BLOOMINGTON, Indiana – Popping the top of a frosty beer after a long day of work has long been a tradition for many Hoosiers. As average daily temperatures continue to rise every year, the tradition may become a necessity to keep cool.
Some businesses around the globe, including beer breweries, are trying to minimize their impact on climate change by investing in sustainably produced products. But switching over to more environmentally friendly processes often adds to a company’s costs and, eventually, the consumer’s beer tab.
A team of researchers from Indiana University is looking into whether beer buyers are willing to pay more for a sustainably produced beer. The research could provide more insight into whether being climate change-conscious makes financial sense for companies.
Beer brewing is an energy-intensive business. The U.S. Brewers Association estimates that it takes from 12 to 22 kilowatt hours of electricity to make one barrel of beer. That is the equivalent of the carbon dioxide emissions of 1-1.8 gallons of gasoline. It also takes about seven barrels of water to produce one barrel of beer.
Some breweries are trying to make their operations more environmentally friendly.
“Over the last several years a lot of breweries across the country have invested in greener infrastructure,” said Sanya Carley, associate professor at Indiana University-Bloomington’s School of Public and Environmental Affairs. “They are making more energy efficient investments in equipment or putting solar panels in their roof or combined heat and power or some kind of gas recovery systems.”
Carley and Lilian Yahng, director of research and development at Indiana University’s Center for Survey Research, set out to discover if the change would be worth the cost by finding out if and how much beer drinkers would be willing to pay for sustainably produced beer.
In a survey, the researchers asked beer consumers about their usual beer purchases, including what kinds of beer they purchased and how much they paid for it. They also asked whether they would be willing to pay more for their beer if it was made with sustainable practices.
“We found that 59 percent of our sample of over a thousand respondents are willing to pay more and on average that amounted to $1.30 per six pack,” Carley said. “So it’s a pretty significant increase in expenditures for sustainability.”
That finding is good news for environmentally-minded brewers, because it means they can confidently invest in more efficient lighting and boilers, solar panels and other greenhouse gas-reducing infrastructure.
“This is a broader impact kind of investment. It’s not just to benefit the brewery. It’s to benefit society and the environment at large,” Carley said. “The question is why the individual brewer would invest in these things, which cost a lot of money, just for the greater good. And so what our study actually shows is that consumers are willing to pay for it. So brewers aren’t just increasing their costs without increasing their revenue as well.”
Converting to sustainable brewing practices requires substantial upfront costs. That could dissuade smaller craft brewers thinking about making the switch. One Bloomington-based brewery says committing to sustainability requires a change in mindset over a period of time.
“Process-wise, there isn’t one specific thing where we decided, ‘Oh, let’s do this now, and now we’re a sustainable brewery,’” said Pete Batule, Upland Brewing Company president. “It’s been a lot of little changes over years of time. It’s more of an outlook and vision of how we want to run our company.”
Batule says environmental stewardship is imprinted in the DNA of the company. But he says sustainability also makes economic sense.
“There’s a lot of sustainable things that we do that do have a positive economic impact,” he said. “It doesn’t cost us a ton, but we do save money along the way. So it’s both better for the environment and better for our business.”
Upland Brewing Co. has invested in as many sustainable practices as possible, Batule says. The company buys from local farmers and growers and uses energy-saving methods like solar and geothermal heating, variable speed-kitchen hoods in its restaurants and a vermicomposting system at its Bloomington Brew Pub that reduces up to 8,000 pounds of food waste. The company also treats wastewater to reduce phosphorus, and gives away spent grain and yeast to farmers for use as cattle feed and compost.
Brewing giants Anheuser-Busch and MillerCoors have adopted sustainability measures and set short-term sustainability goals.
By 2025, Anheuser Busch aims to purchase 100 percent of its electricity from renewable resources, reduce carbon dioxide emissions by 25 percent and achieve several other sustainability goals. MillerCoors, known as Molson Coors outside the U.S., wants to reduce its carbon emissions by 50 percent, achieve zero waste at landfills and improve water use efficiency.