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Circular business model
Ambition
Passing on our company and all that goes with it more beautifully to the next generation. That succinctly describes our ambition. We consider it our duty to contribute to a more beautiful world. This is why we are committed to a circular business model. This means that we will not let raw and other materials, as well as energy, go to waste. We make sure to use as little of it as possible and that what we do use, retains as much value as possible.
Our approach: SCI
To determine our measure of circularity, we use the Swinkels Circularity Index (SCI). In the absence of an appropriate and accurate circularity model in the market, we developed our own measurement tool in 2018 and continued to refine it over the years. The SCI is based on three pillars; circular procurement, circular production and high-quality reuse. Within each pillar, different parameters are measured and monitored. The Swinkels Circularity Index provides an accurate overall picture of our performance in the field of circularity.
In my view, the SBTi approach is going to make the difference
Marthijn Junggeburth, sustainability manager
SCI results in 2023
Our circular business operations’ score in 2023 was 61%. Compared to 2022, this is a 2%-point improvement. Initially, we targeted a 3%-point improvement by the end of 2022. In mid-2022 we updated that ambition. The main reason being to embrace a new way of working. Previously, we achieved part of our score through offsetting; compensating for CO2 emissions by participating in CO2 positive activities such as planting trees and realizing a wind farm.
In 2023, however, we explicitly opted for insetting as in reducing CO2 through changes in our processes and practices. Insetting, in our view, is a fairer way to achieve circularity with a structural approach for now and the future. As the cost of reduction is much higher than of compensation, we chose to make reductions with available resources and lower the target slightly. You can read more about insetting and offsetting in “Project story insetting vs offsetting.”
In 2023 we scored 61% on circular business operations
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New governance regarding circularity
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Managing using Trias Familias
- Avoiding, reducing and saving
- Making it more sustainably
- Minimizing environmental impact
To be better able to achieve our circularity goals, we changed the organizational structure in 2023. Each sub-area of the SCI (such as transportation, buildings, procurement) now has its own workstream with a project leader. Each workstream also has a sponsor in the Management Team. This structure makes analyzing, developing and deciding on circularity initiatives easier and faster.
Figure: Our organizational structure
To develop and test circular initiatives, we use the Trias Familias model. In this model, we manage hierarchically by:
Figure: Trias Familias
Circular procurement
Ambition
We want to procure the goods and services we use as circularly as possible and apply strict sustainability requirements. By doing so, we encourage our suppliers to also take steps in the fields of sustainability and circularity. Together with our partners in the chain, we increase our impact.
Image of 2023
In 2023, we scored 29.5%; a slight improvement from 28.9% in 2022. Among the components, we see a changing image. After several years of growth, the limits of packaging improvement are well within sight. The same can be said for agricultural raw materials, especially barley. Regarding our marketing materials, we expect to make good strides in the coming years. The purchase of large quantities of materials, especially steel for the construction of our new brewery in Cuba, depresses the score of the machinery section, as the demonstrability of the proportion of recycled content is still proving to be very difficult.
In 2023 we scored 29.5% on circular procurement
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Agricultural raw materials: 73% circular
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Packaging: 77,2% circular
- Cask caps: Following the example of brewery De Koningshoeven, our breweries in Steenhuffel have also completely switched to cask caps made from 100% recycled plastic.
- After introducing single-use casks with 18% recycled plastic, a project is underway to bring them to 31% recycled material in 2024.
- For some products, we want to start working with so-called “sleek cans.” Thanks to their dimensions, these cans can be made comparatively lighter, which allows for advantages in use of material and transportation.
- Despite previous disappointing results, we are investigating whether we can include some recycled plastic in our pallet foil. This will allow us to further reduce the proportion of plastic. The condition, of course, is that it can be done safely and responsibly.
In 2023, we see small improvements in circular procurement across the line. We were able to achieve a slight improvement in the share of sustainable agricultural raw materials; however, this still requires additional effort. Climate change is evident in all the locations where we produce. Increasingly extreme weather effects (both wet and dry) are affecting crop production. We are therefore increasingly diverting to other areas (e.g. Scandinavia) to purchase sustainably-grown grain.
