Business Sustainability in the Alcohol Industry

Today’s consumers are more conscious than ever about where they spend their money and the companies they support. People want to purchase products from alcohol brands that are actively working towards business sustainability and want to make a positive impact in the community. Business sustainability isn’t just the responsible route to take. It can also win over more customers and improve brand loyalty

What is Business Sustainability?

Business sustainability is also often referred to as corporate sustainability. Essentially, it is the practice of coordinating social, environmental, and financial concerns to ensure ethical and responsible operations. Another way to think of it is by cultivating a focus on the planet, people and profits. This approach to business is becoming the new standard for alcohol brands and businesses across all industries.

The Three Pillars of Business Sustainability

  1. Environmental

Sustainability is most often associated with environmental issues, making this the most familiar pillar. Companies work to lessen their impact on the environment by reducing package waste, water use, and carbon footprint. Unfortunately, companies aren’t always held responsible for the waste they create. Benchmarking is one method that can be used to more accurately track externalities and calculate the all-in-cost for some businesses. On the plus side, these efforts usually also provide a positive financial impact. If you are reducing water waste, then you are also spending less money on this resource.

For example, Greenbar Distillery, based in Los Angeles, has achieved a carbon-negative brand by planting a tree for every bottle sold. Other brands have been using less packaging and incorporating more reused materials. For instance, Oaxaca’s Sombra Mezcal uses locally recycled glass. 

  1. Social

The social pillar, which is closely tied to the concept of social license, can also be difficult to clearly define. Ideally, a sustainable business will not only have the support of employees and stakeholders but also the people who live in the surrounding community. The ways in which businesses win everyone over can vary, but a lot comes down to just being a good member of the community. Offering maternity and paternity benefits along with flexible scheduling and professional development opportunities can help retain valuable employees. Alcohol brands can engage with the community through scholarship programs, fundraising, sponsorships, and other community-focused events.

If businesses are relying on a global supply chain, they are also responsible for making sure that all products are being responsibly sourced. There shouldn’t be any questions about the use of child labor, fair compensation, or safe work environments.

Santa Teresa Rum is a noteworthy example of a distillery that has successfully undertaken a social initiative responsible for transforming their surrounding community. Their Project Alcatraz program in Venezuela recruits local criminal gangs, rehabilitates them through “vocational training, values formation, psychological assistance, formal education and rugby,” and reintegrates them back into society once reformed. 

  1. Economic

Businesses are perhaps most familiar with the economic pillar and the idea that they need to be profitable in order to even work on the other two pillars. Risk management, compliance, and corporate governance all need to be addressed so that management is making decisions that align with the values of the company and the interests of everyone involved. This means avoiding any conflicts of interest, using accurate and transparent accounting methods, making sure that shareholders have input on important issues, staying away from any illegal activity, or using political donations to curry favor. The key here is that profit cannot be made the main priority at the expense of environmental and social concerns. 

One thing you can look for to see if a company is striking the right balance between these pillars and profit is B Corp. status. A B corporation certification means that a business is achieving the “highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose.” Overproof is dedicated to achieving B. Corp certification by 2022. 

Why Sustainability is Important

Business sustainability not only helps to protect the environment and support communities, but it is also good for your bottom line. Investors look at environmental, social, and governance (ESG) numbers when evaluating a company’s ethical practices. They want to invest in companies that are making a true difference while also earning profits.

Studies also show that companies with a favorable ESG rating have less debt and are able to improve their finances. In a survey of nearly 3,000 employees, a large share of the respondents said that a sustainable approach helps to align practices with company values, establish and build a favorable reputation, meet customer expectations and cultivate opportunities for growth. Sustainability initiatives have a wide range of positive benefits for everyone involved. 

How to Incorporate Sustainable Practices

  1. Define Goals

Think about the different groups that are a part of the business. What are their priorities and how can you address these?

  1. Establish a Mission

Write a mission statement that is action-oriented and outlines guiding values.

  1. Create Your Strategy

Based on your mission statement, create a sustainable business strategy.  Remember to take into account the triple bottom line: profit, people, and planet. Also, keep in mind that 33% of consumers are willing to pay more for a sustainable product. This can help you shape a strategy that remains profitable. 

  1. Continue to Assess Results

Once you have implemented your strategy, it is important to track objectives, measure success and make adjustments when necessary. 

Example of Sustainable Models in the Alcohol Industry

The alcohol beverage industry is one place in particular where there is ample opportunity to win over customers with business sustainability. Since alcohol is a luxury and not a necessity, consumers tend to be more discerning about the brands they support. Here are just a few examples of how distillers are using this to their advantage and creating sustainable business models.

  • Mezcal Union helped their employees and agave farmers form a union. Today, the company buys from 20 unionized distillery partners and provides them with a portion of revenue so that they can scale up their end of the business.
  • Reyka Vodka is the only distillery that uses geothermal energy to power operations. The company pulls heat from local hot springs and uses Icelandic spring water that is filtered through volcanic rocks to create a product with virtually no impurities.
  • Golden State Distillery is working to prevent the use of drift gillnets, which are detrimental to gray whales. They created the Gray Whale Gin and 1% of all sales are donated to Oceana. The bottle is also 100% biodegradable and covered in organic paint.
  • Flor de Cana rum is created with 100% renewable energy and is both fair trade and carbon neutral certified. The brand’s fair-trade certification is especially notable considering a long history of exploitation around sugar cane. The company also provides free education and medical care for all employees.
  • El Tesoro Tequila donates to APROQUEN, which is a nonprofit that serves children with cleft palates and severe burns. They also compost all organic matter and allow 5% of their crops to flower in order to allow the endangered long-nosed bat to act as a pollinator. 

Business sustainability is more than just a buzzword or a passing trend. Building a sustainable model that addresses the three pillars is the new standard for doing business in the modern world and winning over a loyal following of customers. There is no time like the present to begin shaping and implementing a sustainability strategy. 

FAQs 

What is business sustainability? 

Business sustainability refers to how a company handles environmental, social, and economic concerns in order to follow ethical practices.

What are the three pillars of business sustainability? 

Environmental, social, and economic. 

Why is sustainability in business important? 

Sustainability can help support the community and the environment while also increasing profits and reducing costs. 

How can a business use sustainability? 

Define your goals, establish a mission statement, craft a strategy around your mission, implement your strategy, continue to track and access efforts.

What are some examples of business sustainability in the alcohol industry? 

Greenbar Distillery is a carbon-negative brand that uses organic ingredients and plants a tree for every bottle sold. Mezcal Union helped workers and partners establish a union so that everyone was receiving fair compensation. Flor de Cana is both fair-trade and carbon-neutral certified. 

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