Top-shelf liquor bottles vary in shape, design and color to draw the eye behind most bars, but Diageo is doing away with them to explore the viability of reusable packaging and distribution.
In partnership with circular economy startup ecoSPIRITS, the beverage giant will offer Gordon’s gin, Captain Morgan rum and Smirnoff vodka in refillable 4.5-liter vessels across 18 markets over the next three years.
Each ecoSPIRITS "ecoTOTE" is a 4.5 liter glass bottle encased in plastic with an inner aluminum frame. The container, built to last for 150 refills, has a lower carbon intensity than the equivalent number of bottles they replace at a bar after six refills, according to ecoSPIRITS. The system is supposed to replace 900 of the typical 750-milliliter glass bottles normally used by restaurants and bars over the lifetime of one ecoSPIRITS tote. The company estimates its totes have a 60 to 90 percent lower CO2 footprint than traditional bar bottles.
"We will be able to reduce both carbon and cost and the pubs and bars will benefit from the ease of having reusable spirits packaging," Ewan Andrew, Diageo's CSO and president of global supply chain and procurement, said in a statement.
Glass bottles are 20% of spirits’ business CO2
Packaging makes up a significant portion of the carbon intensity of spirits production and distribution. Commonly used 750-milliliter glass bottles account for 20 percent of the carbon footprint of corn-based spirits, second only to the distillation process at 36 percent, according to an analysis by the Beverage Industry Environmental Roundtable in 2012. Warehousing, as well as corn production and transport, followed at roughly 10 percent each.
Glass bottles can be recycled repeatedly. Thirty-two percent of glass containers are recycled in the U.S., according to the EPA. By contrast, in the EU, 80 percent of glass bottles were collected for recycling in 2021, according to the Close the Glass Loop partnership.
New glass production is highly carbon intensive, from mining silica to melting glass within furnaces powered by fuel oil or natural gas to reach temperatures as high as 3,000 degrees Fahrenheit, often continuously. Glass manufacturing emitted 95 million metric tons of carbon dioxide in 2022, according to Statista.
$10 million in Series A funding
In 2020 Diageo set a 10-year "Society 2030 goal" to reach net zero carbon and 100 percent renewable direct energy, halving its Scope 3 carbon emissions.
Diageo's partnership with EcoSpirits began two years ago during its effort to identify startups tackling the industry’s sustainability challenges, according to Diageo Global Marketing Sustainability Director Deb Caldow.
EcoSPIRITS, based in Singapore, launched in 2018 and in May attracted $10 million in Series A funding led by Closed Loop Partners.
"We saw the company’s potential to change the way we provide spirits to bars and restaurants, helping to reduce glass bottle usage and ultimately the carbon emissions in our supply chain," Caldow said via email.
"For the circular economy to achieve global scale, innovators like ecoSPIRITS need the support of industry leaders like Diageo in catalyzing the linear to circular packaging transition," Gabie said in a late November press release.
Cutting 95% of bottles from the bar business
Diageo and ecoSPIRITS have offered Smirnoff in ecoTOTES to 38 bars, restaurants and hotels in Bali and Jakarta since 2022. From the ongoing trial in Indonesia, Diageo estimated the circular delivery method could slash the usage of glass bottles by 95 percent and help to reduce carbon emissions from transportation and distribution.
An ilustration of an ecoTOTE spirits-on-tap system. Credit: ecoSPIRITS
EcoSPIRITS claims the initial success of the pilot to prove the commercial viability of circular packaging in Indonesia.
"We have already seen positive impact from a smaller trial and look forward to rolling it out in further markets as we continue to build towards our Society 2030 targets," Caldow said. "As we roll this out to more markets, we can build a broader evidence base, develop our systems and bring benefits across our supply chain."
Among the projects supporting Diageo's Scope 3 goals for 2030 is an effort, announced in August, to begin producing Smirnoff, Captain Morgan and Tanqueray bottles in 2027 at a net-zero furnace in Elton, England. The hydrogen and green-energy-fueled furnace, built by glass maker Encirc, is meant to slash by 90 percent the CO2 emissions typical of glass bottle production. Diageo aims to offset the remaining 10 percent of emissions through carbon capture.
How it works
Once an ecoTOTE is empty, ecoSPIRITS takes the box to the nearest of its 30 regional "ecoPLANT" hubs, usually within a 500-mile distance. The tote is then washed, refilled and redistributed.
"The ecoPLANT is at the heart of the whole ecoSPIRITS system because it allows us to service small markets — like the Cayman Islands or the Dominican Republic — on a closed-loop basis, or big markets like the U.K., France and Italy," said EcoSpirits CEO and co-founder Paul Gabie.
Early in November the company launched in the U.S. in Las Vegas, in partnership with South Point Hotel Casino & Spa.
In August, ecoSPIRITS packaging for Bacardi Rum appeared on Carnival Cruise Line ships.