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David Paterson Heineken Presentation Profiting from Sustainability Conference York Dec 2014

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Conference Presentation at Profiting from Sustainability in York (UK) Dec 2014

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David Paterson Heineken Presentation Profiting from Sustainability Conference York Dec 2014

  1. 1. David Paterson Head of Public Affairs & CSR HEINEKEN UK 1 Brewing BBBrrreeewwwiiinnnggg aaaa BBBBeeeetttttttteeeerrrr WWWWoooorrrrlllldddd HHHHEEEEIIIINNNNEEEEKKKKEEEENNNN’’’’ssss aaaapppppppprrrrooooaaaacccchhhh ttttoooo ssssuuuussssttttaaaaiiiinnnnaaaabbbbiiiilllliiiittttyyyy
  2. 2. AAAAbbbboooouuuutttt HHHHEEEEIIIINNNNEEEEKKKKEEEENNNN UUUUKKKK 2
  3. 3. AAAAbbbboooouuuutttt HHHHEEEEIIIINNNNEEEEKKKKEEEENNNN UUUUKKKK 3 WWWWeeee’’’’rrrreeee tttthhhheeee ffffoooouuuurrrrtttthhhh llllaaaarrrrggggeeeesssstttt ppppuuuubbbb ooooppppeeeerrrraaaattttoooorrrr wwwwiiiitttthhhh aaaarrrroooouuuunnnndddd 1111,,,,111100000000 ppppuuuubbbbssss MMMMoooorrrreeee tttthhhhaaaannnn 99995555%%%% ooooffff oooouuuurrrr bbbbeeeeeeeerrrr ssssoooolllldddd iiiinnnn tttthhhheeee UUUUKKKK iiiissss bbbbrrrreeeewwwweeeedddd iiiinnnn tttthhhheeee UUUUKKKK OOOOuuuurrrr ccccoooommmmmmmmiiiittttmmmmeeeennnntttt ttttoooo ggggrrrroooowwwwiiiinnnngggg aaaa rrrreeeessssppppoooonnnnssssiiiibbbblllleeee aaaannnndddd ssssuuuussssttttaaaaiiiinnnnaaaabbbblllleeee bbbbuuuussssiiiinnnneeeessssssss hhhhaaaassss bbbbeeeeeeeennnn rrrreeeeccccooooggggnnnniiiisssseeeedddd bbbbyyyy BBBBuuuussssiiiinnnneeeessssssss iiiinnnn tttthhhheeee CCCCoooommmmmmmmuuuunnnniiiittttyyyy
  4. 4. Brewing BBBrrreeewwwiiinnnggg aaaa BBBBeeeetttttttteeeerrrr WWWWoooorrrrlllldddd – AAAA bbbbuuuussssiiiinnnneeeessssssss pppprrrriiiioooorrrriiiittttyyyy 4 EEEEnnnneeeerrrrggggyyyy WWWWaaaatttteeeerrrr RRRReeeessssppppoooonnnnssssiiiibbbblllleeee CCCCoooonnnnssssuuuummmmppppttttiiiioooonnnn SSSSoooouuuurrrrcccciiiinnnngggg CCCCoooommmmmmmmuuuunnnniiiittttiiiieeeessss HHHHeeeeaaaalllltttthhhh &&&& SSSSaaaaffffeeeettttyyyy
  5. 5. Doing Good Boost IIIImmmmaaaaggggeeee Save CCCCoooosssstttt MMMMiiiittttiiiiggggaaaatttteeee RRRRiiiisssskkkk Retain RRRReeeessssoooouuuurrrrcccceeeessss Licence– to- OOOOppppeeeerrrraaaatttteeee SSSSeeeellllllll oooouuuurrrr beers to mmmmoooorrrreeee consumers SSSSuuuussssttttaaaaiiiinnnnaaaabbbbiiiilllliiiittttyyyy ==== VVVVaaaalllluuuueeee CCCCrrrreeeeaaaattttiiiioooonnnn
  6. 6. 6 We know the impact of WWWeee kkknnnooowww ttthhheee iiimmmpppaaacccttt ooofff aaaaggggrrrriiiiccccuuuullllttttuuuurrrreeee hhhhaaaassss aaaa ssssiiiiggggnnnniiiiffffiiiiccccaaaannnntttt iiiimmmmppppaaaacccctttt oooonnnn oooouuuurrrr ccccaaaarrrrbbbboooonnnn ffffoooooooottttpppprrrriiiinnnntttt Source: Carbon Footprint Baseline Model – 2011 data, 23 OpCos, , weighted average, data per 15.10.2012 Legend Agriculture 8% Malting 6% Brewing 17% Packaging + end of life 31% Distribution 9% Cooling 29%
  7. 7. Sustainability is integrated SSSuuussstttaaaiiinnnaaabbbiiillliiitttyyy iiisss iiinnnttteeegggrrraaattteeeddd aaaaccccrrrroooossssssss oooouuuurrrr ssssuuuuppppppppllllyyyy cccchhhhaaaaiiiinnnn,,,, ffffrrrroooommmm bbbbaaaarrrrlllleeeeyyyy ttttoooo bbbbaaaarrrr 7
