“The Importance of Sustainability in the Beverage Industry: Challenges and Goals for a Sustainable Future”

Building and developing a sustainable business is not an easy task for any industry, but it is a particularly big challenge for the beverage industry. Having recovered from the rapidly changing and severe consequences of the global pandemic – the lack of raw materials and supply problems, the industry is facing new challenges – the increase in the prices of raw materials, energy resources and the significantly high inflation.

A competitive beverage brand is and will be one that is consistent with sustainability values. Not only consumers, but also customers, business partners and company employees repeatedly emphasize sustainability as an important consideration when deciding who to buy from, who to cooperate with and who to work with. According to the data of the 2022 opinion survey of the beverage industry (101 companies participated in the Latvian customer survey of the “Royal Unibrew Baltic” group conducted by the research company “Kantar”, among which were representatives of retail chains, cafes and restaurants) – TOP 3 companies related to reputation and sustainability parameters that are important for partners in Latvia are a reliable commercial partner, produces and sells high-quality products and ensures a healthy selection of drinks. These three parameters can certainly be applied to consumer preferences, what is expected from a given product and company. According to the survey data, for more than half or 58% of the representatives of retail chains, restaurants and cafes, the sustainable operation of the company is one of the main factors when evaluating future cooperation with suppliers. Only 7% of respondents admit that the sustainability factor does not influence the decision to cooperate.

In turn, consumers expect a wider range of beverage products with less sugar, calories, and alcohol content and demand the use of recycled materials, more responsible extraction and use of production resources, brand authenticity and other requirements that would meet the individual way of thinking of the modern consumer. As a society, we are more diverse than ever, so producing drinks that fully meet every consumer requirement is difficult and almost impossible, but we must strive to do our best by continuing to work on improvements and invest in new initiatives.

Sustainable business practices are not just about doing the right thing. The main goal of the company should be the desire to optimize and reduce the use of resources, because this is mutually beneficial in the long term, both for the environment, for business as a whole, and for the end consumer. Although currently in Latvia we are still halfway to sustainable beverage production, a big step has already been taken – the introduction of the deposit system at the beginning of 2022. According to the data of SIA “Depozita pakaka operators” (DIO), at the end of 2022, the total amount of collected packaging was 80%, which is a very good result for the first year of operation. First of all, it is a great benefit for the environment, helping to collect packaging and not polluting the nature, secondly, it allows us to reduce the total amount of waste in a couple of years, because everything we can collect in the deposit system can be recycled and new packaging material can be created from it again. According to the DIO data, the goal of 2023 is to reach 88% of the total volume of deposited packaging, while the three-year goal is to reach the indicator of a “mature” system, which is 90%.

Of course, as in any industry, there are challenges in the production of beverages – firstly, any change in the flow of materials is an extremely complex and complex process, for example, a deposit system in supply chains. Similarly, the transition to a new, more environmentally friendly packaging is a large-scale logistics “exercise”, to plan everything so that the transition happens smoothly and efficiently, without affecting the availability of products.

Our sustainability goals include a complete transition to 100% recycled, recyclable or reusable packaging by 2025. Currently, about half of our PET packaging products sold in Latvia are produced using recycled materials. The transition to more environmentally friendly packaging does not require any significant additional investment for us as a manufacturer, apart from a lot of testing, but each such greener solution increases the cost of packaging. This means, compared to virgin materials, it is the need to invest a lot of money in material collection and recycling to re-produce high-quality packaging material. Although currently the recycling technologies in Latvia are not yet so developed and available on a scale that would allow equalizing the prices of recycled material and new material, it is hoped that over the years it will improve and we will reach a level where recycled packaging is, if not cheaper, then at least the prices comparable to raw material.

In order to create a sustainable future, not only reducing the impact on the environment, but also contributing to the well-being of society and the economy, it is important in the beverage industry to perceive sustainability not as a strategy, but as a core value that determines the direction of all actions and decisions. In general, the future of the sustainability of beverage production will continue to be shaped by a combination of key requirements – renewable energy, more efficient logistics solutions, consumer demand for environmentally friendly products, which means an increase in the use of sustainable materials and packaging, and the continuous development of new technologies.