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U n i v e r s i t y o f C a p e T o w n , G r a d u a t e S c h o o l o f B u s i n e s s
MBA 2012
Engendering Sustainable Water Practices in Breweries:
Analysis of the SABMiller Newlands Brewery
Written by: Mark Kritzinger
Supervised by: Associate Professor Richard Chivaka
10 December 2012
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DECLARATION:
1. I know that plagiarism is wrong. Plagiarism is to use another’s work and
pretend that it is one’s own.
2. I have used the APA 6 Convention for citation and referencing. Each
contribution to, and quotation in, this essay from the work(s) of other people
has been attributed, and has been cited and referenced.
3. This essay is my own work.
4. I have not allowed, and will not allow, anyone to copy my work with the
intention of passing it off as his or her own work.
5. I acknowledge that copying someone else’s assignment or essay, or parts of
it, is wrong, and declare that this is my own work.
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ABSTRACT
The King III Report explains that “Sustainability is the primary moral and economic
imperative for the 21st century” (King Committee, 2009). Hence, sustainability and
sustainable business practices are becoming increasingly important in the future of
business not only in South Africa, but globally as well. The production of beer is
resource intensive, specifically with regard to the use of water, and with increasing
concern regarding the scarcity of fresh water,
Purpose: The purpose of this explorative research is to develop a conceptual
understanding of how sustainable initiatives pertaining to the use of water in
breweries are being driven, selected and implemented. The research has a number
of core focuses, the first being on where the pressures on sustainable practices were
coming from and how the targets were defined. The idea was to develop an
understanding of why companies were addressing sustainability issues, and how
they were communicating the initiatives throughout the organisation. The second
focus was to understand how the targets and initiatives were addressed at an
operational level. The goal in this regard was to generate an understanding where
decisions pertaining to the operational side of sustainable practices were made, how
projects were selected, and how these were filtered to the various departments and
key individuals. The third focus was to explore how the selected projects and
initiatives were measured and evaluated, exploring the administration of
accountability and incentives for performance.
Design/Methodology/Approach: The research has been inductive in nature, and
has explored the approaches taken for improving water management in breweries in
order to establish a conceptual framework of best practices for sustainable water
usage. The intention of this research was to understand how sustainable initiatives
are being driven within a large-scale commercial brewery. The research followed a
case study approach, focussing on a single aspect within an organisational setting.
The research took the form of participant observation in that sustainable
development meetings within the SAB Newlands Brewery were attended on a
regular basis for an extended period of time, with additional interviews held with key
stakeholders.
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Gaps: What are of key interest in this research are the accountability, and rewards
and repercussions for realising or missing targets at a departmental, operational, and
regional level. This potentially presents an incentive type scenario that could be
utilised to leverage departments to outperform their respective targets.
Findings: This research proposes that the three most important aspects for driving
and implementing sustainable development practices can be explained as: Culture
and Communication; Metering and Measurement; and Organisational
Implementation. In addition, it presents the importance of accountability, incentive
schemes, and accountability in leveraging motivation and driving sustainable
initiatives.
Research Limitations/Implications: The paper presents a relatively high level view
of additional findings, and further research could be pursued to understand the
effectiveness of incentives based on internal competition and performance based
incentives, as well as thorough understanding of target setting an operational level.
Practical Implications: The paper adds strength to the existing literature regarding
the implementation of sustainable initiatives. Additionally, it presents findings that
have not been researched in great depth relating to internal competition and target
setting, where internal competition presents an opportunity to leverage the possible
competitive nature of employees in driving sustainable development
Keywords: Sustainable development, Sustainability, SABMiller plc, Water, internal
competition, incentives, internal communication, knowledge sharing
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LIST OF FIGURES
Figure 1: Conceptual Framework for Continuous Source Reduction (Kitazawa & Sarkis, 2000) .............................................................................................................. 8
Figure 2: Flowchart for Water Minimisation Strategy (Glavič & Bogataj, 2011) ........ 15
Figure 3: A Focused Approach to Sustainable Development Management (SABMiller plc, 2012c) ................................................................................................................ 33
Figure 4: Sustainable Development Reporting Tool (SABMiller plc, 2012b) ............ 43
LIST OF TABLES
Table 1: Participant Job Titles & Years of Service ................................................... 27
Table 2: SABMiller plc - Sustainable Development Priorities (SABMiller plc, 2012c)32
Table 3: Sustainable Development Stairway Level Assessment Criteria (SABMiller plc, 2012c) ................................................................................................................ 42
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GLOSSARY OF TERMS
1. SD Sustainable Development
2. SAB South African Breweries (South Africa)
3. SABMiller plc South African Breweries Miller plc (Global)
4. SAM Sustainability Assessment Matrix
5. Dop System A payment system formally used in the South African wine industry
that compensated labour with a daily measure of cheap alcohol,
often resulting in addiction.
6. EMS Environmental Management Systems/Structures
7. UN United Nations
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AKNOWLEDGEMENTS
I would like to acknowledge the following people for their assistance and contribution
to this research report:
My primary contact at the SAB Newlands Brewery, Douglas February, for the time he
afforded me, for inviting me to the sustainable development meetings, and for
providing me with extensive data, and without whom this report would not have been
possible.
Greg Brouckaert, Dwight Cassie, Corrie Hattingh, Peter Hofmann, Jaco Kirstein,
Walter Louw, Robert Obree, and Andrea Shea, the members of the SAB Newlands
Brewery Sustainable Development team, who welcomed me into their weekly
meetings, and who were always helpful and willing to answer any questions that I
had.
Mr John Stenslunde for affording me an interview on short notice and providing me
with a wealth of information, and to Geraldine de Villiers for fitting me into his busy
schedule.
To Jean-Paul Renouprez for putting me in contact with key individuals at SAB, and
willingness to help the 2012 Full Time MBA class thought the year.
To my supervisor, Associate Professor Richard Chivaka, for his direction, insight and
assistance in making this research paper a reality.
Finally, to my parents, my sister, and my cousin for their guidance and motivation,
which encouraged me to take on the MBA, and their unwavering, support throughout
the year.
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TABLE OF CONTENTS
DECLARATION: ...................................................................................................................................... II
ABSTRACT ............................................................................................................................................ III
LIST OF FIGURES ................................................................................................................................. V
LIST OF TABLES ................................................................................................................................... V
GLOSSARY OF TERMS ....................................................................................................................... VI
AKNOWLEDGEMENTS ....................................................................................................................... VII
1 INTRODUCTION .............................................................................................................................. 1
1.1 RESEARCH AREA & PROBLEM ....................................................................................................... 2
1.1.1 Research Problem .............................................................................................................. 2
1.1.2 Background to the Research Problem ................................................................................ 2
1.1.3 Purpose of the Research .................................................................................................... 4
1.1.4 Significance of the researCh............................................................................................... 4
1.2 RESEARCH QUESTIONS AND SCOPE .............................................................................................. 5
1.2.1 Primary Research Questions .............................................................................................. 5
1.2.2 Research Assumptions ....................................................................................................... 5
1.2.3 Research Ethics .................................................................................................................. 5
2 LITERATURE REVIEW .................................................................................................................... 6
2.1 SUSTAINABILITY & SUSTAINABLE DEVELOPMENT ........................................................................... 6
2.2 DRIVING SUSTAINABILITY .............................................................................................................. 7
2.2.1 ISO – International organisation for Standardisation .......................................................... 7
2.2.2 UN: Millenium Development Goals & Global Compact .................................................... 10
2.2.3 The Acciona Case ............................................................................................................ 11
2.2.4 Interpreting & Implementing Sustainability ....................................................................... 12
2.3 SUSTAINABLE WATER USAGE ..................................................................................................... 13
2.3.1 Sustainabile Water Strategy ............................................................................................. 14
2.4 SUSTAINABILITY IN BREWERIES ................................................................................................... 16
2.4.1 Estimating the water balance............................................................................................ 17
2.4.2 Understanding and Optimising the System ...................................................................... 18
2.4.3 Water regeneration ........................................................................................................... 19
2.5 GAPS IN THE LITERATURE ........................................................................................................... 19
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2.6 CONCLUSION ............................................................................................................................. 20
3 RESEARCH METHODOLOGY ...................................................................................................... 21
3.1 APPROACH AND STRATEGY ........................................................................................................ 21
3.1.1 Approach ........................................................................................................................... 21
3.1.2 Strategy ............................................................................................................................. 22
3.1.3 Justification for the approach ............................................................................................ 23
3.2 RESEARCH DESIGN, DATA COLLECTION METHODS AND INSTRUMENTS .......................................... 24
3.2.1 Research Design .............................................................................................................. 24
3.2.2 Data Generation ............................................................................................................... 24
3.3 SAMPLING .................................................................................................................................. 25
3.4 DATA ANALYSIS METHODS ......................................................................................................... 25
3.5 RESEARCH CRITERIA .................................................................................................................. 26
3.5.1 Validity .............................................................................................................................. 26
3.5.2 Reliability ........................................................................................................................... 26
3.5.3 Limitations ......................................................................................................................... 26
4 RESEARCH FINDINGS, ANALYSIS, AND DISCUSSION ............................................................. 27
4.1 DRIVERS OF SUSTAINABILITY ...................................................................................................... 28
4.1.1 Striving for Sustainability .................................................................................................. 29
4.1.2 Newlands Brewery Culture ............................................................................................... 30
4.2 SABMILLER PLC’S APPROACH TO SUSTAINABILITY ....................................................................... 31
4.2.1 Sustainable Development Priorities .................................................................................. 31
4.2.2 Encouraging Competition ................................................................................................. 33
4.2.3 Internal Communication .................................................................................................... 34
4.3 TARGET SETTING ....................................................................................................................... 34
4.3.1 National Targets ............................................................................................................... 35
4.3.2 Brewery Targets ............................................................................................................... 35
4.4 OPERATIONAL DECISIONS ........................................................................................................... 36
4.4.1 Water Balance & Metering ................................................................................................ 36
4.4.2 Internal Consultants .......................................................................................................... 36
4.4.3 Sustainable Development Meetings ................................................................................. 37
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4.4.4 Opportunity Evaluation ..................................................................................................... 38
4.4.5 Initiative Selection ............................................................................................................. 39
4.4.6 Sustainability Budget ........................................................................................................ 39
4.4.7 Communication & implementation .................................................................................... 40
4.5 EVALUATION & MEASUREMENT ................................................................................................... 41
4.5.1 Project Evaluation ............................................................................................................. 41
4.5.2 Brewery evlauation & Incentives ...................................................................................... 41
4.5.3 Sustainability Assesment Matrix ....................................................................................... 42
4.6 COMPARATIVE ANALYSIS ............................................................................................................ 43
4.7 RESEARCH LIMITATIONS ............................................................................................................. 45
5 RESEARCH CONCLUSIONS ........................................................................................................ 46
5.1 KEY INSIGHTS ............................................................................................................................ 46
5.1.1 Sustainability Drivers ........................................................................................................ 47
5.1.2 Target Setting & Communication ...................................................................................... 48
5.1.3 Operational Decisions & Implementation ......................................................................... 48
5.1.4 Evaluation & Measurement ............................................................................................... 49
5.2 RESEARCH CONTRIBUTION ......................................................................................................... 49
5.3 FUTURE RESEARCH DIRECTION .................................................................................................. 50
BIBLIOGRAPHY ................................................................................................................................... 52
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1 INTRODUCTION
The King III Report explains that “Sustainability is the primary moral and economic
imperative for the 21st century” (King Committee, 2009). This excerpt from the full
statement highlights the importance of sustainability and sustainable business
practices in the future of business not only in South Africa, but globally as well.
