BEAM BUILDING BRANDS AND PROTECTING THE ENVIRONMENT YESTERDAY, TODAY AND TOMORROW

Transcription

1 BEAM BUILDING BRANDS AND PROTECTING THE ENVIRONMENT YESTERDAY, TODAY AND TOMORROW 1

2 2 TABLE OF CONTENTS A Message from our President & CEO 3 Our Commitment to Environmental Sustainability 4 Statement of Environmental Sustainability 5 Beam Brands and ISO 14001:2004 Environmental Management Systems 6 Our Brands Today Water Sauza Tequila 7 Cruzan Rum 8 Teacher s Blended Scotches 9 Energy Larios Dry Gin and DYC Whisky 10 Maker s Mark Bourbon 11 Fundador and Centenario Brandies, and Harveys Bristol Cream Sherries 12 Reduce, Reuse, Recycle Jim Beam Bourbon 13 Value Engineering 14 Beam Worldwide Headquarters 15 Future Environmental Sustainability at Beam 16

3 3 BUILDING BRANDS AND PROTECTING THE ENVIRONMENT YESTERDAY, TODAY AND TOMORROW Our history dates back to 1795 and is based on a heritage of entrepreneurship, innovation, craftsmanship and quality in building brands we can all be proud of. It s these same values we apply to our focus on the environment. For hundreds of years, and for generations yet to come, two main ingredients drawn directly from the earth s precious natural resources are at the core of nearly every brand we create: water and grain. Our brands depend on the environment, and our commitment at Beam is to conserve our planet s natural resources. Conserving the environment is simply the right thing to do. I am pleased that our Beam environmental sustainability efforts go above and beyond the standard environmental regulations. One example is the recovery of spent grains and agave fibers for additional uses such as animal feed, compost or dust suppressant. We also reuse water and invest in co-generation power and renewable energy facilities to reduce energy consumption and costs. Environmental sustainability ideas come from every part of our organization and are ingrained in our strategy and in the markets in which we do business. Our focus on the environment is emphasized by the Beam Environmental Management Committee, with its strategy to continuously improve our environmental sustainability footprint and exceed our own high standards. Sincerely, Matthew J. Shattock President & Chief Executive Officer We recognize that the roots of Beam s sustainable efforts reach far into our history. They have manifested themselves in our values and, as a result, in the stories and success of our brands today. As we pursue our vision of crafting the spirits that stir the world, our tie to the environment and its precious natural resources will remain everlasting and so too will our commitment to sustaining it.

4 4 OUR COMMITMENT TO ENVIRONMENTAL SUSTAINABILITY Our commitment to environmental sustainability starts with leadership, which is why the Beam Environmental Management Committee (EMC) includes cross-functional, cross-geographic representation from operations & supply chain; environment, health & safety; legal; public affairs; and communications. The responsibilities of the committee are to provide governance, alignment and direction to the entire Beam organization as the ultimate stewards of our environmental commitment. Our vision is to leverage our foundational approach to sustainability in which the environment is integrated with the management of the business. We ultimately want to create more value in our business with a positive, lasting effect on the environment. To activate plans, our global technical steering team sets direction, allocates resources and ensures clarity around responsibilities. Project teams at our facilities provide on-the-ground support with their focus on three primary areas of progress: WATER: We are committed to reducing our rate of water usage per unit at facilities around the world. In addition, we are conducting long-term fresh water planning. ENERGY: Our efforts are focused on improving the efficiency and effectiveness of our combustion processes and reducing our per unit energy consumption at all of our facilities. REDUCE, REUSE, RECYCLE: Value engineering is a significant contributor to reducing usage and preventing waste, while process improvements throughout the organization drive our reuse and recycling efforts. Our project teams collaborate to align around a common approach to leverage our expertise globally and deliver performance improvements. They establish global standards to protect our people, our brand assets and the planet. They also focus on the continuous improvement of our systems, processes and capabilities to maximize the value we add and to protect the environment. The Beam Environmental Management Committee provides the appropriate level of governance to ensure our environmental sustainability commitments are met, while the working groups and plant teams are the engines that drive the improvements. Steve Lutes, VP Global Technical Services We accelerate our progress in all three areas through active participation in the Beverage Industry Environmental Roundtable (BIER), a coalition of beverage industry companies working together on environmental initiatives. Through our affiliation with BIER, we are able to share and access best practices and benchmarking in areas of Water Footprinting and Energy & Climate Change Mitigation. Throughout the three regions of our business North America, EMEA (Europe/Middle East/Africa) and APSA (Asia-Pacific/South America), and at each of our facilities, members of the Beam team have the opportunity to add to the positive environmental impact at their location. Initiatives include local efforts such as recycling mobile phones and batteries, conserving paper and much more.

