Major brewer focuses on grain grown sustainably by farmers

Australia’s largest beer business will soon buy barley from farmers who have gathered data about how sustainably their grain was produced.

A group of grain growers from northern New South Wales has agreed to provide Japanese-owned Asahi with information relating to 21 environment, social and governance (ESG) metrics about how the crop, currently in the ground, was produced and harvested.

The reporting is expected to include verifiable data relating to farm emissions, crop rotations, area or protected habitat, local spend and compliance with modern slavery regulations.

Regional head of procurement at Asahi, David Engel said shareholders, consumers and customers were seeking more information about how their drinks were produced.

“This will be the first time growers are actually measuring on-farm metrics to this level and actually able to report on what’s happening, so we’re really excited about what we’ll learn,” Mr Engel said.

“I’m sure we’ll learn things that that we didn’t expect, and we’ll have to course correct and pivot on what we need to focus on, but that’s the beauty of learning.”

Getting on the ESG ‘bus’

Australian farmers are forecast to harvest close to 55 million tonnes of winter crop this year.

Moree farmer Stuart Tighe said the growers would produce malting barley for Asahi’s Yatala brewery, Australia’s largest.

He said by providing ESG accounting they were attempting to “de-commoditise a commodity”.

“If you can make your product slightly different, then often you can add a value or get a premium or do something that brings value to your business because of it,” Mr Tighe said.

As co-founder of the Pure Grain Network, he has worked with farmers and Asahi to establish a framework by which the ESG metrics will be reported.

“You have to start somewhere and if you don’t start today, you don’t know what’s available in two to five or 10 years’ time,” he said.

“I don’t think ESG is going away, so getting on the bus, starting the journey now will help understanding where you are in relationship to your peers and others … it’s all an important part of it.”

‘Good business sense’

Sustainability consultant Catherine Marriott has spent the past two years travelling the world examining the implications of ESG policy on agriculture as a Nuffield Scholar.

She agreed the trend was on the rise.

“And when I asked, they were like, ‘Oh no, no it’s just a licence to do business.'”

She said Australian grain growers were considered among the most sustainable and efficient in the world as they did not receive government subsidies.

She called on growers to consider ESG as more than being environmentally friendly.

“Sustainability to me means having a long-standing business over time that’s got longevity, which involves multiple pillars like economics, environment, people, animal welfare, that sort of thing,” she said.

“And I think … that’s what sustainability is. It just is good business sense.”

Reducing emissions

Asahi manufactures beers including Great Northern, Carlton Draught and VB, as well as soft drinks Pepsi, Gatorade and Schweppes.

The business, which is publicly listed in Japan, has made a commitment to reduce Scope 3, or supply chain, emissions by 30 per cent by 2030.

More than 90 per cent of Asahi’s emissions come from its suppliers, including grain growers.

Mr Engel said malt accounted for about 7 per cent and barley less than 4 per cent.

“It doesn’t sound like a lot, but when we’ve got the targets that we’ve got, to really drive emissions across the supply chain, that’s pretty hard,” he said.

He also said it was important sustainability could be measured.

“I think people sort of say, ‘We’re already doing the right thing. Why can’t we just accept that that’s the case?'” Mr Engel said.

The decision by Pure Grain Network growers to provide ESG verifiable data comes as the federal government is expected to launch its sector plan for agriculture to help Australia become net zero by 2050.