  8. 8. PPPPrrrrooootttteeeeccccttttiiiinnnngggg wwwwaaaatttteeeerrrr rrrreeeessssoooouuuurrrrcccceeeessss 8
  9. 9. SSSSmmmmaaaarrrrttttDDDDiiiissssppppeeeennnnsssseeee:::: lllleeeessssssss wwwwaaaasssstttteeee,,,, lllleeeessssssss eeeennnneeeerrrrggggyyyy &&&& tttthhhheeee ppppeeeerrrrffffeeeecccctttt cccchhhhiiiilllllllleeeedddd ppppiiiinnnntttt iiiinnnn aaaa GGGGrrrreeeeaaaatttt BBBBrrrriiiittttiiiisssshhhh PPPPuuuubbbb 9 • Revolutionised draught dispense • Engineering innovation unique to HEINEKEN UK • Identified dual waste & quality issue: – Up to 90% of energy to cool the cellar is waste, and 75% of water – Poor hygiene and cleaning standards & lack of expertise • SmartDispense: the solution: – Less frequent line cleaning saves the average pub around 12,000 pints of water – Reduces energy use by up to 90%
  10. 10. Sustainability: a commercial SSSuuussstttaaaiiinnnaaabbbiiillliiitttyyy::: aaa cccooommmmmmeeerrrccciiiaaalll ooooppppppppoooorrrrttttuuuunnnniiiittttyyyy • Critical that we work together with our customers and lessees across our entire supply chain • Paid-for line cleaning service introduces new revenue stream for HEINEKEN • Critical to sell in cost-saving for publicans as well as environmental and quality benefits • Differentiator for HEINEKEN in the marketplace: passion for quality 10
  11. 11. RRRReeeedddduuuucccciiiinnnngggg CCCCOOOO2 eeeemmmmiiiissssssssiiiioooonnnnssss 11
  12. 12. Tadcaster now home TTTaaadddcccaaasssttteeerrr nnnooowww hhhooommmeee ttttoooo llllaaaarrrrggggeeeesssstttt ssssoooollllaaaarrrr iiiinnnnssssttttaaaallllllllaaaattttiiiioooonnnn aaaatttt aaaannnnyyyy UUUUKKKK bbbbrrrreeeewwwweeeerrrryyyy • Investing in renewable energy key to achieving our 2020 target: reducing C02 emissions in production by 40% worldwide • 4,000 solar panels generating 876 megawatt hours (“MWh”) each year, enough to power 185 homes • Combined with biogas on site, 8% of site’s energy use will now come from renewable sources 12
  13. 13. SSSSoooouuuurrrrcccciiiinnnngggg ssssuuuussssttttaaaaiiiinnnnaaaabbbbllllyyyy 13
  14. 14. BBBBaaaaBBBBFFFF CCCCoooommmmmmmmiiiittttmmmmeeeennnntttt |||| RRRRaaaaiiiissssiiiinnnngggg FFFFaaaarrrrmmmmiiiinnnngggg SSSSttttaaaannnnddddaaaarrrrddddssss 14 Aim for sustainable sourcing of • 20% of barley • 40% of hops • 60% of apples Minimum 50% of main raw materials supplied 2222000011115555 2222000022220000 BBBBaaaasssseeeedddd oooonnnn MMMMaaaassssssss BBBBaaaallllaaaannnncccceeee PPPPrrrriiiinnnncccciiiipppplllleeee
  15. 15. Our global commitment: OOOuuurrr ggglllooobbbaaalll cccooommmmmmiiitttmmmeeennnttt::: 55550000%%%% ooooffff rrrraaaawwww mmmmaaaatttteeeerrrriiiiaaaallllssss ssssoooouuuurrrrcccceeeedddd ssssuuuussssttttaaaaiiiinnnnaaaabbbbllllyyyy bbbbyyyy 2222000022220000 15
  16. 16. Our Sustainable OOOuuurrr SSSuuussstttaaaiiinnnaaabbbllleee SSSSoooouuuurrrrcccciiiinnnngggg ssssttttrrrraaaatttteeeeggggyyyy 16
  17. 17. 17 DDDDeeeeffffiiiinnnniiiittttiiiioooonnnn |||| SSSSoooouuuurrrrcccceeeedddd ssssuuuussssttttaaaaiiiinnnnaaaabbbbllllyyyy - Generally accepted standard for non-segregated supply chains - Retain flexibility for appropriate quality blends - Keep input cost stable - Raise bar for overall farming rather than stimulate development of niche market RRRRaaaattttiiiioooonnnnaaaalllleeee HHHHEEEEIIIINNNNEEEEKKKKEEEENNNN CCCCllllaaaaiiiimmmm::::