In 2023, the contribution of packaging to our circularity index has risen from 76.8% to 77.2% percent. All our packaging is now 100% recyclable.
Optimizing at the limits
Thinner, lighter, more recycled content and reusable; these are the starting points for our packaging concepts. For years, we have been working to make packaging more sustainable through a variety of optimizations. We continued that trend in 2023. Patrick Blom, packaging technologist: “We have long since picked the low-hanging fruit, so it is becoming increasingly challenging to implement further sustainability. We have almost reached the limits of what is technically possible and/or sound and safe. Market conditions can also create constraints, such as erratic availability of recycled materials, fluctuating prices and quality. Still, we managed to achieve great results again in 2023. Small optimizations through high volume translates into significant savings on packaging materials.” An overview of the results by packaging material:
Plastic
Patrick: “The total volume of plastic increased compared to 2022, with less recycled plastic packaging material purchased. However, we continue to improve the use of plastic. For example, we have conducted a series of trials to increase the proportion of recycled plastic in our printed and unprinted foils. These foils have now gone from 50% to 70% recycled plastic. The first trays and sixpacks with this foil found their way to retail outlets in 2023; in 2024 the rollout will take place and we will have permanently switched over. We have made our single-use barrels (Dolium) 80 grams lighter and used recycled plastic in the material for the first time. The barrels now consist of 18% recycled plastic, saving 18,000 kg of material. Finally, we are looking at ways to replace plastic with cardboard or paper.
Total plastic savings in 2023: 129,000 kg.
Glass
Glass packaging has long had a high proportion of recycled material. In the current glass we use, this is about 75%. Here, we have not been able to make any further improvement in 2023. The limit is determined by the availability of recycled glass and the processing capabilities of suppliers. Through ongoing dialogue with the chain, we aim to further increase the proportion of recycled glass in our packaging in the coming years, striving for increasingly lighter bottles.
Paper and cardboard
Since 2020, all of the corrugated cardboard and folding cardboard we use carries the FSC® or PEFC® quality mark. The cardboard is made of wood from sustainably managed forests and recycled material. To reduce usage, we are engaged in several projects to make packaging as light as possible. In 2023, we achieved some great results.
We transferred some products to trays with a lower edge in 2023. This, when the rollout is complete, will save 132,000 kg of cardboard on an annual basis. Furthermore, in 2024, we will be able to reduce the thickness of some of our boxes while maintaining carrying capacity. This will save 50,000 kg of cardboard. One notable sustainability project involves our labels. For a long time we used an aluminum layer on paper labels to create a nice glossy look. We are phasing out that aluminum layer. Eventually, we will only use all-paper labels.
Total paper and cardboard savings: 132,000 kg per year.
Metal (steel and aluminum)
Since 2019, we have made big steps in saving on metal by using lighter cans. We continued to optimize this method in 2023 as well. In the Dutch market, for example, we work exclusively with aluminum cans. By definition, these are lighter than steel cans, which has a positive impact on transportation. Furthermore, we made our 25 cl cans thinner, saving 36,000 kg of aluminum per year. We are also working on similar optimization in the area of crown caps. In 2023, we did the first tests with 0.18 mm crown caps instead of 0.22 mm. If everything goes according to plan, this will allow us to save about 100,000 kg of steel annually starting in 2024.
Total aluminum savings: 36,000 kg per year.
Innovations
Because we are approaching the limits of technology (and sometimes availability), further sustainability of packaging is primarily a matter of innovation. Together with our suppliers, we develop new sustainable packaging concepts. Some examples of developments:
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Marketing materials: 56% circular
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Machines, buildings and facilitating materials: 39% circular
Making Point-of-Sale (POS) materials more sustainable can depend on the attention and enthusiasm of our staff. Together with suppliers, more and more manifestations (such as signboards, displays and flags) are being made circular. For example, Cornet’s entire signage at all of our outlets is done in recycled material. In 2023, our score for circular POS material is 56.5%, an increase of nearly 10% over 2022. This share will continue to increase in the coming years, as we receive sustainability information of more and more products and are able to discuss this with our suppliers.