5 5 STATEMENT OF ENVIRONMENTAL SUSTAINABILITY To continuously reduce the impact of our operations on the environment by embedding environmental sustainability into all of our business processes and practices. Building a sustainable business and protecting the environment is the way we operate every day. Our goal is to continuously reduce the impact of our operations on the environment, while we deliver value throughout the business. We expect all employees at every location worldwide to conduct business according to the following principles. Environmental management systems will be regularly reviewed and modified to provide appropriate training to maintain ongoing compliance and to adopt best practices. Employees will be educated and informed regarding environmental issues and their business relevance. Employee participation and engagement in programs to mitigate environmental impacts will be encouraged and developed. We have great stories in our brands stories that show we re doing right by our brands and the environment. John Walter, Director of Public Affairs, International All units will conduct their operations in strict compliance with applicable environmental laws and regulations. We will optimize processes that impact the environment and reduce the generation of waste or pollutants. Technically sound and economically viable control methods, procedures and processes will be employed to reduce environmental impact. Process innovation will be employed as a Beam way of working to reduce the use of non-renewable natural resources, the generation of waste and discharges into the environment. Reduce, reuse and recycling programs will be utilized. Procurement strategies will include the use of environmentally friendly products and materials that are consistent with quality objectives, including the use of recycled, recyclable or reusable products. We will communicate with stakeholders regarding environmental issues that impact our business and operations. We will work collaboratively with governmental and non-governmental agencies to develop equitable and effective environmental regulations.

6 6 BEAM BRANDS AND ISO 14001:2004 ENVIRONMENTAL MANAGEMENT SYSTEMS All of Beam s manufacturing locations have earned ISO 14001:2004 certifications, which is the most recognized international standard of environmental management systems. Facilities use the requirements of ISO 14001:2004 as a management tool to: Identify and control the environmental impact of its activities, products or services, Improve its environmental performance continually, and Implement a systematic approach to setting and achieving environmental objectives and targets. Compliance is about expectations. We go beyond expectations to add value in our brands and communities. Rick Price, Director, Environment, Health and Safety Brands produced at our ISO 14001:2004 facilities around the world include: BOURBONS Jim Beam Kentucky Straight Bourbon Whiskey Jim Beam Black Kentucky Straight Bourbon Whiskey Jim Beam Choice Kentucky Straight Bourbon Whiskey Maker s Mark Bourbon Knob Creek Straight Bourbon Whiskey Red Stag by Jim Beam Devil s Cut by Jim Beam Basil Hayden s Kentucky Straight Bourbon Whiskey Booker s Kentucky Straight Bourbon Whiskey Baker s Kentucky Straight Bourbon Whiskey WHISKIES Canadian Club Whisky Teacher s Scotch Whisky Laphroaig Islay Single Malt Scotch Whisky DYC Whisky Ardmore Traditional Cask (ri)1 Straight Rye Whiskey Alberta Premium Canadian Rye Whisky Beam s Eight Star Blended Kentucky Whiskey Jim Beam Straight Rye Whiskey TEQUILAS, RUMS AND VODKAS Sauza Tequila Sauza 100 Anos Tequila Sauza Hornitos Tequila Sauza Tres Generaciones Tequila Cruzan Rum Pucker Flavored Vodka BRANDIES, CORDIALS AND GINS Courvoisier Cognac Fundador Brandy Terry Centenario Brandy Terry 1900 Brandy DeKuyper Cordials and Liqueurs Leroux Cordials and Liqueurs Harveys Bristol Cream Sherry Larios Dry Gin Jim Beam and Cola

