10Q: Brewing Well by Brewing Good
Bottles of George Killian's Irish Red beer make their way down a conveyor before being boxed at the Molson Coors brewery in Golden, Colorado. Molson Coors Brewing Co. is the biggest beer company in North America. Source: Photograph by Matthew Staver/Bloomberg
Bart Alexander is Chief Corporate Responsibility Officer for Molson Coors, the product of a 2005 merger between the two North American brewers. He spoke recently with Eric Roston, sustainability editor.
ER: Many people are still getting used to the notion, sometimes through caricature, of the “carbon footprint.” What’s a “beer print”?
BA: When you put a bottle of beer down you leave a water mark on the coaster. Our company leaves a mark on the world and its people. The challenge of the “beer print” to our employees is grow our “positive beer print” and shrink our “negative beer print.”
That idea came out of a bit of a crisis we had. We rolled out a very typical corporate responsibility agenda and people’s eyes glazed over. The company’s leadership team said this isn’t getting through to employees. It needs to, so fix it. A group of us went off to a little mini-retreat. After a day and a half we came up with an idea that we all looked at and said, Yeah. It’s all right. I’ll live with that if I have to…
ER: What was it?
BA: “Connecting for Good.”
ER: Yeah… That’s an issue with this whole space: It all sounds like do-gooder pablum. But really, how does this affect the stock price?
BA: Financial stakeholders ask if a company is looking at risks and opportunities in a qualitative way.
At the start, we really couldn’t show our return on investment for our company itself. We did some benchmarking and had generic data. There’s some evidence that companies with corporate responsibility programs outperform the wider market.
People care about whether we’re sustaining the availability of water around our facilities or we’re creating community problems. Those are business issues. That’s why we bring together the water stakeholders wherever we do business. We just had a forum in Tadcaster, a water-stressed area in the U.K.
ER: So did Molson Coors go into this with just a sense, or was there a discrete event or study?
BA: I’m looking at our 2006 business case for corporate responsibility. It had about four pieces. A huge piece of it wasn’t driven by external metrics. It was driven by recognizing what we already felt was a part of our DNA at that point as a new company.
Part of it was the no-brainer: all of the eco-efficiency measures.
Employee engagement drove part of it. We had some evidence that companies with a high corporate responsibility performance have more engaged work forces.
Also, we just looked at the trends: This is what’s expected of well-run companies.
ER: What’s all this look like on the ground?
BA: Here’s an example. There’s a fairly complicated system of reservoirs and pumps that deliver water to our Golden, Colo., facility. It used to run all the time, but didn’t need to. The water resources team said this is ridiculous. They requested capital expenditures to automate the whole thing, but got turned down that year.
So they did manual charts to plot out by hand what the usage looked like and started turning pumps on and off. They came up with a significant reduction in both energy and water cost, just by using a back-of-the-envelope method.
ER: Is the management lesson to decline first-time requests for expensive capital?
BA: It’s to not let the lack of a sophisticated solution get in the way of a good and effective simple solution.
ER: So how do you quantify fuzzy things that might affect reputation and standing?
BA: This year we partnered with several organizations, including WWF in Canada to do what’s called the Red Leaf program. People can do shoreline clean-up or plant trees or event plant virtual trees through social media.
Eventually we’ll be able to say how the Red Leaf program affects sales of Molson Canadian. It’s a little early right now to know that. It’s on our agenda for 2012.
ER: What peers have you learned the most from?
BA: When we started asking what guiding principles look like, we pulled a lot from the Cokes and Pepsi’s and the others of the world.
Our head of supply chain had come from Campbell’s. I got to know the people at Campbell’s. I thought they were doing a fabulous job so we used them as a model. I particularly appreciated that they were reporting not just to the corporate social responsibility world but to the consumer.
ER: What are you reading?
BA: The Watchman’s Rattle. It’s a wake-up call book about what political, economic, and social challenges the world may be facing.
ER: Commodity prices are trending up globally. There are more consumers, but also staples cost more. How does that long-term trend factor into long-range planning?
BA: The beer business has fairly low profit margins, so the cost of goods is a huge driver of whether we have a good year or bad year. Not only in grains but aluminum and glass and other things.
Risks in our supply of commodities are important. You look beyond just potential price and quality variations, and ask: What are some of the underlying factors that tell us a supplier has a handle on the future?
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