Sustainable business practices are becoming more prominent and relevant as
businesses experience increasing pressures from governments, regulation, and
consumers.
The production of beer is resource intensive, specifically with regard to the use of
water. Beer is the fifth most consumed beverage in the world, and like all food and
beverage producers, brewers are very concerned with ensuring that quality remains
unaffected whilst at the same time striving for cost effectiveness (Fillaudeau,
Blanpain-Avet, & Daufin, 2006). Wastewater management and treatment options
present real solutions to improving cost effectiveness whilst at the same time
reducing the environmental impact. Fillaudeau et al (2006) explain, “beer alternately
goes through three chemical and biochemical reactions (mashing, boiling,
fermentation and maturation) and three solid-liquid separations (wort separation,
wort clarification and rough beer clarification). Consequently water consumption,
wastewater and solid-liquid separation constitute real economic opportunities for
improvements in brewing” (p. 463). There is substantial wastewater discharged
throughout the brewing process, and a number of commercial breweries have
undertaken to reduce the amount of water used, reduce the quantity of effluent
emitted, and find sustainable solutions for the by-products produced.
This research sets out to explore the process of how sustainable development is
viewed and how sustainable business practices are prescribed and implemented in a
local South African brewery. The research has a number of core focuses, the first
being on where the pressures on sustainable practices were coming from and how
the targets were defined. The idea was to develop an understanding of why
companies were addressing sustainability issues, and how they were communicating
the initiatives throughout the organisation. The second focus was to understand how
the targets and initiatives were addressed at an operational level. The goal in this
regard was to generate an understanding where decisions pertaining to the
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operational side of sustainable practices were made, how projects were selected,
and how these were filtered to the various departments and key individuals. It is
believed that understanding the business decisions behind project selection and
implementation was imperative to the overall strategic plan. The third focus was to
explore how the selected projects and initiatives were measured and evaluated.
Accountability plays an important role with regard to project implementation, and this
research set out to explore how accountability was administered, and what the
outcomes were where targets were met or missed.
The rest of this paper is organised as follows. The research area and problem are
discussed, highlighting the background to the problem, the purpose of the research,
and its significance. Relevant literature is reviewed, focussing on sustainability in a
broad sense as well as the drivers and implementation plans, followed by issues
around sustainable water use. The issue of sustainability in breweries will be
discussed, and finally the gaps and problems with the literature will be identified and
considered. The research findings will be explained, assessing the important drivers
of sustainability within the SABMiller group, the operational aspects that have made
sustainability a continuing success within the Newlands Brewery, as well as the
cultural engagement and incentives that drive employees to deliver on these targets
and goals. The limitations to the research will be discussed before concluding with
highlights of the important aspects of the research findings.
1.1 RESEARCH AREA & PROBLEM
1.1.1 RESEARCH PROBLEM
As global pressure on the sustainable use of resources grows, companies are
required to improve their operational and resource efficiency to ensure future
generations are able to benefit from these resources. This research was aimed at to
develop a broad conceptual framework of how sustainable development initiatives
are driven and implemented within a large commercial brewery.
1.1.2 BACKGROUND TO THE RESEARCH PROBLEM
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Sustainable development practices are becoming more important in many facets of
business, with the King iii report in South Africa requiring all Johannesburg Stock
Exchange (JSE) listed companies to produce an integrated sustainability report
(Hanks, 2011).
Fresh water scarcity is a major global concern. With less the 3% of the earths water
supply being fresh, the rest being un-potable sea water, and a substantial portion of
this 3% being frozen in the polar ice caps, only 0.5% of the global water supply is
available for the ecosystem (Lambooy, 2011). In South Africa, the demand for water
is expected to increase significantly over the next 30 years, coupled with this, we
face the very likely scenario of a decline in water supply (Water Strategic Partners
Network & Nepad Business Foundation, n.d.). The scarcity of water is particularly
prevalent in Sub-Saharan Africa, where regular periods of drought means that every
drop of water is sacred (Simate et al., 2011).
It is estimated that for every litre of beer produced, between three and ten litres of
water is used. The beer brewing process produces significant amounts of
wastewater effluent and solid waste that cannot be disposed of or reused with out
being treated, often a costly exercise. Although not all wastewater generated from
the brewing process contains effluents that contribute to water pollution, the strain
placed on the environment as well as the treatment of this already scarce resource is
quite significant (Simate et al., 2011).
SAB’s head of Sustainable Development, Andre Fourie explains, "In many parts of
the world, the impact of climate change is already visible,” “Responsible and
proactive companies must therefore be thinking about how to adapt to these climate
impacts. In South Africa, water scarcity is one of the most critical impacts" (World of
Beer, 2012).
A significant portion of the literature available focuses on the scientific and biological
aspects of wastewater management, and explores the various treatment methods
and conversion methods for converting wastewater into energy to feed back into the
brewery energy grid. These treatment methods are key areas of concern and very
relevant to this topic, however in addition to this, this paper will focus on what
managerial and operational practices influence the sustainable use of water, how
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these practices are implemented and evaluated, and what improvements can be
made to promote more sustainable water use in the brewing process.
1.1.3 PURPOSE OF THE RESEARCH
The purpose of this explorative research is to develop a conceptual framework of
how sustainable initiatives pertaining to the use of water in breweries are being
driven, selected and implemented. There are a number of focus areas, specifically:
who drives strategic sustainable decisions; how these decisions are translated into
requirements and targets; how these requirements and targets are communicated
and translated into operational projects; how these projects are implemented; and
how the results of these projects are evaluated and repercussions and rewards
associated with them.
1.1.4 SIGNIFICANCE OF THE RESEARCH
This research essentially has a number of useful components for breweries with
regard to the triple bottom line. Firstly, this research can assist in understanding how
to effectively drive sustainable initiatives and how to measure their impact and
payback. Secondly, this research can assist in understanding some of the key areas
of concern with regards to wastewater management and present some initiatives that
have been effective in this area. This would aid breweries in improving their
operational processes to promote sustainable resource management. Thirdly,
efficiently maximising resource use could potentially reduce the costs of these
resources, which would increase the profitability of the brewery. Consideration would
need to be given to the costs and pay back periods associated with the various
treatment options available to understand the impact that this would have on
profitability.
In addition to economic efficiency, there is “global competition” between breweries
regarding the water to beer ratio and it is often seen as a measurement tool
(Fillaudeau et al., 2006; Tokos & Novak Pintarič, 2009)
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1.2 RESEARCH QUESTIONS AND SCOPE
1.2.1 PRIMARY RESEARCH QUESTIONS
This paper is focussed on understanding the process of delivering strategic
sustainable decisions within an organisation. The specific questions that are
addressed in this paper are:
What are the drivers for sustainable development practices?
How are targets defined and communicated?
How are targets addressed at an operational level, and how are these
selected and implemented?
How are the projects evaluated and measured, and the rewards or
consequences relating to target achievement.
These questions have been assessed in a case study format with regard to a
commercial brewery in Cape Town, South Africa.
1.2.2 RESEARCH ASSUMPTIONS
This research was based on the assumption that access to the SAB Newlands
Brewery, on which the primary research is to be conducted, was granted in full.
These requirements were verbally agreed to prior to the start of the research, and a
written agreement was signed. SAB Newlands afforded access to information and
data that was over and above what was agreed upon, resulting in a considerable
amount of useful qualitative and quantitative data.
1.2.3 RESEARCH ETHICS
Diener and Grandal (1978) provide a layout of where ethical principles are
compromised: where there is harm to participants, where there is lack of informed
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consent, where there is an invasion of privacy, and where deception is involved (as
cited in Bryman & Bell, 2011). To avoid transgressions in this area, a non-disclosure
agreement was drawn up with the subject of the case study, SAB Newlands
Brewery, and signed by both parties. In addition to this, all stakeholders involved
have been afforded the opportunity to read the final report to ensure that any
information of a sensitive and confidential nature is not included. With regard to the
interviews and observations, consent to use the data has been received in the
appropriate manor, and the option to stay anonymous has been noted for all
respondents and stakeholders.
2 LITERATURE REVIEW
2.1 SUSTAINABILITY & SUSTAINABLE DEVELOPMENT
There is often confusion as to what is meant by the terms sustainability and
sustainable development. The Oxford Dictionary defines sustainable as “conserving
an ecological balance by avoiding depletion of natural resources” (Oxford
Dictionaries, 2012). However academics argue that sustainability requires that we
meet three interlocking goals, specifically environmental, economic, and social goals,
and failure to meet one of these goals, potentially threatens the others. (King, 2008).
Hopwood, Mellor, and O’Brein (2005) explain the concept of sustainable
development as “the result of the growing awareness of the global links between
mounting environmental problems, socio-economic issues to do with poverty and
inequality and concerns about a healthy future for humanity” (p. 39). Mary King
explains that “the economics of sustainability must find a way to raise the standards
of living of a large number of people while reducing the negative environmental
consequences of economic activity” (King, 2008, p. 28).
Sustainable development can be explained by the regularly cited definition of the
1987 Brundtlandt Commission for the World Commission on Environment and
Development (WCED) which states “sustainable development is development which
meets the needs of the present without compromising the ability of future
generations to meet their own needs” (King, 2008, p. 28). Economists David Pearce
and Edward Barbier define economic sustainability as “ensuring that future
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generations have at least the same potential economic opportunities to achieve
welfare as the current generation” (as cited in King, 2008, p. 29). Sustainable
development has many meanings, Hopwood et al further explain the concept of
sustainable development as “an attempt to combine growing concerns about a range
of environmental issues with socio-economic issues” (Hopwood et al., 2005, p. 38).