7 7 OUR BRANDS TODAY WATER BRAND: SAUZA TEQUILA LOCATION: JALISCO, MEXICO SUSTAINABILITY ACTION: REMOVING 99.1 PERCENT OF ORGANIC MATERIAL FROM PROCESS WATER Sauza is the second largest premium tequila in the world. The brand portfolio includes Sauza Blanco and Sauza Gold, as well as the following 100 percent agave products: Sauza Blue, Hornitos and Tres Generaciones. A harvest of agave can create 40,000 metric tons of waste fibers annually, which can end up in landfills. This is not the case for Sauza tequilas. Sauza built a water treatment plant that removes 99.1 percent of the organic materials from the wastewater. An aerobic process is used in an additional treatment to produce water quality that exceeds regulatory requirements. In addition, the treatment plant converts organic material into a reusable biogas, which offsets the use of non-renewable resources. The spent agave fibers recovered from the tequila making process are used to produce compost. The compost from the reclaimed agave fibers improves the water holding capacity of sandy soils while reducing erosion and runoff. Therefore, Sauza conserves water while it develops a natural source of nitrogen and nutrient-rich phosphorus material for growing the agave plants.

8 8 WATER BRAND: CRUZAN RUM LOCATION: ST. CROIX, VIRGIN ISLANDS SUSTAINABILITY ACTION: ACHIEVING ZERO PROCESS LIQUID WASTE DISCHARGE In 1760, a sugar mill began crushing cane at the current site of the Cruzan Rum distillery on the island of St. Croix. Today, Cruzan produces a diverse portfolio of premium rum products with only the finest ingredients and all-natural flavors, including high-quality molasses. Cruzan is the first true molasses-to-rum distillery to build a system and capability to achieve zero process liquid waste discharge. This milestone was achieved in partnership with the local government and regulators to significantly change the treatment process. Using an evaporator system, Cruzan is able to use by-products of molasses after distilling to produce condensed molasses solubles (CMS). Instead of creating waste, the CMS is sold as animal feed, or for other beneficial reuse such as dust suppressant, in the southeastern United States. The creation of CMS eliminates 94 metric tons of waste from the landfill each year. Additionally, the wastewater treatment plant will reduce fresh water usage by about 38% through the use of innovative water reclamation technology.

9 9 WATER BRAND: TEACHER S BLENDED SCOTCHES LOCATION: RAJASTHAN, INDIA SUSTAINABILITY ACTION: REDUCING WATER CONSUMPTION BY 33 PERCENT The blending and bottling facility in Rajasthan, India serves this growing market for Beam with Teacher s Highland Cream, Teacher s Origin and Teacher s 50 blended Scotch whiskies. This area has a generally dry climate, with only approximately 40 days of rain annually. At the bottling operations, the focus on water conservation has produced many tangible benefits. Water consumption has been reduced by 33 percent in just 12 months as a result of recycling water used in the packaging process. In production, bottles are rinsed with water before being filled. The use of a filtration and purification system enables recycling of this water. Additionally, runoff rainwater is harvested for the purpose of recharging the aquifer onsite. Plans each year are developed to build on the comprehensive water conservation success at Rajasthan.

10 10 ENERGY BRANDS: LARIOS DRY GIN AND DYC WHISKY LOCATION: SEGOVIA, SPAIN SUSTAINABILITY ACTION: IMPROVING ENERGY EFFICIENCY BY 30 PERCENT Larios Dry Gin is the number one seller in its category in Spain, and DYC was the first whisky to be produced in Spain. Both Larios and DYC are produced at our distillery in Segovia, located north of Madrid. Energy is produced through a combined heat and power plant cogeneration. The heat and electricity are used in the distilling process, and surplus electricity is sold to the local utility company. In fact, about 95 percent of the electricity produced is sold to the utility company. In operation for three years, the cogenerative power plant is documented to improve energy efficiency by 30 percent and reduce the cost of energy by about 50 percent a proven example of how we create more value in our business with an ever-diminishing impact on the environment. As a result, the carbon footprint is reduced at the Segovia distillery.

11 11 ENERGY BRAND: MAKER S MARK BOURBON LOCATION: LORETTO, KENTUCKY, USA SUSTAINABILITY ACTION: REDUCING FUEL CONSUMPTION BY 20 PERCENT WITH RENEWABLE ENERGY The Maker s Mark distillery was named a national historic landmark in 1980, and the site consists of 620 acres, most of which is maintained as a nature preserve. When assessing the potential for expanding the distillery, the company also evaluated opportunities to develop a solution that would not increase the carbon footprint. A system was designed and built for managing stillage waste. The anaerobic technology treats the water and produces biogas. One of the outcomes is the capability to use biogas, a renewable fuel, to replace natural gas. This results in a near 20 percent reduction in natural gas usage at the distillery. In addition, the system allows for the reuse of the distiller s wet grains for animal feed. These efforts are the perfect blend of building value for the Maker s Mark brand, while reducing the impact on the environment including the site itself, which is protected by a forest stewardship plan. Maker s Mark extends this stewardship to visitors, who are educated on the types of trees, plants and flowers at the site.

