Investing in local agriculture has made the world’s largest brewer more resilient to supply chain disruptions and climate change, a senior AB InBev executive said.
“About five years ago, there was a fundamental shift in the way we think about security of supply and risk management,” Ezgi Barcenas, AB InBev’s chief sustainability officer, told Insider on Wednesday. “It gave us the ability to work more strategically with suppliers. It’s about the water, the raw materials, the packaging, the energy that we need.”
AB InBev, which is based in Belgium, brews beers such as Budweiser, Corona and Stella Artois.
Barcenas said the change has paid off as industries grapple with global supply chain bottlenecks due to the pandemic and Russia’s war in Ukraine. AB InBev was able to avoid major consequences of the disruption, stressing that having local farming and recycling operations is more sustainable for the business.
However, climate change remains a major threat. The brewer operates in nearly 50 countries and plans to expand over the next decade, including in African markets, where severe drought and other natural disasters in some regions have affected food production and security. some water.
“What policies are going to enable us to actually achieve this growth?” Barcenas asked. “How do you lift people out of poverty so they can be part of our consumer base?”
AB InBev monitors the impact of climate change on the regions from which it sources its ingredients. Many farms depend on rain and lack irrigation, making them vulnerable to crop loss and disease, Barcenas said.
AB InBev hosted a discussion on food security alongside the World Economic Forum in Davos, Switzerland. The event highlighted the need to provide farmers with the right seed varieties, weather information and capital to be financially stable. Partnering with “influencers” or “early adopters” in farming communities who apply less fertilizer, use less water or use certain seed varieties can encourage other farmers to adopt more sustainable practices, said Barcelona.
National governments and development banks also have a role to play, she added. They can direct more funding to projects that help farmers adapt to the climate crisis.
For its part, AB InBev aims to power its operations with 100% renewable energy and is more than three quarters of the way there. The company is targeting net zero greenhouse gas emissions by 2040 across all of its operations, including the farmers it works with, the packaging of its products and the energy needed to keep those products fresh.
AB InBev’s investments in clean energy are also reducing the company’s risks amid an oil and gas crisis exacerbated by Russia’s invasion of Ukraine.
“Some of the projects we have invested in, where the return on investment would have been five or six years, will now be two or three years,” Barcenas said. “So it actually accelerates investment in alternative fuel sources or fuel efficiency improvements.”