This Alcohol Brand Is Pivoting And Promoting Water Sustainability

Pernod Ricard believes sustainability in the alcoholic beverages industry often translates into savings and improves profitability

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The alcoholic beverage industry reached $515.2 billion in 2019. Despite the economic slowdown amid the COVID-19 pandemic, the industry is expected to grow at a CAGR of 7 per cent from 2021 and reach $647.7 billion in 2023, according to a report.

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Alcohol beverages brands have upped their game when it comes to sustainability with big and small players unveiling new green strategies and initiatives.

From a billion-dollar sustainability strategy, Pernod Ricard India (PRI) has gone the extra mile when it comes to sustainable practices, the company claims.

The growth of the market is largely attributed to the increase in demand from the global young-adult demographic combined with high disposable income. In addition, consumer demand for premium alcoholic beverage products is also accelerating the growth of the market.

This is being led by millennials and younger consumers who are demanding innovative and higher-end products.

From vodka, gin, rum, and whiskey to brandy, beer, wine, and cider, innovations and product launches in the alcoholic beverages market are also fuelling growth in the sector.

In recent years, sustainability has become more important for all companies, across all industries, including the alcoholic beverages industry.

Sustainability is concerned with the efficient and sustainable use of natural resources, such as energy, materials, fuels, land, water, etc, so they are available for future generations. Environmental sustainability is often an integral part of corporate social responsibility (CSR).

Despite a vast majority of consumers throughout the world dealing with unprecedented economic hardships over the past few months turned into years, now, sustainability hasn’t shown any signs of slowing down in importance. In fact, it’s even grown in importance, according to a recent survey from Genomatica.

Pernod Ricard India chief operating officer Rajesh Mishra in a conversation with Entrepreneur India said, “We realize that water is an essential natural resource that needs a very high degree of respect and protection. We are a firm believer in asserting our commitment to the environment, natural resources, and conversation through systematic and sustainable practices.  Pernod Ricard India is ‘water positive’, which means that we are replenishing more groundwater in the watersheds of our operations than we withdraw, every year. Our steady focus on manufacturing excellence coupled with a shared value creation approach with local communities near our plants has helped us in reducing water consumption in our operations, beyond the fence, we focus on water use efficiency by the community, and also in creating water abundance for sustainable use. At PRI, our water stewardship journey is strongly aligned to the 4R principle – Reduce-Reuse-Recycle-Recharge. Through our Integrated Water Development Programs, we are also contributing towards sustainable production, fostering water resilience with the local communities.”

Not only are these sustainable initiatives the responsible thing to do, but they make good business sense. That’s because sustainability in the alcoholic beverages industry often translates into savings, and seriously improves profitability and the bottom line.

With Water at the crux of social development needs of agri-communities near PRI plants, Pernod Ricard India Foundation’s (PRIF) W.A.L. (Water, Agriculture, and Livelihoods) engages more than 108,000 community members in 120 villages across six states. Across all its projects and initiatives in the W.A.L. program, the company engages with communities primarily around Agri livelihoods and water issues to help them enhance their livelihood, according to Mishra.

To help rural farmers manage water consumption in agriculture and shift away from flood irrigation practices, the program also deploys a comprehensive model supporting the installation of micro-irrigation techniques along with laser land leveling, demonstrating up to 40 per cent reduction in water use.

By 2030, the Group across all its affiliates, including Pernod Ricard India, aim to be water balanced in all high-risk watersheds, replenishing 100 per cent of water consumption from production sites. 

“Focused on boosting water-use efficiency in our operations through a combination of continuous improvement, operational efficiency projects and cultural change, aimed at conserving and reusing water wherever possible, with water reuse, recycling methods, rainwater harvesting systems have resulted in a 54 per cent decrease in total water consumption (2015-20). With our groundwater replenishment efforts, we had replenished 1.2-time more groundwater than we withdrew overall in FY19-20, and this year we hope to reach 2.6-time, at an organizational level, across India,” Mishra commented.

Pernod Ricard India’s topline has been growing at double-digit consistently with very healthy bottom-line growth, strong cash conversion, and profitability ratio, with a sustained level of investment.

“As the leader in premium products, we aspire to provide bespoke or differentiated consumer experiences and product offerings. We also foresee interesting trends emerging with the resurgence of Gin and growing conversation around this versatile white spirit. We will continue to invest in innovation, to enhance consumer experience and set new trends. We are building a sustainable and responsible organization focusing on each aspect of its products and human well-being, from grain to glass,” he further elaborated while explaining his vision for the immediate and long-run future.