Craft breweries that participated in the 2014 pilotbenchmarking study and target setting exercise identifiedthe potential for significant cost savings. These savingsranged from 35,000 to 235,000 annually for small tolarger craft breweries. Savings were quantified by beingable to establish water and energy use ratio benchmarksbased on production category. Savings were calculatedby comparing the difference between current costs withcosts of a target use ratio benchmark. One of the primarybenefits of the 2015 benchmarking exercise was the abilityto quantify the financial benefits of implementing efficiencyrelated projects.A pilot benchmarking study was conducted in 2014 using2013 utility data from 25 craft breweries ranging fromless than 1,000 to over 100,000 barrels annual production10BrewersAssociation.orgAll breweries that participate in future benchmarkingefforts will be assigned a username and password to allowfor online data entry from a desktop or mobile device.Additional benefits of participation include access to

Project Descriptionmultiple queries allowing specific brewery comparisonsagainst various production levels, geographic regionsand operating configurations. Participants will be allowedto enter target usage and cost values and track ongoingmonthly performance against targets.Benchmarking Goals and ProcessCraft breweries are growing at a substantial pace, but in atime when resource challenges and scenarios such as watershortages are a reality in certain parts of the United States.This fast-growing sector of our economy should take careto avoid being considered as growing in an unsustainableor reckless manner. The figure below, from the BA website,illustrates the rapid growth of the industry within the past 15years.This report provides a platform to share best practices andgoals identified by our peers to show how we can usewater more efficiently, generate less waste water and solidwaste and even decrease our total energy usage includingreducing greenhouse gas production.Throughout this report the top 25% of performers may bereferenced in order to share their best practices.moretoefficiently,less wastewatertheandagreementsolid wasteEffortsproducegeneratethis reportstem fromand evendecreaseour totalusageincludingbetweenthe brewersto submittheir energydata andthe gthedata.reducing greenhouse gas production.Because this process requires a great deal of organization,datawas reviewedfor accuracyandofcompleteness,oftenThroughoutthis reportthe top 25%performers mittersreferenced in order to share their best practices.to determine what data was included in the submission andwhereoriginated.werefromconsultedto validateEffortsit toproduce Participantsthis report stemthe tween the brewers to submit their data and themeticulous work of organizing, normalizing, and comparingdata.Becauseprocess requiresa greatofIn themanycases,the thispreliminaryidentificationof dealextremeorganization,datawas reviewedaccuracyoutliersprompteddiscussionof the fordatasource andor acompleteness,oftenwith a withseriestheof breweryclarifying participantquestionsparticularbreweryoperationto help clarify or correct potentially wrong or inaccuratesubmissions. Data validation was an essential part of thisbenchmarking study as each brewery is unique in terms oftheir region, operations, and segments.Allowing Fair ComparisonsDue to the varying differences between the breweriesthat participated in this study, it is important to discuss howdata was compared, e.g., how the following aspects wereaccounted for: Onsite cold storage vs. offsite cold storageOnsite food preparation (e.g. restaurant) vs. foodtrucks or no foodTasting roomsOnsite wastewater pretreatmentShared tenant buildingsDepending on applicability, some breweries may not haveprovided these data. For example, some smaller brewerieswhich store beer offsite before distribution may not havebeen able to include the energy usage data for this offsitecold storage location. Some data came from brewpubsand some breweries have tasting rooms which use electricityand water. Still others have additional energy for theirposed tothe submittersto moredeterminewhat datawaswastewaterpretreatment.Evenchallengingmay betheleasesubmissionwhereit originated.smallincludedbreweriesinthatspace inandsharedtenantbuildingsParticipantsconsultedto validatedataanomaliesandwherethe ther questions as needed.so it is hard to determine actual usage. Few breweries at asmaller scale are able to sub-meter and track utility usage atIn many cases, the preliminary identification of extremesmallerthan thefiscal meterlevel. of the data source or aoutliersprompteddiscussionparticular brewery operation with the brewery participant toWherefollowup callswere madethehelppossible,clarify orcorrectpotentiallywrong toorassureinaccuratedatasubmissions.collected Datawas accurate,andtodetermineifanyvalidation was an essential part of thisotherbenchmarkingdata was applicableto brewerythe study.By identifyingstudy as eachis uniquein terms oftheir region,operations,and segments.the differentmarketsegments,it was possible to bettercompare production volumes, identify and, if possible,separate pub operations, and determine what informationHistorical U.S. Brewery Count2015 Sustainability Benchmarking Report11