We added the facilitating materials category to our machines and buildings procurement category in 2023. Even in this complex area of many different products and services from many different providers, we aim for sustainable procurement as well. Together with suppliers, initial steps have been taken to make items measurable. For example, we are now collecting data on corporate clothing and office furniture. The achievements are included in the SCI and contribute to our circular operations. We will expand the measurement and data collection in 2024 to include cleaning supplies, IT hardware and personal protective equipment. In terms of procuring machines, we look closely at reusability. In doing so, we steer toward reusing entire machines within our own brewery or reusing parts. To close the circle, we map machine materials using a material passport. This promotes reuse in the future, inside or outside the company.
In 2023, we accelerated the complete mapping of our buildings. In 2024, we expect to complete all our buildings at our production locations. The buildings at other locations will follow afterwards. In this respect, we look at materials, energy use and opportunities for repurposing. Basically, what follows from the analyses is primarily the improvement of the energy management of buildings and, ultimately, smart and meaningful repurposing. Repurposing is not evident everywhere. For example, hygiene requirements for production facilities have increased significantly, making repurposing for production purposes not always possible. In 2023, we transformed an old bottling plant building in Lieshout into an R&D lab (ITEC). To this we will add a tasting room in 2024, again within the existing construction. Our existing malting plant in Eemshaven is being transformed into the world’s first emission-free malting plant and will be ready for use in early 2024.
We continue to improve
the use of plastic
Patrick Blom, packaging technologist
Circular production
Ambition
Circular production touches the heart of our business. We have been working for 300 years on the improvement of our production processes to make them more efficient and effective. Making processes more sustainable is a logical element in this. Here, we focus on saving energy and water, reducing CO2 and making our transportation more sustainable.
Image of 2023
The score for circular production remained almost the same as last year (14.8% in 2022, 14.9% in 2023). Small improvements we were able to make in the areas of energy and water were countered by reduced efficiency due to decreased production. However, this laid the foundation for further improvement, in terms of water consumption and the use of renewable energy. We are proud of the results achieved in the area of transportation in which we expressly involved our partners in the value chain.
In 2023 we scored 14.9% on circular production
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Energy: 17% renewable
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Transport: 13% circular
In the area of energy, we have made some important changes. Following in the footsteps of our malthouse in Eemshaven, we are also putting a lot of effort into heat pump technology in Lieshout in 2023. It continuously evaluates what has a beneficial effect on the applicability to our processes. For example, the latest heat pumps achieve a top temperature of 90 degrees Celsius; this allows us to significantly reduce the amount of natural gas. The heat pumps, along with heat buffers, serve various processes in the malting plant, bottling plant and brewery. This means we have adjusted our calculations (energy per hectoliter of beer) to continue to accurately monitor energy consumption.
Of course, when it comes to circular production, we look beyond our own operation. For example, we achieved significant results with our sustainability actions in the area of transportation (scope 3). You can read more in the in-depth article “Smarter and cleaner: Step by step to sustainable transportation” below.
Smarter and cleaner: Step by step to sustainable transportation
Over the past year, we have taken considerable steps to make the transportation of our products more sustainable. More importantly, we do so with measures that will make a difference in the long run.
Sustainable transportation is mainly about reducing CO2 emissions. We deliberately opted for a more in-depth route in 2023. The easiest way to reduce CO2 emissions without burdening the operation is to counterbalance the emissions. For example, by planting trees or constructing a wind farm. Yet we do not believe this is sufficiently consistent with our circular ambition. This is why we choose to make sustainable investments regarding our transportation.
For example, we shifted some of the transportation from road to rail or water transportation; the so-called “modal shift.” Comparatively speaking, trains and barges emit much less CO2 than trucks. We have been doing this for about ten years. Another method is the smarter loading of pallets, allowing them to hold more products, thus reducing transport movements.