The relationship between the human race and the environment has typically been an
exploitative one, preserving only a few wilderness areas for our pleasure. As we
have evolved, ploughing through earth’s limited resources, the realisation that people
require these depleting resources has become more important. Similarly, the
management of natural resources has become more important to “ensure maximum
long-term use” (Hopwood et al., 2005, p. 39).
2.2 DRIVING SUSTAINABILITY
2.2.1 ISO – INTERNATIONAL ORGANISATION FOR STANDARDISATION
The ISO is the world largest developer of voluntary International Standards aimed at
providing benefits for business, government and society. As of January 2012, the
ISO comprised of a network of national standards institutes from 163 countries. ISO
provides guidelines to ensure that vital features such as quality, ecology, safety,
reliability, compatibility, interoperability, efficiency and effectiveness are met whilst at
the same time, ensuring economical costs. ISO can also be considered a knowledge
sharing hub through which trade can be facilitated, technological advances
circulated, and good management practices shared. ISO provides a “platform for
developing practical tools through common understanding and cooperation with all
stakeholders on board ” (ISO Central Secretariat, 2012, p. 2). Leveraging its vast
network, ISO brings together global thought leaders to develop consensus-based
frameworks, guidelines, and solutions for good management practice, the
management of resources, risk assessment, metrics and infrastructure, all of which
can be shared between the developed and developing world (ISO Central
Secretariat, 2012).
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The value of ISO standards is reliant on multi-stakeholder input, leveraging and
consolidating input from industry, government, academia, international organisations,
and non-governmental organisations (ISO Central Secretariat, 2012).
ISO 14001 is the standard for Environmental Management Systems (EMS), and has
been designed in such a way that companies can identify and define important EMS
elements for continuous source reduction. In a study done by Kitazawa and Sarkis
(2000), the identify that adopting the path towards continuous source reduction using
the ISO guidelines requires a cultural change. Using information gathered through
three case studies, they highlight one critical point: employee empowerment; their
willingness to make suggestions for improvement, and management’s efforts to
create employee participation in decision making are crucial elements in managing
continuous source reduction programs.
Continuous source reduction requires that companies take a proactive stance
towards EMS, and make evaluations on the current framework of their EMS
structures, and find ways to improve them. The ISO 14001 standards provide means
for companies to self evaluate themselves, and can be used to develop specific
goals according to the requirements and their resource inputs.
Kitazawa and Sarkis (2000) introduce a conceptual framework of how ISO14001
supports continuous source reduction (See Figure 1: Conceptual Framework for
Continuous Source Reduction (Kitazawa & Sarkis, 2000)). There are a number of
key insights from the below figure: Firstly, that established objectives and
measureable goals are determined from the outset, and that individuals and
departments have defined roles and responsibilities. Secondly, to achieve the afore
mentioned goals and objectives, a cultural change needs to occur that empowers
employees to take responsibility and action, as well as enabling cross-functional
communication, feedback, and knowledge sharing.
Figure 1: Conceptual Framework for Continuous Source Reduction (Kitazawa & Sarkis, 2000)
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Operational activities that contribute to continuous source reduction are categorised
into five groups: input change, operational improvement, process change, product
reformulation, and inventory control. All of these require strategic and operational
planning to be effective, and methods of achieving continuous source reduction are
programs such as design for disassembly, elimination of non-value adding activities,
and minimisation of waste (Kitazawa & Sarkis, 2000).
The need for structural change is necessary to support the implementation of
continuous source reduction programs to enhance employee participation and cross-
functional integration across the organisation. All operational activities implemented
to drive continuous source reduction require improved awareness and knowledge,
and understanding of the systems and processes, and possible skills improvements.
Thus, organisations should carefully plan and design their organisational
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development programs to ensure they gain momentum going forward (Kitazawa &
Sarkis, 2000).
Employee empowerment and team-based approaches are useful in the process of
idea generation. Collective decision-making by a number of individuals with expert or
thorough knowledge of the systems and processes will have explicit knowledge of
where waste is generated, as well as opportunities to minimise this waste. Through
open communication and cross-functional integration, resource use can be reduced
and used for in the most efficient and effective manner without having adverse
effects in another area of the operation. Measurement plays a key role in terms of
impact assessment and the management of progress relative to the goal of an
organisations (Kitazawa & Sarkis, 2000).
The ISO 14001 requirements follow a method called the PDCA (Plan-Do-Check-Act)
Cycle, where Plan is where the organisation plans a change aimed at some form of
improvement, Do is the implementation of the change, Check is the evaluation of the
results, and Act is the institutionalisation of the change. The ISO 14001 requirements
not only provide a platform for self-evaluation, they also provide an opportunity for
organisations to gain competitive advantage and meet customers sustainability
pressures (Kitazawa & Sarkis, 2000).
2.2.2 UN: MILLENIUM DEVELOPMENT GOALS & GLOBAL COMPACT
The United Nations Millennium Development Goals (MDG) are targets agreed to by
all the worlds countries to address issues like the spread of HIV, enabling universal
education, and specific to this research, environmental sustainability. MDG Target 7,
the target to ensure environmental sustainability, has four key focus areas: 7A is to
integrate principles of sustainable development into country policies and programs I
order to reduce the impact and reverse the loss of environmental resources; 7B is to
reduce the rate and loss of biodiversity, which refers to deforestation, carbon
emissions, and specific to this research, the proportion of total water resources used;
7C is to halve the proportion of the worlds population without access to safe drinking
water and basic sanitation; and 7D is to achieve a significant reduction in the
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proportion of the population living in slums (United Nations Development
Programme, 2007).
The United Nations Global Compact is a “strategic policy initiative for businesses
that are committed to aligning their operations and strategies with ten universally
accepted principles in the areas of human rights, labour, environment and anti-
corruption” (United Nations, 2011, Para. 1). The Global Compact initiative is
designed so that businesses, as a primary driver for globalisation, aid markets,
technology, commerce and finance evolve in a manner that benefit economies and
societies globally. Highlighting the social, political, and economical challenges faced
by businesses globally, the UN Global Compact advocates the need for companies
to collaborate with government, civil society, labour, and the UN to address issues of
corporate responsibility, and it has become the largest voluntary initiative in the world
in this arena. It is a “practical framework for the development, implementation, and
disclosure of sustainability policies and practices”, and it offers all participants a
variety of work streams, management tools, and resources to advance sustainable
business models and markets (United Nations, 2011, Para. 4). There are two main
objectives: Firstly, to mainstream the ten principles in business activities around the
world, and secondly, to catalyse actions in support of broader UN goals, such as the
MDG’s. The ten principles fall into four categories: human rights, labour,
environment, and corruption. The principles that fall under the Environmental
category and the most pertinent to this research, and there are three such principles:
businesses should support a precautionary approach to environmental challenges,
initiatives supporting promoting greater environmental responsibility should be
promoted, and the development and diffusion of environmentally friendly
technologies should be encouraged (United Nations, 2011).
2.2.3 THE ACCIONA CASE
One could look at Acciona, a global infrastructure and renewable energy company,
take note of the success they have had in addressing social and environmental
concerns, and use their strategy of addressing sustainability as a blue print for
business. In 2004, CEO José Manuel Entrecanales took the stance that the only way
forward for Acciona to maintain their position as an industry leader in the long term,
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was to focus its strategy and culture on sustainability (Arenas, Fosse, & Murphy,
2011).
Acciona took an integrative approach to sustainability, creating a new area within the
organisation called the General Direction of Innovation & Sustainability, which
integrated Sustainability, Innovation, Quality, R&D and Regulation. The company
also set up a sustainability committee to supervise policy, objectives, and plans
within the sustainability and corporate social responsibility areas (Arenas et al.,
2011).
It is evident from the case studies done on Acciona, that communication played a
key role in their success. Communication to all stakeholders was initiated: honestly
engaging with customers and avoiding unrealistic claims about their products;
various social campaigns communicating the position and values of the brand;
addressing industry groups about relevant sustainability topics; and sponsoring
events to create awareness of key issues. Measurement also played a significant
role in that regular data and tracking allowed continuous monitoring of keys areas
(Strategic Direction, 2012).
2.2.4 INTERPRETING & IMPLEMENTING SUSTAINABILITY
According to Mysen, companies interpret sustainability by the value systems
entrenched in those companies, the mission and vision of those companies, as well
as how they influence, and are influenced by, external factors such as political
environment and market behaviour. Mysen cites Svensson and Wood (2008)
explaining that they “link driving forces, such as the power of the media, lobby
groups, government legislation, and institutional responsibilities, to the development
of organizational values, norms and beliefs, that in turn affect how management,
staff and other stakeholders practice their businesses” (p. 504). Mysen also cites
ethics as a driver for sustainability, and that values, norms, and beliefs appear to be
a core construct of company culture (2012).
Derek Crews (2010) claims that sustainability is “creating a permanent shift in the
very nature of business”, and explains that there are five leadership challenges when
it comes to implementing sustainability. The first challenge is stakeholder
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engagement, which he explains will always have conflicting demands when trying to
integrate the three pillars of people, profits, and planet. However, he presents that
the challenge here is to “think in terms of mutually supporting gains” (Crews, 2010, p.
2). He reiterates that a symbiotic strategy for sustainability requires leaders to
“integrate the needs and interests of all stakeholders”, and not satisfy them through
trade-offs.
The second challenge is ensuring that a cultural change is sustained, as
organisations often go though changes that employees feel are fads, and thus do not
take serious heed towards them. Communication of the purpose, reasons, and value
of the change is imperative to ensure that driving sustainability is embraced.
The third challenge is for leaders to take a more holistic and organic stance towards
business decisions. Crews explains, “The modern business environment is
characterized by increasing global integration, connectivity, and complexity, which
requires more holistic and organic leadership strategies” and that the leadership
challenge “is for business leaders to recognize and accept a new reality in which
easy answers, quick fixes, and magic bullets are difficult to find” (Crews, 2010, p. 3).
The fourth challenge is that traditional management strategies are no longer
adequate to address organisational change when a holistic approach to a complex
environment is taken. Organisational change requires learning from everyone within
that organisation, and the notion that one individual can do the learning for the entire
organisation is not applicable. Organisational change with regard to sustainability
requires buy-in from every individual in the organisation; individuals need to feel
engaged, involved, and accountable for the initiatives being taken. Additionally,
every level of leadership needs to be addressed by providing a conceptual
understanding and merits of the initiatives that are being driven.
The fifth leadership challenge is ensuring that measurement and reporting are done
in such a manner that the strategies for implementing sustainability initiatives are
appropriately reported based on what will be effective within the organisation.