12 12 ENERGY BRANDS: FUNDADOR AND TERRY CENTENARIO BRANDIES AND HARVEYS BRISTOL CREAM SHERRIES LOCATION: TOMELLOSO, SPAIN SUSTAINABILITY ACTION: REPLACING 40 PERCENT OF NATURAL GAS WITH RENEWABLE ENERGY The distillery in Tomelloso produces concentrates and wine spirit for Fundador and Terry Centenario brandies, as well as for Harveys Bristol Cream sherries. Working with the local government and regulators in 2008, leaders at the Tomelloso distillery explored alternatives for water treatment. The decision was made to improve the site s facilities with anaerobic technology. The new treatment operations started in 2009, gradually building capability and capacity to convert effluent streams, which would have gone to a municipal treatment plant, into a renewable energy source biogas. When operating the system at full capacity, enough biogas can be produced to replace 40 percent of the natural gas demand at the distillery. The achievement resulted in a renewable energy source and an impressive reduction in the carbon footprint at Tomelloso.

13 13 REDUCE, REUSE, RECYCLE BRAND: JIM BEAM BOURBON LOCATION: CLERMONT, KENTUCKY, USA SUSTAINABILITY ACTION: ACHIEVING A COMPREHENSIVE APPROACH Jim Beam is the number one selling premium bourbon in the world. At the Clermont distillery where Jim Beam bourbon is produced along with other handcrafted bourbons, such as Knob Creek the approach to environmental sustainability is part of the tradition of the brand that dates back to Through a series of filters on coal fired burners, scrubbers on the grain dryers and dust collectors on the grain handling system, Beam reduces particulate matter emissions at an efficiency rate of 99 percent. Also to reduce emissions, Jim Beam utilizes clean coal technology. The use of high-quality Kentucky coal and advanced emissions controls produce air quality that is far better than what is required by state and federal law. Our commitment to clean coal technology extends to the coal ash from our boilers as well, which is beneficially reused in the production of cement. This ensures that the maximum benefit of this natural resource is realized. The Jim Beam Nature Preserve, a 155-acre site located along the Kentucky River Palisades near Frankfort, Ky., was created in conjunction with the Nature Conservancy in 1995 to celebrate our 200th anniversary. Jim Beam has also completed multiple stream bank restoration projects using natural and bio-engineering practices, and has worked to develop and preserve many acres of wetlands for perpetuity. Examples of reusing materials include recovering spent grain from the distillation process for reuse as animal feed and re-circulating water for cooling. The site s comprehensive recycling efforts include glass, paper, cardboard, wood pallets and many other everyday products. In addition to operating within Environmental Management System certification guidelines, local leadership promotes sustainability in forestry and in fisheries, all of which continues the great traditions started by our founder, Jacob Beam, more than two centuries ago.

14 14 REDUCE, REUSE, RECYCLE BRANDS: THE PORTFOLIO OF BEAM BRANDS LOCATION: COMPANY-WIDE SUSTAINABILITY ACTION: COMBINING ENVIRONMENTAL SUSTAINABILITY AND COST REDUCTION THROUGH VALUE ENGINEERING The primary focus of value engineering, which combines sustainability with cost management, is to prevent or remove waste from the business. It is at the heart of the Beam sustainability effort as this practice works to minimize use of scarce resources and prevent pollution. Value engineering allows us to maintain the quality of our products while reducing the usage of natural resources. Value engineering achieves the goal of delivering value to our customers and shareholders while reducing the impact on the environment. Results of value engineering include: Designing lighter weight bottles to achieve a 7.4 percent reduction in weight, also resulting in less breakage Converting glass flasks to PET to reduce the overall case weight by 50 percent Reduction of non-value added packaging by eliminating the partition The value in value engineering goes beyond simple cost reductions. Value engineering is also the collaborative spirit at Beam to promote environmental sustainability across all parts of the organization. Whether the challenge involves removing waste, reducing energy consumption or recycling raw materials, sustainability is our chance to make the environment better for future generations. Don Hardwick, VP Global Supply Chain between bottles in the shipper case to achieve a 22 percent reduction in packaging which results in the elimination of 1 million pounds of corrugate annually By reducing material use and weight, there is a reduction in costs of freight for Beam and distributors. Many of the initiatives highlighted on previous pages also benefited from value engineering ideas, including those of Sauza Tequila, Maker s Mark Bourbon, Larios Gin and DYC Whisky.

