By Cath Isabedra

The beverage industry, like many others, is under increasing pressure to adopt sustainable practices that minimize their impact on the environment. As consumers become more aware of the environmental impact of their purchasing decisions, there is a growing demand for sustainable products and processes. This has led many companies across the beverage industry to focus on sustainability as a core part of their business strategy. 

One of the ways is by adhering to a circular economy. This means moving away from a linear model of production and consumption, where resources are used and then discarded, to a more circular model that promotes the reuse and recycling of materials. 

Adopting a circular economy approach can bring many benefits to the beverage industry. It can help companies reduce waste, lower costs, and create new revenue streams. It can also help reduce the environmental impact of production, from reducing carbon emissions to conserving water resources. 

In this context, companies in the beverage industry must take a holistic approach to sustainability, looking at their entire supply chain from raw materials to consumer disposal. The adoption of circular economy principles can help create a more sustainable and resilient beverage industry that benefits both the environment and the bottom line. 

As we continue to face global challenges such as climate change and resource depletion, the beverage industry and other industries must take a proactive approach toward sustainability. Adhering to circular economy principles can be a powerful tool in achieving this goal and creating a more sustainable future for all. 

Asia Food Journal had the opportunity to interview Alan William Smith, Chief Supply Chain Officer, Suntory Beverage & Food Asia Pacific, who shared how their company is making huge strides in sustainability.  

How is Suntory Beverage contributing to making the circular economy possible?   

Over the last few years – buoyed by the rise of the conscious consumer and regulatory movements – we have seen a concerted push across beverage companies to scale green efforts, with a recent IDC industry report indicating nearly 30 percent of F&B decision makers putting eco-friendly products as a top factor for organisational change.    

This has undeniably fuelled great changes in bringing sustainable packaging to the masses, including integrating materials like compostable paper and mono-material plastics that make recycling processes, or the circular economy, more seamless and cost-efficient.    

For the most part, amendments to food packaging standards by authorities across Thailand, Vietnam, and South Korea, have supported ongoing efforts to make recycled polyethylene terephthalate (rPET) bottles become a mainstay in the industry. These nationwide changes will likely create steady investments to bolster manufacturing and recycling infrastructures within the F&B ecosystem to support its heightened production.    

At Suntory Beverage & Food Asia Pacific (SBFAP), we recognise the immense potential that rPET has in supercharging climate change efforts – giving rise to our goal to implement 100 percent sustainable PET bottles globally by 2030  have since steadily climbed, with efforts made by Suntory PepsiCo Vietnam Beverage, our joint venture with PepsiCo, to launch the first-ever rPET, in addition to producing our Pepsi and Pepsi Zero bottles in 100 percent recycled materials.  

Our efforts to bolster the groundwork in Vietnam’s sustainability journey with greener packaging innovations have already succeeded. In 2022 alone, we have reduced up to 20 percent plastic weight in the packaging of products such as Oolong Tea+ and Aquafina, etc., saving about 2,435 tonnes of plastic.    

At the same time, we are also working closely to pave the way for rPET in Thailand. This includes trying out different recycled resins to put quality, cost-friendly, and safe products on the shelves.    

Our work to drive the circular economy is ongoing, which is why SBFAP continues to complement our advancements in rPET with recycling initiatives, from making a conscious effort to adopt green practices in our own offices – with our Singapore office recycling 2,225kg of waste in 2022 and partnerships in Thailand to educate employees on how to properly segregate waste – to continued collaboration with industry leaders like the Indonesia Packaging Recovery Organisation to recycle polypropylene plastic waste.    

Above all, we firmly believe that innovation and a strong inter-industry network are key to ensuring a seamless transition away from plastic usage. While this cannot happen overnight, every step taken by F&B players toward this can make a world of difference in combatting climate change.    

What challenges have beverage companies faced while transitioning to sustainable packaging?

Rising inflationary pressures, for one, have been a key challenge for industries across the board. While the pandemic fuelled a greater demand for healthier alternatives, innovation in these areas must be simultaneously balanced with investments in R&D.  

Additionally, while more consumers are increasingly conscious about regulating the impact on the environment and willing to spend more on environmentally-friendly products, the say-do gap still exists, and there is still a way to go in education and normalizing these habits to scale these efforts further.    

That said, players within the beverage industry can work to drive advocacy for sustainable products, whether it be partnering with non-profit partners, government organisations, or leaders in other sectors to drive conversations about this issue.  

These same partnerships can also go a long way in making the transition to sustainable processes and greener packaging more cost-efficient, driving seamless pathways to achieve net zero whilst ensuring consumer satisfaction.   

How can beverage companies use their resources to support the circular economy?    

The emergence of the circular economy has pointed to the importance of upcycling materials for zero waste and retaining a product’s life cycle for as long as possible – countering the purpose of disposable plastic packaging being commonplace in the F&B industry. This has brought to light companies’ effects on the environment with their various practices and manufacturing processes.    

In the last couple of years, beverage companies have made strides to make bigger investments in sustainability initiatives, giving prominence to the current impacts they have brought to the circular economy.     