2.3 SUSTAINABLE WATER USAGE
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2.3.1 SUSTAINABILE WATER STRATEGY
Glavič and Bogataj (2011) highlight two of the many reasons contributing to the
growing scarcity of water. They explain that earth has a constant supply of water,
and that the growing population and industrial pollution are placing more and more
strain on it. Industrial pollution is a result of processes discharging water with
contaminants without the necessary, and often expensive, treatment. Hence there is
a need to manage and minimise water use to ensure sufficient volume and quality for
future generations. Glavič and Bogataj explain that the key to good water
management practice is ensuring that all usage is accounted for, which requires the
collection of process data through metering and constant monitoring. Tracking the
flow rate of inlet and discharge streams, assessing contamination levels, and
assessing process failures and leakages, are operational practices that are
necessary for monitoring this system.
They present a strategy (See Figure 2: Flowchart for Water Minimisation Strategy
(Glavič & Bogataj, 2011)) for minimising water usage by focussing on heuristic rules
and systematic methodologies.
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Figure 2: Flowchart for Water Minimisation Strategy (Glavič & Bogataj, 2011)
The key insight from the above figure is that there are two approaches two water
minimisation, the heuristic approach and the systematic approach. Heuristic rules,
they explain, are obtained through experience, experiments, and through testing and
analysis of data. Essentially, the heuristic approach entails a trial and error process
of figuring out the most efficient practices and processes. They use the example of
multistage washing operations, where water of a lower quality, cycled from another
process, can be used for processes that do not require the highest quality water. In
terms of systematic methodologies, they highlight the water pinch method, which can
be used to determine the minimal amount of water required in an installation to
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ensure that all contaminants from that process are removed, provided a base
contamination load is given. “The combination of all these minimal water quantities,
effluent characteristics and maximum allowed contamination loads for all processes
in the plant then determines the overall minimal water use” (Van der Bruggen &
Braeken, 2006, p. 180).
Energy also plays a role in water usage in that many processes require water for
heating and cooling to meet process-operating conditions.
2.4 SUSTAINABILITY IN BREWERIES
As the world becomes more aware of the limits to the resources that it is so highly
dependent on, the rules and requirements for using these resources become more
important and more stringent. As Van der Bruggen and Braeken state in their 2006
paper The challenge of zero discharge: From water balance to regeneration,
“Wastewater treatment is traditionally considered a separate part of an industrial
activity, hardly connected to the production units themselves. Scarcity of water and
energy, and legal requirements for discharge of waste and wastewater will force the
industry to change this approach to a more integrated concept of connecting the
residual output (in terms of waste, wastewater and energy loss) to the input (in terms
of materials and energy)” (Van der Bruggen & Braeken, 2006, p. 177).
However, the consumption of water in breweries is more than just an economic
consideration, it is also a tool that is commonly used to measure process
performance against other breweries (Fillaudeau et al., 2006). This healthy
competition potentially encourages process engineers and engineering managers
employed in commercial breweries to explore ways of improving the methods of
reusing and recycling wastewater. Additionally, global competition and environmental
regulations provide motivation for companies to increase their efficiency and
competitiveness, as well as reduce their environmental impact contribution (Tokos,
2012).
Discharging wastewater is often not as simple as dumping it into municipal sewage
systems, wastewater often requires extensive treatment before it can be discharged
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and in an industry that is facing increasing costs for wastewater discharge and
pressures to become more sustainable, recycling and reusing wastewater presents
an attractive option. There are also penalties for non-standard effluent discharges,
and these costs contribute significantly to the overall operations cost of the plants
(Statyukha, Kvitka, Dzhygyrey, & Jeżowski, 2008). In addition to this, there are a
number of benefits for breweries using recycled wastewater, as explained by Van
der Bruggen et al, “Three advantages are to be taken into account: (1) recycled
water is a supplementary and reliable source of fresh water, which can add to
existing sources or replace them; (2) the net volume of water consumed decreases
drastically; (3) the volume of wastewater to be discharged (and, consequently, also
costs and taxes) decreases; permits are no longer impediments for the company’s
expansion” (Van der Bruggen & Braeken, 2006, p. 178).
2.4.1 ESTIMATING THE WATER BALANCE
Estimating the water balance is a relatively simple process and can be done by
doing a preliminary survey of existing data and making an assessment of the major
gaps in the available information before making a final decision on how detailed the
water balance is required to be. Questions that should be asked when establishing
the water balance include:
What is main source of water?
How much energy is consumed bringing it in?
Is it supplemented by municipal tap water?
What processes does it go through before it can be used in the brewing
process? Does it need to be Chlorinated (type 1), Demineralised (type 2), or
sent through an ultra-filter using a carbon column (type 3)?
Do the water meters installed provide accurate information?
Can all water be accounted for?
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Referring to a medium sized brewery in Belgium, Van der Burggen et al (2006) found
that “on a weekly basis, only 3960 m³ could be accounted for on a total influent
volume of 5270 m³, i.e. 25% of all incoming water is not accounted for. A loss in the
water balance of more than 10% indicates that water consumption is not sufficiently
under control” (p. 179).
2.4.2 UNDERSTANDING AND OPTIMISING THE SYSTEM
Understanding where wastage occurs is the first step in determining the path forward
for improvements that could be implemented in the brewing process. The split of
total waster consumption is commonly assumed as two thirds being used in the
brewing process, and one third being used in the cleaning operations. The most
common waste products can be divided into four groups, spent grains, Kieselguhr
(diatomaceous earth) sludge, yeast surplus and waste labels. Spent grains are often
sold to agricultural feed manufacturers and used as livestock feed. Surplus yeast,
collected from the base of conical fermenters, is also commonly sold to feed
manufacturers for use in livestock feeds as well as for use in spreads such as
Marmite. The recycling and disposal of Kieselguhr sludge presents significant
challenges because of its pollutant effect, and the World Health Organisation
considers it hazardous waste. Coupled with this, diatomaceous earth consumption
and sludge disposal are major costs in filtration process. The disposal of waste
labels is also costly due to the fact that they are not simple paper labels, but wet-
strength papers infused with caustic solution. (Fillaudeau et al., 2006).
There are a number of opportunities to reduce the overall amount of water used and
waste water generated in breweries, specifically by developing improved water and
wastewater management systems, through recovery and reuse of reduced quality
water, and the partial on-site treatment of wastewater. (Reed & Henderson, 1999)
Van der Bruggen et al outline a process of optimising the efficient use of water
resources. The first step is to investigate the current water balance to compare how
much water is drawn into the system compared to what is expelled, and to see if
there are any losses that cannot be accounted for. The second step involves the
optimisation of the water consuming processes, this is done by combining and
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cycling processes to reuse water as much as possible for processes that do not
necessarily require the highest quality water. Regenerating partial waste streams
and reintroducing these streams into various process cycles can assist in optimising
water-consuming processes. The third and final step in the development of a
concept for optimised processes (Van der Bruggen & Braeken, 2006).
2.4.3 WATER REGENERATION
The brewing of beer is as particular as any other food production process,
particularly with regard to microbiological safety, and there are special regulations
and rules about what materials may come into contact with the product. It should be
noted in this section that standard filtered water is not considered a viable input for
the actual brewing process due to health and safety risks caused by contamination,
as well as the fact that it needs to meet standard drinking water requirements prior to
its use. This water can however be used in pre-wash routines, rinsing crates, bottles,
and vehicles. However, if the water is filtered using an exceptionally fine membrane
with sufficient ion rejection, it is possible to use that water in the brewing process.
Nonetheless, there are also physiological considerations that should be taken into
account that present barriers to consumers when they learn that regenerated water
is used in the brewing process as this could potentially harm the reputation of the
brand (Simate et al., 2011; Van der Bruggen & Braeken, 2006).
2.5 GAPS IN THE LITERATURE
Sustainability is not a necessarily new topic, but as pressure from external
stakeholders intensifies, and policy and regulation become more stringent and force
organisations to be more accountable, the necessity for driving sustainable initiatives
becomes more important.
There is an abundance of literature on the technical operational improvements that
can be made in breweries; most of this literature would only be relevant to process
and systems engineers, and not necessarily to managers and executives.
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Nonetheless, this technical literature does provide insight into what projects and
initiatives can be presented and used to strive towards the targets set.
As highlighted in this literature review, there is work on the challenges that
manager’s face when driving sustainability and possible methods of mitigating these,
as well as strategies for addressing and implementing sustainable initiatives.
The literature does not cover the process of defining targets and communicating
them throughout organisations. Likewise, it does not cover the processes used to
present and assess business cases and how projects and initiatives are selected
from these business cases.
What are of key interest in this research are the accountability, and rewards and
repercussions for realising or missing targets at a departmental, operational, and
regional level. This potentially presents an incentive type scenario that could be
utilised to leverage departments to outperform their respective targets.
Hence, this paper will address the areas of target setting at all levels, the
implementation of sustainable practices at an operational level, the assessment of
implemented projects, and the rewards and repercussions associated with
evaluation and targets.
2.6 CONCLUSION
The literature reviewed has provided useful insights into the challenges faced by
organisations in addressing sustainability. The Acciona case presents a framework
of how the concept of sustainability can be integrated into the heart of corporate
strategy. It has looked at the challenges that managers and executives face when
implementing sustainable strategies, as well as brief outlines of how these and be
mitigated. This review addresses the operational processes of measurement and
optimisation of water usage. This plays an important role as in driving sustainable
water initiatives as continuous monitoring and continual internal reporting ensure that
these initiatives are looked at regularly and in a serious light. Van der Bruggen and
Braeken (2006) outline a conceptual framework of understanding water usage and
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optimising water systems in breweries, as well as some insight into possible
regeneration techniques.
The UN Development Goals and Global Compact present principles and target areas
for businesses to address with regard to corporate responsibility, and provide
recognised policy frameworks, tools and resources, as well as a platform for
knowledge sharing and diffusion of information.
The International Organisation of Standardisation, specifically ISO 14001, addresses
areas specific to environmental management systems, and similarly provides
frameworks, best practices, and resources for aiding such initiatives.
Striving towards sustainability in breweries requires two fundamental components:
firstly, organisations need to be fully engaged in the practices and principles, which
requires a cultural shift and understanding, as well as clear and effective
communication between departments and employees at all levels. Secondly, and
specifically but not limited to water, continuous and thorough measurement and
metering needs to take place. Understanding what the water balance is, how water
regeneration can be utilised effectively, and tracking the improvement of initiatives at
all the points of use is vital to ensure that the projects are effective and indeed
making a significant difference.
Using the literature reviewed and the data gathered through the research process,
this report will address some of the gaps that have been identified and present a
brief conceptual framework of how these areas are being addressed within the SAB
Newlands Brewery.