  18. 18. DDDDeeeeffffiiiinnnniiiittttiiiioooonnnn |||| SSSSuuuussssttttaaaaiiiinnnnaaaabbbblllleeee VVVVoooolllluuuummmmeeee 18 “Any agricultural product in scope of the Sustainable Agriculture program, that has been: (1) cultivated in accordance with an approved Code of Practice and (2) has been allocated to HNK by our supplier, in accordance with the mass balance approach” Approved Codes of Practice SAI Principles & Practices -FSA Code of Practice 3rd party benchmark Volume contractually allocated to HNK in acc with mass balance approach
  19. 19. SAI Principles SSSAAAIII PPPrrriiinnnccciiipppllleeesss &&&& PPPPrrrraaaaccccttttiiiicccceeeessss ((((PPPP&&&&PPPP)))) |||| FFFFaaaarrrrmmmmeeeerrrr SSSSeeeellllffff AAAAsssssssseeeessssssssmmmmeeeennnntttt SOCIETY (PEOPLE) •Food Quality & Safety •Rural, Social, Economic conditions •Working Conditions •Training ENVIRONMENT (PLANET) •Soil treatment •Water usage and depletion avoidance •Biodiversity •Energy ECONOMY (PROFIT) •Farmers Income •Food Supply •Optimisation of Benefits •Diversification FARMING SYSTEMS •Site Selection and Management •Yield, Variety, Fertiliser •Planting Material •Crop Management 19 “Efficient production of safe, high quality agricultural products, in a way that protects and improves the natural environment, the social and economic conditions of farmers, their employees and local communities, and safeguards the health and welfare of all farmed species.”
  20. 20. • All of the barley we use for the beers we brew in the UK is grown in the UK • As of 2014, 100% of they barley we buy from the UK is now Red Tractor certified • In the UK, working with our partners, we want to take this commitment to sustainable supply chain to the next level 20 BBBBaaaarrrrlllleeeeyyyy |||| WWWWhhhhaaaatttt wwwweeee’’’’rrrreeee ddddooooiiiinnnngggg iiiinnnn tttthhhheeee UUUUKKKK
  21. 21. 21 AAAApppppppplllleeeessss |||| WWWWhhhhaaaatttt wwwweeee’’’’rrrreeee ddddooooiiiinnnngggg iiiinnnn tttthhhheeee UUUUKKKK • We use around 30% of the UK’s apples in our ciders • Worked with many of our apple farmers in Herefordshire for up to three generations
  22. 22. 22 AAAApppppppplllleeeessss |||| WWWWhhhhaaaatttt wwwweeee’’’’rrrreeee ddddooooiiiinnnngggg iiiinnnn tttthhhheeee UUUUKKKK • Orchard Management Programme provides farmers with platform to share best practice, advice and guidance amongst the apple farmer community, including on sustainability issues • Annual Golden Apple awards to celebrate examples of best practice • In 2014, we’ve trialled a self-assessment questionnaire based on SAI principles for our farmers to complete • Will be rolled out to meet our target to source 60% of bittersweet apples sustainably by crop year 2015
  23. 23. 23 The Proof of TTThhheee PPPrrroooooofff ooofff tttthhhheeee PPPPuuuuddddddddiiiinnnngggg............ |||| BBBBeeeesssstttt PPPPrrrraaaaccccttttiiiicccceeee Improved soil fertility prevents erosion, i.e. less risk of decreasing yield French Coopération (Arvalis affiliate): wildflower meadows stimulate biodiversity less risk of diseases 12% yield increase, £200/acre benefit as a result of compost as natural fertilizer SAI standards inspired the German hop farmers to define a common code for sustainable agriculture.
  24. 24. 24

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