Environment Case Study

CASE SUMAMRY

Founded in 1991, New Belgium Brewing (NBB) is currently run by Jeff Lebesch and Kim Jordan and two main breweries are located in Colorado and North Carolina. The business was inspired while Jeff was on a 1989 bike ride through the Belgian countryside. Core value of the business is that profitability is secondary to a sense of social responsibility. This responsibility is centered on two core concepts: the production of quality beer and beer culture, and a business that can produce this beer while paying attention to environmental and social concerns. Throughout the time, it strived to generated electricity from wind power, reduce water consumption, recycle materials and reduce carbon emissions into the air. Not until 2008 when the company make a breakthrough of substituting the use of cans instead of bottles as previously, did the challenges arise. Two main problems attached to the change are negative effect on brand awareness and damaging content of cans. The question of this case is “whether the company should continue to use cans as an alternative for bottles or not?”

CASE ANALYSIS

1. What are the central facts of the case and assumptions you are making based on these facts?

It includes maximizing energy efficiency, minimizing resource consumption, recycling and reducing environmental effects.

 Maximize energy efficiency

• Wind power

NBB totally uses renewable energy, which is carbon-free wind source in order to reduce its CO2 emissions. The company started purchasing 100% of its electricity from wind power in 1999, which was generated by turbines in Medicine Bow (Energy, n.d). As a result, NBB’s electricity bills were at a premium of 2.5 cents more per kWh than fossil-fueled electricity (at the time, this was 57% more) (Energy, n.d). Since the switch from coal power, New Belgium has been able to reduce its CO2 emissions by 1,800 metric tons per year (New Belgium Brewing Company and the environmental issue, n.d). Therefore, the company became the first fully wind-powered brewery in the US.

• Solar photovoltaic (PV)

Another way that NBB conserves energy is by using solar PV. Actually, NBB has 1,235 those panels, which equates to just about 300 kilowatts of electricity, or roughly 4.5% of our annual electricity needs (Energy, n.d).

• Co-generation

This system will provide electricity to the factory, allowing it to function off the grid for a few hours each day. Moreover, it will also provide heat, which the factory will use to warm the water going back out the water treatment facility (NBB’s Steps to Being Green, n.d).

• Natural draft cooling

The company capitalizes off the cold Colorado weather and replaces glycol-cooled air with naturally cold air in its cold storage unit during the wintertime. NBB plans on using this system in future brewery expansions (NBB’s Steps to Being Green, n.d).

 Minimize resource consumption

• Water

Clean water is a part of the company’s triple bottom line business model. Producing great beer while still caring for the planet and doing what is right is how it operates (We support policies that protect clean water, and here's why, n.d). Therefore, NBB has reduced the water using at every state of production as well as built an onsite process wastewater treatment plant (Carroll, A. B., & Buchholtz, A. K., 2015).

 Recycling

The company has attempted to recycle as much waste as possible such as cardboard boxes, keg caps, office materials, and the amber glass wastes used in bottling. The factory also stores spent barley and hop grains so that local farmers can pick up the grains for free to feed their pigs. NBB even encourages its employees to reduce air pollution by using alternative transportation like bicycles (New Belgium Brewing Company and the environmental issue, n.d)

Studies has shown that over half of all drinking cans are recycled and new cans generally contain more recycled content than new bottles (40% for cans versus 10-30% for bottles) (Bundy, 2013).

 Reduce environmental effects

The use of a can for containing beer as an alternative for a bottle facilitates the reduction of transportation because “transporting a bottle emits 20% more greenhouse gases than transporting a can” (Bundy, 2013)

2. What is the major overriding issue in this case?

In 2008, the company took a big breakthrough in switching from bottles as previously to using cans. This was raising the major overriding issue in New Belgium Brewing (NBB) is “whether the company should continue to use cans as an alternative for bottles or not?” to encourage more consumer recycling and implement sustainable efforts. We can see that the benefits of switching from bottles to cans are unclear but we firstly identified some of its related issues with both bottles and cans:

• Issues of cans:

 Lose customer awareness: NBB was inherent in unique characteristic of style bottle, unique logo and watercolor labels. Thus, by switching to cans, NBB have to change their entire brand image that they have built for a prolonged period. It might lead to a loss of brand awareness in consumers’ brand perceptions. Because customer is prominently an important stakeholder in the company so its sales and profits are probably affected.

 Aluminum:

• Issues of bottles:

 Deposit: Consumers have to pay a deposit on glass bottles and they will receive their deposit back when they return bottles for recycling. However, customers think of the inconvenience of