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beverage industry Environmental Leader

Kellogg, PepsiCo Top Food and Beverage in Water Efficiency

beverage industry Environmental LeaderKellogg and PepsiCo lead food and beverage makers in water efficiency, according to a new report from Lux Research.

Lux analyzed 4,000 companies and focused on 18 that lead the consumer packaged goods (CPG) sector and reported sustainability numbers on variables such as water usage, energy consumption and waste generation.

Kellogg generated more than $1,200 of revenue per kiloliter (kL) of water used, compared with an average of $600/kL for all diversified food companies. Diversified beverage companies averaged under $400/kL, with PepsiCo ranking as the best in its class at about $600/kL.

Other key findings from the report:

  • Brewers lag behind other beverage makers. Compared to diversified beverage companies at $600/kL, makers of alcoholic beverages realized an even lower $250/kL, led by Heineken at over $300/kL. Different product classes inherently use different amounts of water, making reporting at the business unit or product level necessary for true comparisons.
  • Energy use is a vital metric. Both food and beverage companies average about $12,000 in revenue per megawatt hours (MWh) of electricity used. The best in class in this sector is J.M. Smucker, growing from about $14,000/MWh in 2010 to about $18,000/MWh in 2013, likely due to infrastructure improvements started in 2010.
  • Full risks remain unassessed. Most companies only report partial information on resource use, and may remain unaware of the full risks they face. For example, a beverage company with a water use ratio of 3:1 in its own operations may find its ratio ten times or more higher if it takes the entire supply chain into account. Because water is largely a localized resource — the value of a liter of water in California is different than in upstate New York — companies cannot quantify their resource risks unless they use accurate geospatial analytics.

Resource productivity is a critical metric for long-term performance and profitability, but most companies are working off too little information, Lux says. Food and beverage company have a long way to go in terms of efficiency of water use, according to a report by nonprofit advocacy group Ceres.

Photo credit: beverages on conveyor belt via Shutterstock

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