15 15 REDUCE, REUSE, RECYCLE BRANDS: THE PORTFOLIO OF BEAM BRANDS LOCATION: DEERFIELD, ILLINOIS, USA SUSTAINABILITY ACTION: RECYCLING 60 PERCENT OF MATERIALS IN CONSTRUCTION Starting in October 2010, Beam began a three-phase renovation project at its headquarters to develop a workspace that builds collaboration among employees, utilizes the latest technology and reduces the use of energy. With an open office design, there are informal meetings spaces, seating areas for meals and expandable large meeting rooms for employees to share knowledge. The technology includes interactive audio visual, wireless internet, multi-functional printers and electronic smart boards which also expand the opportunity for sharing knowledge while incorporating energy efficient features. Environmental sustainability is a part of our company s DNA going back hundreds of years. Incorporating energy efficient features at our corporate headquarters and emphasizing recycling throughout our workplace are just the latest examples. Kent Rose, SVP General Counsel and CAO To improve energy efficiency, the open office design maximizes natural light with a light harvesting system. Photo cells in the system measure sunshine to automatically dim lights when certain levels of natural light are achieved. In addition, a digital smart system monitors and operates the HVAC system more efficiently. The intent is to reduce the overall use of energy per square foot. In the first phase of the project, the old office space was dismantled. Instead of sending the steel, wood, cardboard and other materials to a landfill, approximately 60 percent of what could have been waste was recycled. Some of the furniture was donated to non-profit organizations to be reused, and existing cabinets were refurbished and reused in the new office space instead of going to waste. While improving the office space for employees to work on building the Beam portfolio of brands, the headquarters project showcases the company s position on environmental sustainability from the start of the project and continuing after the renovation is completed in 2012.

16 16 FUTURE ENVIRONMENTAL SUSTAINABILITY AT BEAM Through cross-functional coordination, the Environmental Management Committee continuously identifies ways to improve Beam s environmental sustainability efforts and, in doing so, exceed government regulations. We are building a steady track record of measurable results and will continue to do so with four promises. Conserving our natural resources is the right thing to do to. We will pursue continual improvement opportunities, especially in the areas of water, energy and waste, to reduce the impact of our business on the environment. Second, our environmental sustainability plans will align with our business strategy. Our responsibility is to always ensure that our environmental and business strategies work together to create value for the company and leave a positive impact on our planet. Third, we will make a difference and contribute in a meaningful way to the rich heritage of our brands and the great communities where they re produced. Fourth, we must ensure compliance, which is the foundation of all environmental sustainability efforts. We will ensure that we meet these obligations and then go beyond. After all, we have to meet and exceed the expectations of our employees, customers, consumers and communities to build brands people want to talk about. We will always emphasize that by doing the right thing for the environment, we will do what s right for the company. Our environmental sustainability efforts will continue because we have the commitment from all the people of Beam. We invite Beam team members, customers and consumers around the world to uphold our environmental commitment and voice their ideas for sustainable improvements. - The Beam Environmental Management Committee We are part of a business that traces back to Sustainability and being a custodian of the environment are part of our everyday jobs. Ian Gourlay, SVP Global Operations and Supply Chain BEAM LOCATIONS Global Headquarters Beam, Inc. 510 Lake Cook Road Deerfield, IL (847) Loretto, KY Clermont, KY Frankfort, KY Boston, KY Louisville, KY Alberta, Canada Toronto, Canada Windsor, Canada Jalisco, Mexico St. Croix, U.S. Virgin Islands Glasgow, Scotland Isle of Islay, Scotland Aberdeenshire, Scotland Wiesbaden, Germany Frankfurt, Germany Tomelloso, Spain Madrid, Spain Jerez de la Frontera, Cadiz, Spain Segovia, Spain Jarnac, France Sydney, Australia Auckland, New Zealand New Delhi, India Rajasthan, India Mountbatten Square, Singapore