3 RESEARCH METHODOLOGY
3.1 APPROACH AND STRATEGY
3.1.1 APPROACH
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The research has been inductive in nature, and has explored the approaches taken
for improving water management in breweries in order to establish a conceptual
framework of best practices for sustainable water usage. The intention of this
research was to understand how sustainable initiatives are being driven within a
large-scale commercial brewery. The research followed a case study approach in
that this research was focused on a single aspect within an organisational setting
(Bryman & Bell, 2011).
The research took the form of participant observation in that sustainable
development meetings within the SAB Newlands brewery were attended on a regular
basis for an extended period of time. Bryman and Bell explain that participant
observation is where the researcher “immerses him- or herself in a social setting for
an extended period of time, observing behaviour, listening to what is said in
conversations both between others and with the fieldworker, and asking questions”
(2011, p. 717)
The research problem in question relates to real issues faced by all breweries as
they all rely on water consumption in their production process. This research
involved engagement with key stakeholders in the case study brewery through
observation as well as interviews with key individuals. One of the limitations to this
research was the availability of commercial breweries in Cape Town, South Africa;
therefore this research took on a case study approach, using inductive theory to
provide a broad conceptual framework that can be applied in alternative systems.
3.1.2 STRATEGY
Although the majority of this research has been inductive, the research used a
combination of qualitative and quantitative analysis.
3.1.2.1 QUANTITATIVE
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Qualitative data plays a significant role in this research because comparisons
between processes need to be drawn on to establish their relevance and
contribution to the final discharge figure. Many of the processes provide qualitative
data such as litres of water used per process, litres of wastewater discharged per
litre inputted, as well as water type (type 1, 2, or3). Data was obtained through the
in-house measurement systems, and can be considered reliable.
3.1.2.2 QUALITATIVE
The qualitative aspect of this research involved observation of weekly sustainable
development meetings at the SAB Newlands Brewery. These meetings are
essentially focus groups that discuss the opportunities for possible improvements in
the brewing process, as well as assess the success of prior projects. Through this
qualitative research, the management practices for addressing sustainable
development within the context of SAB Newlands Brewery have been observed. In
addition to this, a number of key stakeholders relating to the overall management of
the brewery were interviewed. These interviews were focused on establishing the
core drivers of sustainability within the organisation, the role the corporate culture
plays in achieving sustainable development goals, and the evaluation and
measurement of targets and performance based incentives.
3.1.3 JUSTIFICATION FOR THE APPROACH
The approach taken for this research stems from the fact that the access to
commercial breweries is limited with regard to the researchers location. For this
reason, participatory action research and the use of a case study approach
presented the most appropriate and viable option.
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3.2 RESEARCH DESIGN, DATA COLLECTION METHODS AND
INSTRUMENTS
3.2.1 RESEARCH DESIGN
The research design was centred on a single location case study approach.
According to Stake (1995), “case study research is concerned with the complexity
and particular nature of the case in question” (as cited in Bryman & Bell, 2011, p.
59). Due to the limited accessibility to commercial breweries, the case study
approach seems appropriate and involved an “intensive examination of the setting”
(Bryman & Bell, 2011). They continue to explain:
“There is a tendency to associate case studies with qualitative research, but such an
identification is not appropriate. It is certainly true that exponents of the case study
design often favour qualitative methods such as participant observation and
unstructured interviewing, because these methods are viewed as particularly helpful
in the generation of an intensive, detailed examination of a case” (2011, p. 60)
Hence, this research involved qualitative and qualitative analysis.
3.2.2 DATA GENERATION
The research information and data collection was gathered using a combination of a
comparative case study analysis and the use of semi-structured interviews and focus
groups.
Case study information was obtained through interaction with a large commercial
brewery in Cape Town using structured visual observation, focus groups, and semi-
structured interviews with various stakeholders.
Visual observation occurred through attending weekly sustainable development
meetings with the sustainable development team, and observing the orders of
business, processed, and methods utilised by the team and the individuals in
attendance.
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3.3 SAMPLING
This research required purposive sampling, as the cases involved should not be
chosen on a random basis, but rather in a strategic way that ensures the cases are
relevant to the research at hand (Bryman & Bell, 2011). The facility, the SAB
Newlands Brewery, was selected based on its relevance to the research. SAB
Newlands brewery is the ranked the third or fourth largest brewery in South Africa,
depending on the capacity it is running at, with the ability to produce over 4 million
hectolitres of beer on an annual basis. The brewery has been operational in its
current location since the mid 1800’s, and was bought by South African Breweries in
1956. Newlands currently employs approximately 250 people, and hosts a number of
daily tours of the old and new brewery, known as Brewmaster Walks. Newlands
Brewery is unique in that none of the water used in the brewing process comes from
the municipal supply; all the water used is drawn directly from the source of the
Newlands and Kommetjie Springs (SAB Newlands Brewery, n.d.). Nonetheless,
unlike some breweries, Newlands Brewery counts every drop of water that is used in
the brewing process and is conscious of the need to reduce the amount of water
used to brew beer, and have been successful of the past few years, reducing their
water use per hectolitre of beer by approximately 13% since 2008.
3.4 DATA ANALYSIS METHODS
The data analysis required a combination of quantitative and qualitative measures.
The qualitative analysis was done in the form of analytical induction, as this method
allows the research to incorporate existing models and build on these as the
research progresses.
Although the quantitative analysis was ultimately a relatively insignificant component
of this research, it did provide insight into the development of business cases
regarding the impact analysis and payback calculations.
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3.5 RESEARCH CRITERIA
According to Mason (1996), reliability, validity, and generalizability “are different
kinds of measures of the quality, rigour, and wider potential of research, which are
achieved according to certain methodological and disciplinary conventions and
principles” (as cited in Bryman & Bell, 2011, p. 395).
3.5.1 VALIDITY
Mason (1996) explains that validity refers to whether “you are observing, identifying,
or ‘measuring’ what you say you are”, thus validity refers to whether or no the
concept or data that is being measured, does in fact measure that concept (as cited
in Bryman & Bell, 2011, p. 395). To ensure that the data being measured is valid, the
qualitative data was collected directly from the internal measurement systems, and
the qualitative data was observed in the system within which it operates.
3.5.2 RELIABILITY
Although this research may seem limited as it focuses on one primary case in terms
of external reliability, the degree of which the study can be replicated, it has
significant relevance to practitioners (Bryman & Bell, 2011). Breweries are
essentially designed and built in a variety of ways, thus the structures and systems in
all cases will differ somewhat. However, the brewing process is relatively standard,
and this research developed using a facility that has been successful in reducing
their wastewater emissions to provide a broad conceptual framework where a
number of concepts could be replicated in other facilities.
Quantitatively, the research will rely on internal reliability to ensure that the data is
consistent with the impacts that have been observed.
3.5.3 LIMITATIONS
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The limitations to this research are directly related to the time frame within which it
was required to be completed as well as the ability to physically research more than
one facility. Due to the time constraints and financial restrictions, only one
commercial brewery was used in the primary case study. Further research would
include input from additional breweries from a variety of brewing companies.
4 RESEARCH FINDINGS, ANALYSIS, AND DISCUSSION
This research set out to develop an understanding of how sustainable development
practices were managed and implemented within the context of the brewing industry,
specifically with regard to the practices employed by the SAB Newlands Brewery in
Cape Town, South Africa. The Newlands Brewery is a mid-sized brewery operating
at the foot of Table Mountain, in the heart of the residential suburb of Newlands. The
brewery has been operating at its current location since the mid-1800’s, and under
the ownership of South African Breweries since 1956. The brewery has the capacity
to produce over 4 million hectolitres of beer on an annual basis, and employs
approximately 250 people. The old brewery buildings on site were granted National
Heritage Status in 1995 (SAB Newlands Brewery, n.d.).
The research took a case study approach, using participant observation,
predominantly within the sustainable development environment. The stakeholders
that were engaged with for the purpose of this research are listed in the below table,
along with their titles and years of service within the organisation (See Table 1:
Participant Job Titles & Years of Service).
Table 1: Participant Job Titles & Years of Service
Position Years Service
1. Engineering Manager 13
2. Packaging Superintendent 17
3. Lead Process Engineer 15
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4. Engineering Consultant 12
5. Packaging Manger 8
6. Brewing & Utilities Engineer 11
7. Process Control Engineer 4
8. Marketing Co-ordinator Unknown
9. General Manager 4
10. Packaging Engineer 7
The findings have been dissected into the following key areas:
1. What the drivers of sustainable business practices are, and how the targets
are defined and communicated throughout the organisation at a global level.
2. The global approach that SABMiller plc has towards sustainable development.
3. How targets are allocated at a national and regional level, and how these are
broken down into individual brewery targets.
4. The operational aspects of sustainable business practices as they pertain to
the SAB Newlands Brewery, focussing on how targets are implemented and
realised.
5. The evaluation and measurement of sustainable development projects, and
how accountability is addressed and consequences are determined.
4.1 DRIVERS OF SUSTAINABILITY
One of the core focuses for this research was to develop an understanding of what
the drivers for sustainable development practices within the brewing industry were.
To get an understanding of why a company like SABMiller plc would place
sustainability high on the agenda, it was important to find out where the pressures for
this was coming from. The alcohol industry does not necessarily have the best
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reputation, especially in a country where so many people live in abject poverty and
with a history of alcohol abuse related to the “dop system”, therefore the pressure
from external stakeholders plays a significant role in the stance towards
sustainability.
4.1.1 STRIVING FOR SUSTAINABILITY
With global pressure on companies to be cognisant of their resource use, increased
competition through globalisation, and the desire to maintain a strong reputation,
SABMiller plc is fully aware that it cannot operate in countries without reducing costs,
protecting the environment, and working with and in local communities.
Embracing bold aspirations to be a globally respected company, the most admired
company in the world, and the partner of choice, it is not enough to be seen as doing
the right thing, SABMiller realises that it must be doing the right thing.
Water poses a unique perspective as, unlike energy where cost is a major factor and
thus incentive to reduce demand, water is based on a licence to operate mentality.
Since water scarcity is a growing global concern, coupled with the desire to be the
most admired company in the world, SABMiller cannot be seen as unnecessarily
wasting water as a business. In all aspect of the business, the company is finding
ways to reduce the consumption of water. According to one of the interviewees, on
the agricultural side, SABMiller has seen reductions of up to 30% in irrigation waters
in some of their operations. Through their global engineering centre, as well as in
their local technological hubs, SABMiller are finding more and better ways of
addressing water issues, searching for ways to improve irrigation techniques and
improve saturation and soil retention.