Project DescriptionNormalizing to Barrels Packaged or Taxable BeerEnvironmental attributes at breweries can eventuallybe measured in economic variables, as evident in thisbenchmarking report. The cost of electricity, fuel, water,wastewater, CO2 and solid waste were normalized on a costper barrel scale for each participating brewery.The standard normalizer global beverage companies use indeterminingintensity factorsis beveragebased on barrelsof productThe standardnormalizerglobalcompaniesuse inTaxablefactorsbarrels (bbls)is s basedonthebarrelsproductto obtainfrom accountingandisisoftenoften theusedeasiestfor externalpackaged.Taxablebarrels (bbls)numberproduction reporting. Packaged volume, rather than barrelsto obtainfrom accounting and is often used for externalbrewed, is used to ensure consistency with the rest of theproductionreporting. Packaged volume, rather than barrelsbeverage sector.Packaged beer, “finished beer” andbrewed, is used to ensure consistency with the rest of thevolume that goes straight to brite beer tanks (BBT) are allbeverage sector. Packaged beer, “finished beer” andincluded in this category.volume that goes straight to brite beer tanks (BBT) are allincluded in this category.Creating Utilization Efficiency and CostCreatingUtilization Efficiency and Cost ChartsChartsBelow are examples of the charts presented in the reportand guidelines for interpretation.Efficiency Charts: Many of the measured metric categories(e.g. electricity, fuel, water, wastewater, etc.) haveefficiency charts that look similar to this electricity usageexample graph. Each participating brewery was plotted attheir kilowatt hours of electricity per barrel (kWh/bbl) againsttheir production capacity (bbls/yr). The relative placementon the graph can show the more efficient vs. less-efficientbreweries. The lower the kWh/bbl, the more efficient abrewery’s operations. Charts for other metrics are plottedon a therms/bbl, lbs/bbl, etc. scale for the appropriateadditional benchmarkingfigure, such as the electricity usageenvironmentalattribute.benchmarks, which outlines the top 25%, the middle 50%,and the bottom 25% of performers in the appropriateproduction volumes. In this case, a brewery operating at 75E L E C T RIC IT Y US AGEkWh/bbl would be in the top 25% of peer breweries. This isLESS T HAN 1,000 BBL S /Y Rmeant to illustrate what other breweries in the category are200achieving and help stimulate awareness of efficiencycapabilities so the entire industry can strive to reach the topKWH/BBLwas specifically brewery-based. The best effort was made tocompare only breweries on the same level. As benchmarkingefforts continue to evolve, more data and more granulardata will help to identify better comparisons for the abovedifferences.100Once the data had been normalized, graphs were utilized toOnceshowthe datahad ies. graphsThis reportpresentsto iencycharts forelectricity,fuel, ity,fuel, water,waste chartsrecycled,grain recycled,carbonwastedioxide ,carbondioxideusage,greenhouse gas emissions per barrel. This datawas thenand greenhousegasemiss

The case studies provided, illustrate the creativity and . Katie Wallace – New Belgium Brewing Company (co-chair) Luke Truman – Allagash Brewing Company Casey Chartier – Bear Republic Brewing Co. . Figueroa Mountain Brewing Co. FiftyFifty Brewing Co. Flying Fish Brewing Co. Foundation Brewing Comp