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Sustainable Practices in the Craft Beer Industry, by Kent van Alstyne (June 8, 2014)

Posted by: | February 4, 2015 Comments Off on Sustainable Practices in the Craft Beer Industry, by Kent van Alstyne (June 8, 2014) |

Anyone who has taken a stroll down the beer aisle in a local grocery store can attest to the vast array of options available to a consumer. This variety is largely thanks to the recent surge in popularity of so-called “craft beer.” Produced by small, independent brewers, these beers continue to grow in market share—up to almost 8% in 20131 —and represent the only segment of the American beer market that increased sales in 2013.2 Craft beer, however, generally lacks the ubiquitous “organic”, “sustainably harvested”, “locally produced”, “green certified” monikers that pervade the meat, produce, and dairy aisles—despite the considerable environmental impacts of brewing. As a recent press release about sustainability in the brewing industry summed up, “[t]he four basic ingredients in beer (water, yeast, malt, hops) directly tie breweries to the environment.” Industry leaders are spearheading a movement toward sustainable brewing by creating innovative legal and design solutions—and widespread “eco-labeling” of beer will likely follow. By creating a brewery-specific sustainability certification and corresponding label, the craft beer industry can help ensure consumers are provided with an accurate and reliable way of choosing sustainably crafted beer.

Industry Leaders in Sustainability

Sustainability was probably not on the forefront of most craft brewers’ minds until quite recently. Some brewers, however, have always conducted their Businesses with an eye toward sustainability. Nowhere is that more evident than at Sierra Nevada Brewing Co. in Chico, California. Sierra Nevada produces over 60% of the energy needs of the brewery through a combination of solar power and one-of-a-kind—at least for a brewery—hydrogen fuel cells.3 The brewery also operated an incentive program with local farmers, which has been rolled over into individual contracts with each farmer.4 The program offered a financial bonus to growers for each acre enrolled. To take advantage of the program, farmers agreed to a list of requirements encouraging sustainable and environmentally friendly practices.5 Perhaps most impressively, Sierra Nevada operates its own on-site wastewater treatment facility that pre-treats wastewater before sending it to the municipal supply.6 The treatment process creates biogas, which Sierra Nevada uses to reduce natural gas consumption in the brewery boilers.7 As a result of the brewery’s substantial efforts, the Environmental Protection Agency recognized Sierra Nevada with multiple environmental sustainability awards in 2010, 2011, and 2012. 8

Another brewery at the forefront of the sustainable brewing push is New Belgium, based in Fort Collins, Colorado. At New Belgium, sustainability features prominently in the company Core Values and Beliefs—committing the company to environmental stewardship and kindling environmental change as a business role model.9 These commitments are evident in the company’s day to day activities. As a result of an internal environmental audit into the brewery’s carbon footprint, New Belgium voluntarily paid premiums through the City of Fort Collins’ Wind Program and purchased renewable energy credits to offset all the company’s coal-powered electricity use.10 More recently, the company created its own internal electricity tax.11 The company sets aside an amount of money per kilowatt of electricity used at the brewery. This “tax” is then used to increase New Belgium’s energy efficiency and fund renewable energy projects.12 The brewery also sends less than 1% of its total waste to landfills; the rest is recycled or composted.13 In addition to the substantial sustainability efforts at the brewery itself, New Belgium’s dedication to being an industry role-model for sustainability provided part of the impetus for joining forces with Sierra Nevada and other craft brewers to develop industry-wide sustainability tools.

Brewers Association Sustainability Tools

As a result of the efforts of New Belgium, Sierra Nevada, and other industry leaders, the Brewers Association officially recognized the crucial importance of sustainable brewing and developed a sustainability manual in late 2012.14 The comprehensive three-part manual was created in conjunction with industry leaders in sustainability, and provides a template for other craft brewers to follow. The handbook focuses on three main areas of concern for brewers: energy, solid waste, and water.15 Each section outlines in detail “best practices” designed to reduce environmental impact and promote sustainability. Sierra Nevada, New Belgium, and other craft brewers are used as case studies of the successful implementation of these best practices.16

As the sustainability tools currently stand, they are not mandatory. Nor do the suggestions, even if followed, result in a “stamp of approval” or certification. Craft brewers are therefore only likely to follow the guidelines if they stand to gain financially as a result—though some might based on purely ethical considerations. A certification system, similar to the LEED certification in building, could encourage breweries to follow environmentally sound guidelines and suggestions that might otherwise be ignored because of financial considerations. The best practices identified by the sustainability handbook provide a perfect basis for crafting a certification system. These certifications could be placed directly on packaging in the form of a label to help consumers choose between products based on the sustainability of the brewer. The widespread acceptance of similar labels in other food products suggests they could be similarly influential in consumer beer preference.

The unique labeling requirements placed on beer by federal law are unlikely to pose a problem for a private certification and label. The Alcohol and Tobacco Tax and Trade Bureau (TTB) is responsible for promulgating and enforcing regulation on beer.17 While significant requirements and prohibitions on labeling of beer exist, none likely relate to a sustainable brewing certification.18 Regulations also explicitly allow any “additional information” on labels beyond mandatory requirements, provided the additional information is not otherwise prohibited.19 Since a private certification label is probably additional information that is unlikely to be prohibited, the label would be legal for purposes of federal law.20

Thanks in large part to the innovations of craft beer leaders like New Belgium and Sierra Nevada, sustainable brewing practices are becoming more mainstream. The adoption of detailed guidelines by the Brewers Association is a step in the right direction. Without a certification system, however, the incentives for compliance remain largely uncertain. A LEED-type certification released by the Brewers Association based on the sustainability tools would help consumers show their preference for environmentally sound brewing. As a result, more craft brewers would hopefully be encouraged to adopt sustainable brewing practices.



1 Brewers Association, Craft Brewing Facts (2014).
2 In fact, beer sales as a whole were down nearly 2% in 2013. Id.
4 Id. at 6.
5 Id.
6 Sierra Nevada, Sustainability: Water-Biogas Recovery (2014) .
7 Id.
8 BIENNIAL SUSTAINABILITY REPORT 2012, supra note 3, at 20.
9 New Belgium, Company History: Company Core Values and Beliefs (2014).
10 New Belgium, Sustainability Stories: Developing an Internal Electricity Tax (Jan. 7, 2013).
11 Id.
12 Id.
14 Brewers Association, Sustainability Tools (2014).
15 Id.
16 Id.
17 Alcohol and Tobacco Tax and Trade Bureau, U.S. Dept. of the Treasury, Labeling and Formulation Approval (2012).
18 27 C.F.R. § 7.28. Labeling requirements include brand name, beer class, alcohol content, medical warnings, and volume. Id. at § 7.22. Labeling prohibitions include false statements, health-related claims, and anything the TTB determines is likely to “mislead the consumer.” Id. at § 7.29. It is important to note that any labeling that claims the product is “organic” must comply with the regulatory definition provided by the United States Department of Agriculture. Id. at § 7.81(b).
19 Id. at § 7.28(e) (“Additional information. Labels may contain information other than the mandatory label information required…if the information complies with the requirements of this subpart and does not conflict with, or in any manner qualify, statements required by this part”).
20 Of course States have their own additional requirements on beer labeling that could pose problems for a sustainability label in that State.

under: Business, Food, General

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