Strategic Analysis of Water Use in the Beverage Industry

Water is an essential component in beverage industry products. As a result, companies face a material risk to their businesses from issues such as water quality, water scarcity, water pricing mechanisms, regulations for wastewater disposal, and community perception. However, at this time the nature and extent of the risk beverage companies face is not widely understood, particularly on a sub-national level. The objective of the project is to look at the role of water and risk within the value chain of the beverage industry, understand trends in water sourcing, treatment, and wastewater discharge, highlight risk mitigation and water use reduction opportunities and identify potential gaps where Dow Water & Process Solutions could leverage its existing product portfolio or develop new products to help address issues of water scarcity and quality. To meet the project’s objectives three specific analyses were conducted: calculation of the water footprint for a standard beverage, identification of business risks, and application of potential technological solutions. Additionally, the team visited two types of facilities in the beverage industry value chain, interviewed a number of agricultural experts and conducted a wealth of secondary research. As a result of the above approach crop cultivation was identified as the largest contributor to the water footprint of sweetened carbonated beverages. Furthermore, by examining crop cultivation in a state with such highly diverse crop cultivation methods as Nebraska, the team was able to identify and assess a number of risks, which may be applied to other areas where crop cultivation provides agricultural inputs for the beverage industry. 2 Based on the research, analysis suggests that beverage companies should examine the water risks posed and faced by the crop cultivation segment of their value chain. To this point, though the specific risks are likely to vary by company, companies can utilize the analytical approaches used in this report to assess their risk and identify opportunities to mitigate risk and reduce water use.Master of Science (MS)Natural Resources and EnvironmentUniversity of Michiganhttp://deepblue.lib.umich.edu/bitstream/2027.42/90925/1/MP_WaterRiskReport_Final_Delivered.pd