SABMiller realises that there is a need for a global focus on water and is committed
to using less by reducing, reusing and recycling. The Newlands brewery is also
cognisant where its water comes from, as it is unlike any other breweries, unique in
that it is drawn from springs originating on Table Mountain and boreholes into the
local water table.
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Nonetheless, SABMiller is not only addressing issues of sustainability for moral and
altruistic reasons; operational efficiency results in cost reductions that aid in
generating higher profits. Since beer is exceptionally price sensitive, SABMiller does
not increase the cost of beer more than the Consumer Price Index on an annual
basis. This coupled with the increasing cost of inputs means that the company has to
be very efficient, innovative and smart about the way they do business.
4.1.2 NEWLANDS BREWERY CULTURE
The vision of SAB Newlands is to be locally admired and globally recognised. This
vision is driven by the desire for international breweries in the SABMiller family, in
regions like Latin America and Australasia, to look up to Newlands because of the
innovative ways they are achieving their targets.
The culture at SAB Newlands was described by one of the interviewees as
militaristic in nature: although a fun and engaging working environment, all
operations are tracked, measured, and everything that is measured, is managed.
The operation also has a very competitive nature, and there is a strong sense of
pride associated with where the brewery operates, and the desire to be in the global
Top10 SABMiller breweries, as well as a desire to win the Best Brewery award.
There is a lot of planning and thought that goes into the assessing past performance
and the actual capability of the brewery, and employees seem to respond to the
stretch targets laid out to meet these desires.
Through effective internal communication, the top down approach provides sight as
to where targets should be set, and how these metrics are tracked, which ensures
that employees are cognisant of what they are doing and why. By ensuring people
are accountable for targets, and handing employees ownership, these employees
take on the responsibility and strive to deliver on them. Accountability is seen at all
levels, from the Managing Director who reports to the board, to the operator running
a process in the packaging line. Accountability is funnelled from the top down, and
employees are expected to be able to report back from the bottom up. This
accountability ensures that individuals know what their targets are supposed to be,
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and thus when they are in danger of not meeting them, they are aware that
operational changes need to be implemented and addressed.
There is a lot of pride about where Newlands Brewery operates, and pride in fact that
they have a licence to operate at the foot of Table Mountain, in the heart of
Newlands, and not in an industrial landscape. This pride translates into the
knowledge that they have a big responsibility to operate in the right manner. There is
a high level of awareness about where they are operating, and that there is a
growing concern regarding the scarcity of water, hence the company and all its
employees must be seen as doing everything they can to reduce their impact.
4.2 SABMILLER PLC’S APPROACH TO SUSTAINABILITY
SABMiller plc, as a global entity, prescribes what the company’s goals and targets
are. Sustainable development has become a key focus in the way they operate
throughout the world, and this focus has been translated into focus areas and
priorities that are addressed at every level of the business.
4.2.1 SUSTAINABLE DEVELOPMENT PRIORITIES
SAB has a commitment to 10 sustainable development priorities (See Table 2:
SABMiller plc - Sustainable Development Priorities (SABMiller plc, 2012c)), and the
below goals take into account their commitment to the UN Global Compact as well
as the UN Millennium Development Goals, highlighted earlier in this paper.
These moral commitments to sustainable development show the seriousness of the
stance that SABMiller has taken on these issues. However, sustainable development
practices are not only driven by moral commitment, many sustainable initiatives,
such as the reduction on energy dependence and the reduction of water usage have
economic benefits to businesses. These improvements in operational efficiency
reduce overhead costs that could potentially contribute to increased profits. Thus, it
is in their best interests to focus on these sustainable initiatives as it addresses both
social and economic goals.
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Table 2: SABMiller plc - Sustainable Development Priorities (SABMiller plc, 2012c)
1. Encouraging responsible drinking
2. Making more beer using less water
3. Reducing energy & carbon footprints
4. Packaging reuse and recycling
5. Working towards zero-waste operations
6. Encouraging enterprise development in their value chains
7. Benefiting communities
8. Contributing to HIV/Aids reduction
9. Respecting human rights
10. Transparency and ethics
SAB as a global entity addresses a number of key areas of progress and
performance. They recognise that they are part of the fabric of society, and thus
seek to generate inclusive growth. What this means for SAB is that they strive to
“build value chains that drive economic growth, and stimulate social development
while using scarce natural resources efficiently” (SABMiller plc, 2012, p. 2). The
intention of this stance is to generate long-term returns whilst at the same time
creating wealth for the local communities they operate in.
Sustainability is one of SABMiller’s four strategic priorities, and thus core to the way
in which their business operates. As a global entity, they focus on three areas that
are most material to the company: alcohol responsibility, water, and enterprise
development in their value chain (See Figure 3: A Focused Approach to Sustainable
Development Management (SABMiller plc, 2012c)).
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Figure 3: A Focused Approach to Sustainable Development Management (SABMiller plc, 2012c)
SABMiller realises that the growing population is putting strain on the worlds finite
resources, and that there is a need for business, government and society to work
together to “develop practical, local solutions that generate inclusive growth while
conserving water and energy and managing the use of land” (SABMiller plc, 2012,
para. 8). SABMiller has implemented extensive programs to improve water and
energy efficiency, and reduce waste in their breweries, and in 2012 the average
water to beer ratio had fallen by 5% from 4.2hl/hl to 4.0hl/hl (SABMiller plc, 2012,
para. 9). In addition to their internal strategies for addressing water, energy, and
agricultural concerns, SABMiller has also partnered with governments, non-
governmental organisations, and academics to tackle these challenges, the Strategic
Water Partnership in South Africa being one of these.
4.2.2 ENCOURAGING COMPETITION
All SABMiller breweries are graded monthly based on operational throughput,
efficiency, quality, cost, and sustainable development. This grading results in the
breweries being ranked against each other, creating a type of “internal competition”
which creates an awareness of where the other breweries sit with regard to the ten
priorities that fall into these categories. Each priority is given a score according to a
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predetermined rubric, and these scores are totalled, and the breweries are ranked
according to their score relative to the other breweries. In the Newlands Brewery, in
which this case study was conducted, monthly results are published on noticeboards
throughout the brewery for all to see. In addition, these results were presented to the
management committee on a monthly basis, to highlight the achievements and
breakdowns of their efforts. Publishing these results in locations that employees can
see them regularly creates awareness about where the brewery is doing well and
where is needs improvement, creating a common understanding about what requires
focus and attention.
All ten of the goals in the Best Brewery competition need to be vigorously chased in
order for Newlands to climb the rankings, and since all the breweries in the
SABMiller family are simultaneously and aggressively chasing these targets, there is
a need to move faster than the competition. The desire to be ranked in the global
Top 10 requires more innovative and out of the box ideas and initiatives to exceed
the goals.
4.2.3 INTERNAL COMMUNICATION
SABMiller has, as a global entity, prescribed what focus areas are to be addressed,
and, and each region is then tasked with communicating the broad goals to the
various breweries. In South Africa, the sustainable development communication is
channelled through the Managing Director and the Technical Director, and then to
the General Managers of each business unit. Within the business units, department
managers are informed of the goals and priorities, and it is then up to them to find
ways to achieve these.
Communication is seen as the most vital tool in ensuring buy in from the employees.
Ensuring the all employees understand the end goal of what these initiatives and
goals are set to achieve, and how to go about achieving them, is key to leveraging
and maintaining motivation and commitment to the priorities at all levels.
4.3 TARGET SETTING
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4.3.1 NATIONAL TARGETS
The setting of targets happens at an executive level by the CEO and the Executive
Committee. These targets are based on replicating the best practices implemented
throughout the world, leveraging the dimension of possibility, and converting these
into achievable targets for each region. Once the Executive Committee has ratified
these targets, they are conveyed to the Managing Directors of each region, who
evaluate the footprint within each target area, and how that footprint is comprised
according to each operational unit. The Managing Director and Manufacturing and
Technical Director will, with the help of internal and external consultants, do a
complete loss analysis and develop glide paths for each business unit. The glide
paths will be presented together with a list of possible initiatives aimed at achieving
specific end goals. These initiatives will include simple and immediate operational
changes, short term capital expenditure projects, and out of the box, Blue Sky
projects.
The glide paths are dimensioned and presented with three to five year targets, and it
is up to the Engineering Manager and the sustainable development team to identify
opportunities and initiatives to achieve them. Overall targets are broken down into
targets for specific operations, and the ownership of these targets becomes the onus
of the operators of that process or operation. Ensuring that individuals are
accountable for the targets set for their operation requires thorough communication,
and clear and descriptive explanations of the reasoning behind these targets.
4.3.2 BREWERY TARGETS
SAB has a sustainable development team in each brewery tasked with addressing
the challenges prescribed globally based on the ten focus points. The Sustainable
Development teams within the breweries meet on an annual basis to discuss the
targets for the following three years. The high-level targets are broken into the
operations that contribute to that target, and these operations are further dissected
into the individual processes that contribute to those operations, using target
calculators which, at the time of writing, was an excel spread sheet with all the
points-of-use dissected from the primary target. Each measureable target contributes
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to a higher-level target, which in turn contributes to the overall regional target.
Targets are assessed for each measureable operation based on current and
previous performance, the long-term overall goal, and the reality of achieving said
targets. To set future targets that are realistic within the brewery, glide paths, current
ratios and metrics, and information obtained from the various breweries is
considered. Most importantly, targets are set with the long-term goal in mind.
4.4 OPERATIONAL DECISIONS
4.4.1 WATER BALANCE & METERING
Metering plays a vital role in understanding and optimising the efficiency of
resources that are available. As mentioned previously from the study done by Van
der Burggen et al (2006), it is not uncommon for water balances can be understated
and underestimated. Although SAB Newlands is currently satisfactorily metered, they
estimate that 30% of water used in the brewery is not metered and as a result,
improvements on the efficiency with regard to this 30% cannot be measured or
understood. However, realising that installing additional meters will provide
assistance in addressing their global water goal, business cases have been
prepared and quotes discussed for these meters.
4.4.2 INTERNAL CONSULTANTS
SAB has a team of internal consultants consisting of three engineering and technical
specialists whose full time focus is to dimension opportunities available to local
breweries with regard to operational efficiency. These consultants are not based at
any specific facility, and spread their time between all the facilities in South Africa.
One of these consultants forms part of the Newlands Brewery Sustainable
Development team, and in this capacity, works with the various departments and
engineering teams to identify the various opportunities that contribute to achieving
brewery specific sustainable development goals.
The role of the internal consultants is important on a regional level as they enable
knowledge sharing between the facilities within the region. Working in a number of
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locations and with a number of teams, the initiatives that they work on in one facility
may prove beneficial in another.