One step further through collaboration
In 2023 and in collaboration with partners, we have also implemented transportation sustainability measures in a number of areas. For example, in collaboration with Barge Terminal Tilburg (BTT), we are deploying an electric truck to transport containers from the brewery in Lieshout to the inland shipping terminal. This means that we are performing this section of transportation emission-free. In addition, with our partner Simon Loos, four trucks for retail transport have been converted to biodiesel (HVO). This number will be expanded in the coming years, so that soon all domestic retail road transport will be running on biodiesel. Steps have also been taken in overseas exports. For example, we purchase Sustainable Marine Fuel (SMF) for part of our export containers. As a result, ships reduce emissions by up to 85%.
In the coming years, we will continue to invest in making transportation more sustainable. So these measures go beyond offsetting CO2 emissions and represent sustainable change. To this end, a roadmap has been drawn where each year we go one step further to achieve our transportation goal of 30% CO2 reduction by 2030.
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Water use: 61% circular
In 2023, we see that our water use has increased slightly from 2022. The cause is a declining market demand. This results in a start-stop movement in production, making it less efficient and resulting in higher water use for the cleaning and flushing of boilers and pipes. We did start a study in 2023 in Lieshout on using a different water quality for cleaning equipment. For some rinses, we can use reused water; thereby saving on the use of mineral water from our wells. In addition, a number of smaller water projects were executed in 2023.
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Project story
Emission-free malting plant Eemshaven
The year 2023 marked Holland Malt’s conversion to the world’s first emission-free malting plant. In Eemshaven, where the malting plant is located, a new, innovative heat system was installed last year. Due to this accomplishment, Holland Malt will no longer use fossil fuels, biomass or other energy sources that create harmful emissions during its malting process as of March 2024.
The advent of cans in the deposit system for Dutch consumers has caused quite a stir. Consumers and retailers perceive it as inconvenient because of the many formats and the easy creasing of empty cans, among other things. However, collecting cans prevents a lot of litter and there are benefits to reusing the material.
Marthijn Junggeburth, Sustainability Manager: “The expansion of our deposit system to include cans has brought complexity to the chain. That takes some getting used to. Still, this complexity is preferable to disposable cans as far as I am concerned. The chain is relatively short, the returnable cans are collected by the supplier and after shredding are easily processed into new cans. Apart from shredding, the residual material follows the same process as new material, so the effort is relatively minor.
With glass, more effort is needed. After a solid trend of one-way glass, we see a significant increase in the proportion of returnable glass. Producing glass takes a relatively large amount of energy. On the other hand, you have to transport returnable glass and clean it thoroughly. That takes energy, lots of water and produces a stream of dirt that you have to process. The costs versus benefits per bottle are enormously difficult to quantify. Still, I am convinced that they outweigh one-way glass. At Royal Swinkels Family Brewers, over 80% of our bottles are part of a return system.”
We significantly reduce the amount of natural gas
Marthijn Junggeburth, sustainability manager
High-quality reuse
Ambition
There is no such thing as waste. We look for high-quality reuse of each residual flow. In doing so, we want to return the residual flows of food, such as brewers’ grain, as high up the food chain as possible. In this way, they retain as much value as possible.
Image of 2023
The score for high-quality reuse has increased from last year’s score (15.9% in 2022, 17.0% in 2023). We see that more and more colleagues are enthusiastic about getting started with high-quality reuse. For new applications, we often develop new value chains, in which different parties, such as engineers, growers, producers and processors, participate. This increases the awareness of reuse as well as our impact. What complicates rapid adaptation of new applications are laws and regulations. According to the letter of the law, we are creating industrial waste. Reuse must comply with many regulations, audits and scientific assessments. Despite these barriers, we again managed to achieve a number of results and start off new initiatives in 2023.
In 2023 we scored 17.0% on high-quality reuse
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Co-products: 99% circular
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Residual water: 35% circular
Sludge
Around our plant in Ethiopia, we initiated large-scale trials of growing crops on sludge released from residual water (which contains many valuable nutrients). The results are positive. In 2024, we will be using mostly sludge on a large scale. In the Netherlands, the BierBrickz project is ongoing. In the process, we treat the sludge and use it for pressing “compost blocks” intended for the growing of plants.