For one, changing consumer perspectives has led to a revelation in the circular economy space. For instance, plastic bottles have turned into cues for automatic responses to recycle or upcycle them, and there is a growing emphasis on prioritising sustainability options in different aspects, be it through their food and drink consumption, clothes, as well as carbon footprint.    

In Asia-Pacific alone, a majority (95%) of consumers are willing to pay more for more sustainable products – with 14 percent of all consumers across Asia-Pacific, Europe, and the US being environmentally and socially conscious.   

Nonetheless, building a circular economy remains a longstanding challenge. With efforts to reduce plastic pollution playing a big part in driving this vision forward, it continues to be a major pain point for the beverage industry, calling for companies to collaborate closely with the government in transitioning towards a circular economy.    

At SBFAP, we have been taking steps to further our 2030 goals of 100 percent rPET, reducing water consumption and CO2 by 30 percent. Beyond increasing our use of recycled content to assess the viability of new materials and sources, we have also been exploring methods to minimise the volume and weight of our packaging, alongside working with industry and governments to improve recycling systems and infrastructure in countries like Australia and New Zealand.    

Furthermore, it is critical for the industry to take collective action to supercharge the circular economy, and that includes employees, who sit at the heart of our business. For instance, over in Thailand, our team worked hard to educate the local community on waste management efforts on Mae Ramphueng Beach (Kon Ao) in Rayong. In addition to installing trash traps to prevent further garbage leakage into the sea, waste separation bins, beach clean-up equipment, and resources about recycling were also provided to safeguard the environment.   

Any other insights you want to share with our readers?   

Pathways to combatting climate change must be multi-faceted. Beyond the circular economy, tackling resource conservation and energy efficiency is also necessary to strike a harmony between people and nature.   

With water being a key aspect of beverage companies, we must play a bigger role in minimising the impact on this resource – from implementing more efficient processes in factories to returning clean water back to nature.  

In recognising this, the Suntory Group strengthened its 2030 water stewardship commitments, including doubling its target to reduce water intensity in owned plants, with plants across SBFAP taking strides to optimize internal processes. Following years of improvements in water efficiency in Australia and New Zealand, we have reached our water savings target nine years ahead of schedule by reducing water usage by 23 percent in 2021. That has helped to save more than 12 million litres of water – the equivalent of five Olympic swimming pools.   

We also continue our efforts in raising awareness about the importance and value of water through our Suntory Mizuiku-Education Program for Nature and Water – a practical nature-based program that collaborates with schools across the globe to empower youths with the knowledge on how they can best conserve water. We believe raising awareness about this cause will fuel collective action in tackling water pollution and scarcity and empower future generations to continue scaling these efforts.   

Since its inception in 2004, the Mizuiku Program has already reached more than 163,000 students across 2,100 schools across the globe, including Vietnam, Thailand, and Indonesia. We are committed to expanding the curriculum and educational resources, developing a Mizuiku teacher guide in Indonesia to further cultivate a water-wise world for all.    

With the global urgency to tackle rising carbon emissions, SBFAP is also making concerted efforts to reduce our carbon footprint across our supply chain. In addition to integrating low-emission coolers, we realized direct energy savings, power factories with solar energy, and implemented co-shipping initiatives to bring sustainable sourcing to the fore.   

Ultimately, climate action is a global effort requiring every sector to recognise its roles and responsibilities in preserving the natural environment. The beverage sector has made great headway in sustainability and must now look to make these solutions bigger, bolder, and better to ensure a cleaner, greener future for all.   

Overcoming Challenges and Driving Advocacy in the Beverage Industry 

The beverage industry has been under increasing pressure to adopt sustainable practices, and one way of achieving this is by adhering to a circular economy. Many companies across the industry are already taking steps in this direction, including Suntory Beverage & Food Asia Pacific (SBFAP), which aims to implement 100% sustainable PET bottles globally by 2030. However, challenges such as rising inflationary pressures and the say-do gap still exist. 

Companies within the beverage industry can address these challenges by driving advocacy for sustainable products and partnering with non-profit organizations, government bodies, and leaders in other sectors.  

By taking a holistic approach to sustainability, looking at their entire supply chain from raw materials to consumer disposal, the industry can create a more sustainable and resilient future that benefits both the environment and the bottom line.  

Adopting circular economy principles can be a powerful tool in achieving this goal. As we continue to face global challenges such as climate change and resource depletion, the beverage industry and other industries must proactively approach sustainability. 

With insights from Alan William Smith, Chief Supply Chain Officer, Suntory Beverage & Food Asia Pacific. He is leading the company’s Supply Chain Management strategy. He is responsible for building an agile, responsive, and resilient supply chain and delivering innovative strategies that differentiate the SBFAP in the highly competitive Beverage sector. 

With over 30 years of experience in the FMCG industry, Alan is highly skilled in creating and executing supply chain strategies for large operations. Prior to Suntory, he was the Vice President, Global Director Benchmarking Productivity with Coca-Cola Far East.