4.4.3 SUSTAINABLE DEVELOPMENT MEETINGS
As mentioned previously, the sustainable development teams within the breweries
meet on a weekly basis to discuss the status of various projects and initiatives. The
sustainable development team consists of the following positions: Engineering
Manager, Packaging Superintendent, Packaging Engineer, Packaging Manger,
Brewing & Utilities Engineer, Engineering Consultant, Lead Process Engineer,
Process Control Engineer, Marketing Coordinator, as well as one of the internal
Engineering Consultants who attends these meetings as often as possible. All of
these members have different expertise, and this cross-functional communication
and knowledge sharing allows for productive discussions regarding the opportunities
that are tabled.
The first order of business for these meetings is an overall view of the situation of the
brewery, focussing on the key sustainable development goals, namely water and
energy. The overall view is looked at in a graphical format in the form of a glide path,
with the target clearly displayed. Should the brewery not be meeting its targets in
either of these areas, i.e. the glide path has spiked, or is not below the target trend-
line, the team will dissect the goals further, to identify what the cause of the problem
is. Once the root of the problem has been identified, the responsible department will
provide an explanation of why they believe the problem has occurred. The
explanation is regularly scrutinised by the rest of the team, with a number of
explanations and possible causes being highlighted by the highly qualified engineers
and managers. Once the cause has been agreed upon, the team will discuss
possible solutions. These solutions are thoroughly thought through by the team,
once again offering a variety of opinions and options as to how to solve the problem.
Once the best possible solution has been identified, the task is added to a task-
tracker where the required steps are outlined, a deadline allocated, as well as being
allocated to the corresponding accountable person.
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The second order of business at these meeting is to discuss the status of active
sustainable development projects. All projects are recorded in an Excel sheet, and
allocated to one of the members with a prescribed due date. The team will cycle
through the list checking the status of each project to ensure that targets are met by
in the required time. Projects that have been completed will be marked as such, and
the team will discuss if there has already been noticeable impact and what that
impact is.
The fist task for a new active project is the development of a business case detailing
the concept of the project, the area it is intended to address, the cost of the project,
and as a result, the payback period that would make that project viable. Members of
the team would have been allocated responsibilities from prior meetings, and will
present a case for their respective projects. The details of the projects will be
discussed and debated, and the members of the team will voice their opinions and
debate the merits of the projects. Only once the business cases have been
presented will a decision be made on whether the project is a viable and worthwhile
option, and the method used to make these decisions will be discussed in the
following section.
The final order of business for these meetings will be a discussion on new projects
that can be implemented to address sustainable development goals. Members of the
team present ideas on where there are opportunities available, and possible ways of
leveraging these opportunities to drive sustainable development. Once again, these
opportunities are discussed in a group situation, and a collective thought process
ensues regarding each opportunity. If there is a consensus that the idea is
worthwhile, the task of setting up a business case will be allocated to one of the
members, normally the person in charge of that specific department, and added to
the list of active projects to be discussed as per the third order of business
highlighted above.
4.4.4 OPPORTUNITY EVALUATION
The evaluation of business cases, the third order of business in the prior section, is
possibly the most important stage of the sustainable development meetings. When
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business cases are presented, the details of how the project would be implemented
are carefully explained so that all members of the sustainable development meeting
can get a clear understanding of what the project aims to do, and how it plans to do
it. The team will discuss any possible shortcomings that the project may have, and
ways to address these shortcomings, leveraging the varied expertise available.
An impact assessment is included in the business case, explaining the probable
reduction in water or energy that the project may have. This impact assessment
would have been completed with input from the process engineers to ensure that it is
as accurate as possible.
The business case is regularly accompanied by a quote for the required work and
equipment, and this cost will be equated into a payback period against the savings
from the reduction of energy or water.
4.4.5 INITIATIVE SELECTION
The selection of projects is relatively simple. The projects with the most significant
impact, the shortest payback period, and the smallest cost, will most likely be
selected. The reason for this is that each year, the sustainable development team is
allocated a certain budget to meet its annual targets, and thus each project is
selected in order to maximise the results from that budget. Essentially, the low
hanging fruit will be selected first, and slowly the decisions will become more
challenging.
It is believed that understanding the business decisions behind project selection and
implementation was imperative to the overall strategic plan.
4.4.6 SUSTAINABILITY BUDGET
The budgeting for sustainability initiatives is addressed at a national level, and each
region is allocated a certain amount of capital expenditure, part of which is
specifically allocated to sustainable development initiatives. This capital budget is
thoroughly thought out and planned in the previous financial year, based on
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estimated costs of a number of projects with significant gains. One of the current
core focuses is to ensure that all processes are metered, as the belief is, that if it is
metered, it can be measured, and if it is measured, it can be managed.
In addition to this, there is a centrally financed manufacturing capital expenditure
fund. This financial resource is used mainly for replacement and refurbishment of
aging equipment and new technology, however, should the regional fund be
depleted, and there is a good enough business case for an initiative, it would be
possible to draw from this allocation. All the breweries in the region would be allowed
to request financial allocations from this fund, and they are assessed on the strength
of the business case and the priority of achieving a specific goal.
Savings that are realised through reductions in operational activities in energy and
water cannot be directly used as funds for additional projects, and these funds can
only be allocated though the regional and national manufacturing funds.
4.4.7 COMMUNICATION & IMPLEMENTATION
Each of the projects selected would fall into a department managed by one of the
individuals in the Sustainable Development team. In cases where the project does
not fall into a specific department, and is seen as a more general project, one of the
systems engineers will take responsibility. The implementation plans are thus
communicated to the departments through these channels. As mentioned previously,
internal communication and awareness regarding sustainable initiatives seems
effective within the brewery, and a number of noticeboards display the monthly
achievements and rankings.
Before a project is implemented, a business case is done to determine the impact
that it will have on the target. Since all departments and the individuals operating
specific processes are aware of the targets associated with these processes,
communication about the impact of a specific initiative plays an important role. This
communication is understood to enhance the buy in from the employees, as there
are incentives for these targets to be met.
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4.5 EVALUATION & MEASUREMENT
4.5.1 PROJECT EVALUATION
Projects are measured according to their actual impact with regard to their areas of
concern. Once implemented, reports will be retrieved from the system and analysed
with specific reference to the point-of-use of that initiative. The actual reduction
impact that the initiative has had will be compared to the business case presented,
and the payback will be relooked at.
4.5.2 BREWERY EVLAUATION & INCENTIVES
Breweries are evaluated on their sustainable development goals based on whether
they reach their targets or not, and this evaluation is filtered down throughout the
organization in the form of departmental and individual performance reviews. If
targets are met, departments and individuals will be graded accordingly, and
exceeding or falling short of these targets will have positive or negative effects
respectively on these performance reviews.
There are financial incentives tied to performance reviews, and these are based on
the performance reviews of individuals and departments. Annual increases are
determined according to the performance rating of each individual, thus if targets are
exceeded, annual increases are likely to be greater, and conversely, if targets are
not reached, increases are likely to be lower. It is also possible for personal
incentives to be put in place. If a certain individual is responsible for a specific target,
management could incentivise that individual by offering a performance based
incentive scheme.
The Best Brewery competition includes a financial incentive as well, and on a
monthly basis, every employee in the winning brewery receives half a month’s salary
as a bonus. This financial incentive also drives employees at every level and in every
department to contribute achieving the goals prescribed by the scorecard. At the
time of writing this paper, SAB Newlands Brewery was achieving the maximum
points available in water and energy efficiency.
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4.5.3 SUSTAINABILITY ASSESMENT MATRIX
SABMiller uses their Sustainable Assessment Matrix (SAM) to benchmark all of the
93 breweries globally against each other. SAM is a “bespoke management system
(SABMiller, 2011) that enables the company to monitor the performance of the
operating businesses against the 10 sustainable development priorities set”
(SmartKPIs.com, 2011).
The Sustainability Assessment Matrix is a reporting tool that enables SABMiller plc
to measure their performance based on specific criteria laid out for each of the ten
priorities. Evaluating the priorities on an ascending scale, it allows the group to track
and measure their performance from a business unit level right through to a global
level. The ascending stairway scale is ranked (See Table 3: Sustainable
Development Stairway Level Assessment Criteria (SABMiller plc, 2012c)), with 1
being Minimum Standard, and 5 being Leading Edge. Regions and operations focus
on their specific priorities based on local needs and priorities (SmartKPIs.com,
2011).
Table 3: Sustainable Development Stairway Level Assessment Criteria (SABMiller plc, 2012c)
Level Description
5 Leading Edge Performance that represents genuine global leadership
on an issue.
4 Best Practice Achieving what is currently considered to be global best
practice in a particular field.
3 Developing Leadership Applying a comprehensive approach including
innovative tools and widespread engagement.
2 Progressing Ensuring consistent performance is achieved in a
particular field.
1 Minimum Standard All operations must achieve level 1, or have a plan in
place to do so, as it represents management of our key
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The data is collected bi-annually through a SAM Self Assessment form, which forms
part of the business reporting cycle. This data is then compiled into scorecards that
show the performance of each operation, each region, and at a group level. The data
is used in conjunction with action plans to improve performance and monitor
progress as well as various external reporting requirements (SmartKPIs.com, 2011).
This data is also published on a biannual basis, and investors and stakeholders are
welcome to view it using their online reporting tool (See Figure 4: Sustainable
Development Reporting Tool (SABMiller plc, 2012b)). The figure below shows
Africa’s progress over the past four years with regard to the ten priorities.
Figure 4: Sustainable Development Reporting Tool (SABMiller plc, 2012b)
4.6 COMPARATIVE ANALYSIS
There are a number of key take-outs that can be lifted from the research in this
paper, many of which are aligned with what the literature has said. This research
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proposes that the three most important aspects for driving and implementing
sustainable development practices can be explained as: Culture and
Communication; Metering and Measurement; and Organisational Implementation.
Culture and communication are core components in achieving goals and objectives
with regards to sustainable development, in that achieving these goals requires
dedication and effort from all employees if continuous source reduction is to occur.
Ensuring buy-in from all employees requires that they are fully aware of what and
why they should be chasing a specific target. In the case of SAB, incentives are in
place to promote motivation towards these goals.
Metering and measurement presents another core component with regards to
implementing sustainable business practices, in that without the use of meters and
the constant monitoring and measurement of points-of-use, impacts and
improvements cannot be tracked. Respondents from the interviews for this research
highlighted the fact that if it was metered it could be measured, and if it was
mastered it could be managed. This can be linked to communication and motivation
by ensuring that performance with regards to objectives and goals is regularly
communicated, and that constant monitoring allows departments, teams, and
individuals, to strive for incentivised targets.
