Increasing optimism and opportunity with a splash of insularity. Fast-paced innovation and growing accountability with a twist of stakeholder pressure. Big gains shaken and stirred with mounting challenges.

According to sustainability leaders at some of the world’s leading beverage companies and industry associations, these sentiments paint a vivid picture of the beverage industry’s environmental sustainability landscape.

These leaders are proud of the incredible progress that’s been made—but they’re well aware that more needs to be done to protect natural resources, societies, businesses, and ecosystems in the face of climate change. These leaders are members of the Beverage Industry Environmental Roundtable (BIER), a coalition of global beverage companies and organizations working together to advance environmental sustainability across the industry and beyond.

Recently, four BIER members shared their thoughts on the greatest sustainability opportunities and challenges shaping the future of the industry, as well as their insights on what organizations across the industry spectrum can do to build a stronger sustainability foundation.

Those members include Al Halvorsen, Sr. Director of Environmental Sustainability at PepsiCo, Andre Fourie, Global Water Director at AB InBev, Nick Martin, Executive Director at BIER, and Kate Krebs, Senior Environmental Policy Advisor at American Beverage Association of the American Beverage Association (ABA). Read what they had to say.

Emerging Opportunities & Intensifying Challenges

Q: What emerging or rising trends present the greatest sustainability opportunities for the beverage sector? What about the biggest challenges or disruptions?

Al Halvorsen (PepsiCo): Perhaps one of the biggest opportunities is connecting our sustainability efforts to the brand, and really making it brand-centric and customer-relevant. As far as challenges go, a big one is plastic and single-use packaging—mostly around the fact that the industry and consumers aren’t doing a great job of recycling. The challenge here is closing the loop on that, as well as addressing how it interconnects with the other challenges we face thanks to climate change.

Andre Fourie (AB InBev): For one, the importance of the supply chain. It’s something many companies talk about, but I’m not sure every company in the sector has a full appreciation of the sustainability challenges and opportunities that reside there.

Secondly, consumer engagement in the sustainability journey is both an opportunity and a challenge. Not only can engagement add value to the company, brands, and products, but also create genuine connections with companies and their sustainability efforts. Consumer interests are changing. Sustainability provides a unique lens to connect with changing consumer demands.

Nick Martin (BIER Executive Director): The BIER member companies have worked diligently on sustainability for a long period of time at this point. In doing so, each company has established a foundation of experience, culture, and leadership commitment. This unique sector maturity has positioned this group of companies to embrace the fact that, while their individual company initiatives will continue to be hugely impactful, there is an opportunity and a need to achieve even more by working collectively.  By further banding together globally, regionally, and locally, the sector can be a catalyst for pursuing positive impacts at an unprecedented and meaningful scale.

In terms of challenges, as Andre already alluded to, I believe one of the greatest will come from balancing evolving consumer preferences with achieving sustainability aspirations. The growing range of products is quite extraordinary which places a lot of pressure on facilities (versus producing one or two products) and increased complexity within the supply chain (e.g. raw materials, packaging, warehousing, distribution, etc.).

Kate Krebs (ABA): Al’s point about packaging and recycling is spot-on. On one hand, our industry is driving amazing innovation in the plastic packaging realm. But without solid recycling infrastructure or education, it’s our packaging—with our brand names boldly displayed—out there as litter and our companies can’t abide that.

Another challenge and opportunity, of course, is water usage and water sourcing. This has been a focus for BIER, with members working to establish benchmarks and frameworks to enhance water stewardship and security. We see an opportunity to look at conservation in a whole new way, which takes drive and collaboration.

Steps Any Organization Can Take to Bolster Environmental Sustainability

Q: What’s one critical step any company can take now to lay a stronger sustainability foundation for the future?

Al (PepsiCo): Environmental sustainability can’t be the responsibility of one function within the company—it needs to be embedded across the entire organization. If your organization isn’t tackling sustainability together, you need to start there; take steps to get buy-in and collaboration to drive sustainability forward.

Andre (AB InBev): Develop future scenario plans. From resource scarcity to population growth to the changing political atmosphere, you need to determine how agile your company will be as climate change evolves. How will you respond? How will you shape your strategy? How will you lead your company?

Nick (BIER): Embed an effective process to define what is most material now and into the foreseeable future using a representative set of internal and external perspectives. Companies able to do this well are much better positioned to navigate dynamic stakeholder interests, especially in the age of social media.  Pursuing what is most material to a company is a journey that requires sustained commitment due to the complex nature of challenges and opportunities.

While it is critical for companies to be responsive to stakeholders, it is more tempting than ever to get distracted from the course and continually disrupt momentum.  For those of us tracking the sustainability space closely, it often feels like every week brings a new “hot topic” that grabs a majority of attention.  While this is possibly good in terms of raising broader awareness on sustainability, it is very easy to get overly focused on single pieces of a much larger puzzle we need to be collectively working on.

Kate (ABA): Deep analysis of your opportunities, challenges, and risk points. This will help you build the foundation of your strategy: a transparent vision to work toward. And this will set you up for driving change in the short- and long-term.

An Eye Toward the Future

For each of these sustainability leaders, the key to long-term success is rooted in collaboration—both inside and outside company walls.

“Alone we can only do so much,” Al shares. “Together, we not only have the ability to work together to identify opportunities and develop steps for capitalizing on them, but we can also combine our voices and amplify the sustainability message.”

There’s little doubt that bitter challenges and sour pressures still lay ahead. But these leaders are looking toward the future with optimism and excitement. What do they see and what do they hope for?

Integration. Alignment. Connectedness. Solutions. Results. And, of course, the key ingredient: Collaboration.

Learn more about the better tomorrow we’re working toward, together, at the Beverage Industry Environmental Roundtable: www.bieroundtable.com.