As sustainability continues to be top-of-mind for both consumers and businesses, Diageo has found success with a one-step-at-a-time approach when it comes to building a sustainability and community outreach infrastructure, according to Ed Pilkington, CMO and innovation officer at Diageo North America.
“All businesses need to be really committed and set pertinent goals,” said Pilkington, during an Oct. 19 panel at Advertising Week titled “How Sustainability Efforts are Taking on Greater Importance for Beverage Alcohol.”
Over the course of the discussion, Pilkington detailed the alcohol conglomerate’s increased focus on sustainability and how it supports its Society 2030: Spirit of Progress Plan, which encompasses 25 key goals spanning areas such as sustainability, diversity and responsible drinking and is based on the United Nations’ Sustainable Development Goals.
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While at first glance, alcohol may not seem a large contributor to climate change compared to other industries such as plastic goods and oil, the amounts of water, grain and energy needed to produce alcoholic beverages can be enormous. These environmental concerns have enticed many brands to take steps to become more environmentally friendly. For Diageo, which has a large portfolio, a one-size-fits-all approach to sustainability would be impossible, so each brand adjusts its goals slightly, per Pilkington.
For example, Johnnie Walker, one of the most popular Scotch whisky brands in the world, eliminated the outer packaging for its Black Label brand, thus removing 180 million boxes from the supply line. Additionally, the brand has undertaken several initiatives supporting women athletes and entrepreneurs.
“We've got more to do in terms of how we show up,” Pilkington said.
Several production-related processes have also undergone an environmental shift, he continued. For example, bourbon barrels can only be used once, meaning trees are cut down for what ultimately leads to very little product. In response, Diageo has enlisted new processes, including planting a new tree to replace what is cut down. After those barrels are used by bourbon brands such as Bulleit, they are also recycled to other brands in Diageo’s portfolio, such as Cardhu, where there is no limit on how many times a barrel can be used.
“The other thing we do, there's a lot of regeneration of casks ... We've got a whole program in Scotland where we regenerate cask,” Pilkington elaborated in a post-panel interview with Marketing Dive.
Diageo has also made an attempt to put its Society 2030 mark on its new partnership with the NFL. Diageo is the first official spirits sponsor of the league, and responsible drinking has been at the forefront. Crown Royal, which is one of the brands at the center of the NFL partnership, frequently advocates for a “water break,” reminding fans to take a break from drinking during the game.
Integrating its new plan means Diageo has to weigh the odds on surviving a hit to its bottom line, Pilkington said. The company faced such a cost-benefit dilemma with its newly opened carbon-neutral distillery in Kentucky. The company is also debating how to make Baileys Irish Cream without cows milk and whether to continue using peat, a natural energy source, in whiskey production while the United Kingdom faces an energy crisis where such a resource could help families live comfortably.
“It comes down to smart people who work in our operations on supply in Scotland who are really looking at how we address that,” said Pilkington. “The last thing we want to do is use peat to make whiskey, when people can't heat their homes thoroughly. We're looking at how to get more efficiency out of the peat.”