The third and final component that is highlighted as a core component with regard to
this research is the organisational implementation. This component was not as
thoroughly documented in the literature, but clearly evident in the research and
observation undertaken in this report. Establishing a team of highly skilled individuals
with a range of expertise to drive sustainable initiatives has a number of merits.
Firstly, projects can be scrutinised thoroughly before they are implemented,
leveraging the expertise of all the individuals. Secondly, cross-functional
communication is enhanced, linked by common goals established within the team.
Thirdly, and specific to organisations like SABMiller where there are a number of
facilities throughout the world, a knowledge sharing platform is created by ensuring
that internal consultants engage with sustainable development teams in a number of
facilities.
SAB Newlands Brewery is tackling the issue of sustainable development in a
structured and well-planned manor. The literature examined, specifically the
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frameworks that have been discussed, present operational directives and guidelines
that are aligned with those of Newlands Brewery.
One aspect that this research expected to find with regard to rewards related to
target achievement was that the allocation of sustainable development funds would
have increased if performance were over target. Once the “low hanging fruit” has
been grasped, it becomes increasingly more difficult and expensive to deliver results,
thus a greater allocation of funds could be required. This did not seem to be the
case, however, individual and departmental incentives were in place to motivate
employees. The literature did not cover accountability, rewards and repercussions in
depth, and these present a strong approach to ensure motivation and dedication to
sustainable development goals, just as any incentive would. SAB Newlands
addresses this by linking targets for departments and individuals to their individual
performance reviews.
The literature covers the importance of setting goals and objectives and ensuring
that these are effectively communicated, as well as covering the importance of
metering and measurement. However, it does not discuss the setting of targets that
are specific to each point-of-use. This has been covered at a high level in this report,
and presents an avenue for further research.
SABMiller plc has a global “internal competition”, the Best Brewery competition,
which ranks their breweries against each other according performance with regard to
a number of priorities. This internal competition is incentivised in such a way that
every employee in the brewery that claims first place on a monthly basis receives an
extra half-months salary.
4.7 RESEARCH LIMITATIONS
The limitations with regard to this research stem primarily from the time constraints
associated with this research project. It would have been beneficial to do a thorough
investigation into the understanding of the frameworks, principles and tools
presented by the UN Global Compact initiative as well as the documentation,
frameworks and principles outlined in the ISO 14001 documentation. Additionally,
acquiring the ISO 14001 documentation is costly, and thus the high level analysis of
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what the document presents is based on literature from other authors and the
information obtainable from their online resources.
The opportunity to observe the operational processes in more than one brewery
would similarly have provided beneficial information. Due to the limited time, financial
resources, and geographical availability of commercial breweries in South Africa,
SAB Newlands presented the sole opportunity for this research. Nonetheless, it is
assumed that the drivers of sustainability, the internal communication, and the
processes and implementation procedures would be similar throughout all the SAB
breweries in the region.
Access to certain key individuals presented a limitation in terms of information on
how sustainability is addressed at a regional level. There is interest as to the role
that the Head of Sustainable Development plays within the sustainable development
context at SAB, and how and what initiatives are driven through this channel.
Additionally, engagement with the Manufacturing and Technical Director would have
provided further insight into the methods used when setting and prescribing targets
at a regional level.
The majority of this research was done through participant observation of the SAB
Newlands Sustainable Development team, thus, this research is not based on the
premise that all breweries within the SABMiller plc group address sustainable
initiatives in the same manner. Further research would be required to analyse the
alternative approaches used within the group.
5 RESEARCH CONCLUSIONS
5.1 KEY INSIGHTS
This paper set out to determine what the drivers for sustainable development
practices are, how targets are defined and communicated, how sustainable
development is implemented at an operational level, and how projects and initiatives
are evaluated, measured, and rewarded.
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5.1.1 SUSTAINABILITY DRIVERS
SABMiller plc has taken global stance on sustainability, and the groups mission to be
globally admired and a preferred business partner back this global stance. The
reasons for addressing sustainability are not purely based on altruistic reasoning and
moral obligation; operational efficiency also plays a significant role when addressing
these issues. Nonetheless, SAB and the Newlands Brewery are addressing these
issues because operating within a local, residential community exerts pressure with
regard to the manner in which the company, and specifically, the Newlands business
unit are run.
SAB prescribes ten sustainability priorities at a global level, one of which pertains to
the use water, specifically; produce more beer using less water. Addressing
sustainable water use is a unique driver in that the issues are not necessary centred
around cost, but more so around the utilisation of a scarce resource in operations
requiring intensive use of said resource. Water use is based on SAB’s licence to
operate, and hence, reducing, reusing, and recycling this resource are core focuses
of this brewery.
Issues pertaining to sustainable development are encompassed in the metrics that
rank SABMiller breweries against each other in terms of overall performance, and
this internal competition provides an additional incentive to strive towards
sustainable goals and targets.
Additionally, SABMiller’s commitment to addressing sustainability issues with regard
to water can be understood through the partnerships they have developed with
governments, NGO’s, and academics in addressing these issues.
SAB Newlands has a unique cultural stance with reference to the pride associated
with working in the brewery. Employees understand the value of working in a facility
at the foot of the majestic Table Mountain, in the heart of Newlands. There is
common understanding that to continue operating in the current location, operations
need to be run in the correct manner, and concerns of the local community need to
be understood and addressed.
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5.1.2 TARGET SETTING & COMMUNICATION
Targets with regard to sustainable development are set at an executive committee
level, communicated from the top, and filtered down to all individuals in all corners of
the business. Every individual within the employ of SAB Newlands has some role to
play in achieving these targets, hence effective communication and employee buy in
are vital for successful implementation and impact.
These targets are then communicated to the various operational units, who in turn
use target calculators to break the primary target into departmental targets, and
further down into point-of-use targets. The ownership and accountability of these
point-of-use targets is handed to the individuals who manage those specific
operations, and their performance rating is partially based on realising these.
5.1.3 OPERATIONAL DECISIONS & IMPLEMENTATION
Metering and measurement plays an important role in the implementation, as well as
the measurement, of sustainable development initiatives. SABMiller believes that if it
is metered, it can be measured, and if it is measured, it can be managed.
There is a Sustainable Development team at the Newlands Brewery, which consists
of individuals from a range of departments that bring with them a range of expertise.
These meetings provide opportunities to share opinions and knowledge about
various projects and initiatives that could aid sustainable development in the
brewery. The points of discussion in these meetings are the current situation of
sustainable development priorities, the status of active projects and initiatives, and
new or possible opportunities and initiatives.
In addition to the sustainable development team within the brewery, there is an
Internal Consulting team that works with all the facilities within South Africa. These
consultants work on conjunction with the sustainable development teams to identify
target areas and present solutions to address these. This team also provides a form
of cross-facility communication and knowledge sharing, spreading ideas, initiatives,
and business cases throughout the region.
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The budget for sustainable development initiatives forms part of the regional capital
expenditure budget. The amount available for sustainable development spend is
determined in the previous financial year according to the costs associated with
specific projects that have been earmarked. Additional funds can be obtained from
the national capital expenditure budget, provided a solid business case is presented.
Initiatives are selected based on the projected impact that they may have on certain
targets, the costs associated with implementing the initiative, the availability of funds
in the budget, and the estimated payback period.
5.1.4 EVALUATION & MEASUREMENT
Individual projects are evaluated according to the actual impact that they have had
on the system, adding strength to the argument that metering is vital. Projects are
reassessed once they have been implemented to confirm or recalculate the impact
and expected payback period.
Evaluation is done at each level, and those accountable for individual targets are
held responsible for their respective targets. These targets are linked to individual
and departmental performance reviews, which, in turn, are linked to remuneration
incentives. This incentive scheme promotes buy in from all the employees, creating a
stronger drive towards achieving these targets.
The Best Brewery competition encompasses a few sustainable development areas,
specifically, water and energy, as metrics that contribute to the over all score. This
internal competition presents another incentive to chase all the targets that are
graded, as every employee in the brewery that wins this monthly award, is rewarded
with an additional half months salary as a reward.
The Sustainability Assessment Matrix rates the region as a whole with regard to all
of the sustainable development priorities, and is used as a tool to measure current
performance of the region or company as a whole.
5.2 RESEARCH CONTRIBUTION
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This research adds strength to the importance of Culture and Communication,
Metering and Measurement, and Organisational Implementation, within an
organisation that is striving towards sustainable development goals. The research
also highlights the fact that SABMiller is tackling the issues of sustainable
development in a structured manor that is aligned with that of existing literature.
In addition to the above, this literature has explored the areas of target setting at an
operational level and the importance of setting targets for every point-of-use, as well
as the high-level merits of linking targets to personal performance reviews and the
effect this has on the motivation of employees. Since this section of the research
was not looked at in depth, it presents an opportunity to develop further
understanding as to how sustainable initiatives are influenced through incentives and
company culture.
This research has also discussed the Best Brewery initiative that SABMiller plc has
implemented. This system, which ranks their breweries against each other according
performance with regard to a number of priorities, creates internal competition based
on achieving certain goals and objectives, and number of which are related to
sustainable development. This presents another opportunity to explore the
effectiveness of this kind of scheme in similarly structured organisations.
5.3 FUTURE RESEARCH DIRECTION
There are a number of directions this research could be taken further, as the
conceptual frameworks that have been identified, and the operational processes that
are utilised at the Newlands Brewery can be adapted to suit a number of operations.
This research can be replicated in a number of breweries, and since this paper is
based on a case study of one specific brewery, the opportunity to look at additional
breweries within the SABMiller group, as well as other major brewing companies that
are addressing sustainable initiatives would provide alternative methods and
evidence of the operational processes used in addressing these issues.
It would be interesting to understand the various drivers of sustainability as they
pertain to the different regions within which SABMiller plc operate. SABMiller plc
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pays attention to the UN Millennium Development Goals and the Global Compact,
however, because policies and regulations vary across the globe, approaches could
differ substantially.
This research has specifically avoided the highly technological aspect of continuous
source reduction, however, this remains a pertinent topic within the area of interest.
For the purpose of further research in this vein, the technological advances with
regard to measurement and metric tracking would present improved methods of
evaluating performance and identifying problem areas.
Addressing corporate culture, as identified in this research, is of critical importance to
ensuring that sustainable initiatives are understood throughout the organisation.
Further investigation into how to promote this change in corporate culture could be
done, with the idea of a conceptual framework being developed for organisations
embarking on the journey.
Following on from corporate culture, an in depth analysis of the Best Brewery
initiative could be done to understand the effectiveness that a scheme like this would
have on the organisation. This initiative may provide an opportunity for similarly
structured organisations to leverage possible competitive nature within their
operations.
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