Image credit: Trusted Advisor Partnership

Budweiser brewer AB InBev’s route to net-zero: there’s no ‘one-size-fits-all’ way to scale regenerative agriculture

December 15, 2022

Just over a year ago, beer maker AB InBev announced its plan to achieve “net zero” emissions by 2040.

By 2025, the company aims to source all of its purchased electricity from renewable sources and reduce Scopes 1 and 2 emissions by 35%. It also plans to reduce emissions “across the value chain” by 25%.

AB InBev noted the following progress in its latest ESG report:

  • 28.63% reduction in Scopes 1 and 2 GHG emissions vs. 2017 baseline
  • 13.58% reduction in Scopes 1, 2 and 3 GHG emissions vs. 2017 baseline
  • 39.9% renewable electricity operational
  • 81.4% renewable electricity contracted
  • Absolute emissions “increased as purchases and distribution reactivated amidst economic recovery from the pandemic.” Packaging and cooling were the main drivers for this.
  • Agriculture accounts for 12.5% of AB InBev’s emissions.

Like other agrifood corporates with sustainability commitments, regenerative agriculture is an important tool for reaching net zero.

And while its critical to corporate net zero strategies, Nicholas Mylet, global manager of sustainability at AB InBev, tells AFN that regenerative ag is about so much more than reducing emissions. “For AB InBev, the benefits of water availability, water quality and biodiversity are just as important.”

“What’s great about a net zero ambition is that it’s longer term and sets a Northstar,” he adds. “But we also need ambitious short-term goals to address what’s relevant to the value chain today.”

Many of those goals are part of the company’s regen ag initiatives, which AB InBev has been conducting for the last several years with the farmers that grow the barley for its beers.

Defining ‘regenerative agriculture’

“Across the diversity of our sourcing regions, there’s not a single set of practices to improve soil health,” says Mylet. “We developed an approach that could reflect that complexity.”

AB InBev works with more than 20,000 growers across 13 countries to produce malt-barley for its beers. Different geographic regions present different challenges when it comes to transitioning these growers to regen ag practices.

Mylet offers a few examples of this diversity of challenges. In South Africa for example, there might be the need to maximize water holding capacity in the soil as a result of years of drought or unexpected weather patterns.

In North Dakota, or in Altiplano, Mexico, soil erosion might be the biggest challenge. In more tropical areas, there could be incidence of fungal matter that affects the quality of the raw materials.

Towards healthier soils

AB InBev highlights these challenges in its framework for soil health, developed in partnership with the Nature Conservancy: “AB InBev recognizes there is no “one-size-fits-all” approach to improving soil health across the wide range of soil conditions, technical capacities, and external pressures that define the realities of farmers around the globe.”

The framework is a way to address that variety of challenges. It includes the five principles of soil health as well as a range of practices within those principles the company can match with different regions.

The company has not yet publicly disclosed how many acres it farms regeneratively. Speaking to the progress of the soil health framework, Mylet says, “We are focusing on getting this framework established across all of our direct sourcing regions to identify the right initiatives and approach, for which measurement will be a critical element.”

The Trusted Advisor partnership 

One recent initiative Mylet highlights is the Trusted Advisor Partnership with North Dakota State University (NDSU) and the Sustainable Food Lab.

AB InBev is one of several companies involved with the project, which provides a network of independent farmer advisory services to help US farmers transition to regenerative ag. Other agrifood corporates include PepsiCo, King Arthur Baking, and Unilever. Walmart Foundation provided a $1.6 million grant to the Sustainable Food Lab.

That project, which aims to reach 500,000 acres by 2025, currently runs in North Dakota (with plans to expand to surrounding states), where AB InBev has been sourcing from farmers for years and already offers agronomy services.

“We were able, through the support of NDSU and through the Sustainable Food Lab, to identify a location where there is shared enthusiasm and commitment as a way to start driving change.”

The program assists farmers with technical support, financial incentives and cultural and behavioral changes around regen ag. However, Mylet says the major hurdle right now is helping farmers make the change in technical skills required for regenerative ag practices.

“That’s what we see the partnership addressing first and foremost,” he says.

Seeds of change:

As of AB InBev’s 2021 ESG report, the company had 22,000 direct farms. Of those, 74% are now “skilled,” meaning they grow an approved crop variety and have participated in technical engagements with AB InBev agronomists. Meanwhile, 65% of farmers are digitally connected and 69% “financially empowered.”

The company aims to have 100% of those farmers skilled, connected and financially empowered by 2025.

Mylet says one additional area AB InBev is focused on with farming is seed breeding.

Through our teams of researchers, we’re developing crop varieties to ensure the crops we source thrive in environments of the future. By matching seed varieties to field conditions, we aim to maximize the impact of improved soil health practices.” 

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