We clean the water, after being used in our production processes, in our own water treatment plant for reuse. In 2023, we conducted trials to use this effluent for a number of rinses of our boilers and pipes. Reuse of residual water comes with a number of challenges. First, contaminants present in the water accumulate, making reuse difficult. Furthermore, reuse of residual water means that we do not release it into the surrounding area for the benefit of farmers. Read more about this in the challenge “Reuse or return residual water?” This leads to the conclusion that you should not necessarily reuse residual water, but that there is flexibility to choose the right application; either use it for the cleaning process or release it into the surrounding area.
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Residual flows: 77% circular
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Machines and buildings: 99% circular
At our headquarters, and in the MFGO building, we have started separating waste using multi-purpose waste bins. These consist of four different waste bins where a distinction is made between cans, residual waste, plastic and organic waste. It is important to separate waste properly so that it can also be recycled properly.
In 2023, we have standardized the use of our material passports and made them part of our procurement process. We also hired an additional FTE; this employee will assess our existing buildings for circularity.
Royal Swinkels Family Brewers is working hard to become a fully circular company. This means the constant scrutiny of activities and processes and implementing sustainable improvements. The workstream transportation has embraced a new work philosophy in 2023; insetting.
Jasper Lipsch, Program Manager Sustainability: “The easiest way is to just continue your activities in the way you are used to and then offset your CO2 emissions. This can be done by buying CO2 certificates from activities such as tree planting or wind farm construction. This method of compensation is called offsetting. However, this ultimately changes nothing in CO2 emissions.
A better path to a sustainable operation is reduction; adjusting your production methods and practices so that you produce less CO2. This method is called insetting. As a result, things actually change. CO2 emissions drop and remain lower over the long term. Big disadvantage is that insetting is much more expensive, up to 8x more expensive than offsetting. This leads to an ongoing consideration within the company as to whether the additional costs are manageable.
We explicitly choose insetting and introduce it gradually. For example, we transport more via rail and inland waterway, one of our transport partners transports our containers with an electric truck, 8% of our carriers drive on biofuel and we purchase Sustainable Marine Fuel for part of our sea freight. We expand this share of sustainable transportation every year. By 2030, we want our Scope 3 emissions, of which transportation is an important part, reduced by 25% (compared to our base year 2019).”
In Lieshout, through a pilot at our water treatment plant, we are reusing residual water as process water in our brewery. For example, for cleaning our brewing kettles or rinsing our deposit bottles. Good news, because a successful pilot means we need to pump less water and use less water per hectoliter of beer. Yet it appears that we run into an enduring dilemma with this. When we reuse our residual water, it automatically means that less residual water is returned to the area surrounding our brewery.
For years, through the Farmer Beer Water project, we have been giving treated residual water back to the surrounding area. Farmers near the brewery use this water to grow their crops, and streams, ponds and ditches are filled with it. This current system is in balance; farmers have enough water to grow their crops during dry summers, and streams around the brewery do not run dry, benefiting biodiversity. If any part of this system changes, for example because we reuse our residual water for our brewing process, it could mean that the system becomes unbalanced and has negative effects on the surrounding area.
So we are well aware that we are part of an ecosystem in which the area surrounding us depends on our residual water. On the other hand, we want to use as little water as possible to brew our beer, so we try to reuse as much water as possible. Therefore, the search for a new balance is on; how can we reduce our water footprint and still ensure that the surrounding area has sufficient water available? This is a dilemma we will be dealing with in the time ahead.
In addition to this dilemma, we see water challenges in the area anyway. Due to climate change, we’ve noticed that summers are getting drier and it is becoming more difficult to keep streams filled, and groundwater levels up. So how can we ensure that water remains available in the environment for nature development and biodiversity? This will require us to look for other solutions for water conservation or, for example, large-scale rainwater harvesting. We can only achieve this by working with governments and local nature conservation organizations.