With annual revenues close to $7.6 billion, MillerCoors is the second largest beer company in America. The company markets a portfolio of more than 65 beers: flagship brands such as Miller Genuine, Miller Light and Coors Light, and an array of fast growing craft, premium and imported brands such as Blue Moon, Foster's, Peroni, and Grolsch. Two significant mergers over the past five years have boosted MillerCoors to a lead market position. In 2005, Coors and Molson merged. Three years later, SABMiller and Molson Coors joined their North American and Puerto Rico operations to create MillerCoors.
At the time of the 2008 merger, the MillerCoors executive team committed to sustainability throughout their business operation. Their tagline: "Great Beer, Great Responsibility." GreenBiz.com's Heather King talks with Tom Long, MillerCoors President and Chief Commercial Officer about the legacies of Frederick Miller and Adolph Coors, zero waste brewing, and the importance of measurable goals.
When SABMiller and Coors merged, your executive team re-invigorated a corporate commitment to becoming the leading beer company "the right way." Can you speak to the "traditions" of sustainability in Miller and Coors? Is corporate legacy driving MillerCoors sustainability commitment?
Adolph Coors and Frederick Miller were both strong founders, deeply involved in their communities. Coors' Golden brewery's water comes from Clear Creek, a resource proximate to the brewery. Miller's Caves were also formed because of its access to the fresh water sources of Plank Road. For both founders, there was a fundamental link between natural resources and the ability to produce quality beers. Protecting water sources was core to their businesses.
Today, our commitment to sustainability extends beyond our history of environmental stewardship. Sustainability is important to our employees. Our company attracts young people [for employment] for whom sustainability is a passion point. Sustainability is also progressively more important to our consumer base. Although studies report that people do not make purchase decisions based on a company's environmental record, our view is that more and more consumers are making such choices. They buy brands with which they can identify. For our market, environmental stewardship is increasingly a factor.
MillerCoors' sustainability report highlights your progress with water conservation, waste and packaging reduction, supply chain initiatives and carbon footprint reduction. What is your most significant win in advancing sustainability?
The most satisfying wins are those driven by employees who find ways to make a real difference. Three of our breweries maintained a water-to-beer ratio under 4.0 in 2009. Water is a finite world resource that is essential to the brewing process. Companywide, in 2009 we used 4.1 barrels of water per barrel of beer. Last year, our Texas brewery recorded ratios as low as 3.4 barrels of water per barrel of beer. That plays into our 2015 target ratio to reduce our water usage by 15 percent to achieve a 3.5:1.0 water-to-beer ratio across all plants.
Sometimes the creativity is remarkable. Although we incorporate LEED principles into new buildings like our headquarters, it is more difficult in a 100-year old building like our Milwaukee plant. Still, a Milwaukee employee planned and installed a green roof to reduce energy costs and storm water runoff.
Craft and import beers are the fastest growing market segments. Are there particular challenges or opportunities associated with producing and marketing these brands more sustainably?
Craft brands are a little different because the platforms of small beers can be 'niched' to the user group. It is possible to make the whole selling proposition an environmental one. For instance, Leinenkugel's is brewed in Chippewa Falls, Wisconsin. The beer is all about the great northern outdoors. Its environmental position can be really supportive of its brand positioning.
We have a greater challenge with our imported brands. International shipping means a higher carbon footprint. Would we ever consider denigrating the enormous authenticity of a great brand like the Italian Peroni by brewing it domestically? This is a tough business decision. Successful imports present a dilemma for the brewing industry and commerce in general.
MillerCoors has achieved zero waste in three breweries. What is your waste management strategy? Are you, like many companies, discovering new revenue streams through waste streams?
Although we use spent grains as livestock feed, I wouldn't say our waste reduction provides substantive revenue. We are moving toward zero waste across all of our operations. We currently reuse or recycle more than 99 percent of our brewery waste, which includes both solid waste -- wood, aluminum, glass, metals, plastic and paperboard -- and our brewing process byproducts. Three of our eight breweries send zero waste to landfill: Trenton, Ohio; Elkton, Virginia; and Irwindale, California. By 2015, we'll add more breweries to this list.
I understand MillerCoors is working across its universe of top 100 suppliers -- packaging, marketing and transportation -- to advance their sustainability efforts. Can you provide an example of a specific impact?
We are committed to working with our carriers and distributors to be more energy efficient. Our goal is to have 100 percent of our carriers join the US Environmental Protection Agency's Smartway program, which drives carriers to reduce transportation-related emissions. In 2009, 90 percent of our carriers were enrolled in the program, a 44 percent increase from 2008. We also increased the number of kegs and pallets on return trucks, reducing by 13 percent the number of trucks on the road, or 1,400 trucks per year. One of our key distributors, Powers Distributing in Michigan, added fifteen biofuel–electric hybrid trucks to its fleet. This reduces their diesel use by 25 percent, or 12,500 gallons per year.
What is your vision for MillerCoors ten years out? How will you measure success?
Our goal is to be the leader on sustainability in the beer industry. One of the things that companies like ours can do is lead by example. We can help ensure that sustainability goals are real and measured. Frankly, I think such statistical accountability has been lacking. There's been a lot more talk than substantive, credible progress. We will play a strong role in taking sustainability to a whole new level of accountability -- at MillerCoors and in the broader corporate world.
Heather King is a producer, writer, strategist and executive-in-residence. Her primary focus is on clean technology, corporate sustainability, and new media. She writes the "View from the C-Suite" column for GreenBiz.com.