Assessing the Sustainability Performance of New Business Models in the Craft Beer Industry

Veleva Vesela

University of Massachusetts Boston

[email protected]

Extended abstract

Companies have a major role to play in transforming consumption and production systems through innovation in product and service offerings, value chain collaborations, and consumer education (Veleva, 2021). Such transformation, however, “requires a momentous paradigm shift in our society and economy; it calls for working across a broad span of societal actors and disciplinary boundaries on devising and testing unconventional, dynamic and adaptive solutions” (Mont, 2019). It also requires advancing new business models which incorporate economic, environmental and social aspects in an organization’s purpose and performance measures and involve various stakeholders in value creation (Bocken, 2023).

Advancing business sustainability requires developing new frameworks and indicators to better measure the impacts of business models (both the positive and the negative) and recognize different types of value created or co-created: public, partner, and customer (Biloslavo et. al. 2018). Such performance assessment is crucial for helping companies refine their business models for sustainability. While some theoretical frameworks have been proposed in the literature (Lüdeke-Freund et. al. 2017; Biloslavo et. al. 2018), there is limited empirical research on how to assess and manage the sustainability performance of new business models. More research is needed on their impacts on society and the environment (Whalen et. al. 2022; Bockin et. al. 2022). Such impact measurement should involve third-party, independent groups to ensure credibility and prevent greenwashing.

The proposed presentation aims to address this research-impacts gap by focusing on the Massachusetts craft beer sector and examining the role of sustainability-oriented stakeholder collaborations to advance a sustainability assessment and “green brewery” recognition program as a way to shift an entire industry towards more sustainable production and consumption.

Craft beer has experienced rapid growth in the U.S. and globally in recent years. In Massachusetts alone, the number of craft breweries increased from 34 in 2007 to over 240 in 2022 (Mass Brew, 2023). The industry is very sustainability-committed, with many small entrepreneurial players committed to local sourcing, reducing energy, water and chemical use, preventing waste, and promoting social justice and community wellbeing (Ness, 2018; Rosburg & Grebitus, 2020). These companies are typically privately held, employee-owned or certified as B-Corp (benefit corporations) and their mission often includes supporting their local community, the environment and regenerative agriculture. At the same time, beer manufacturing is a water- and energy-intensive process, which generates a significant amount of waste (both liquid and solid) and uses toxic chemicals for cleaning and sterilizing. Beer manufacturing is also associated with significant greenhouse gas emissions, from raw materials production, transportation and packaging. Many stakeholders have been working with the craft brewery industry in the U.S. to support more sustainable consumption by developing new sustainability assessment tools and recognition programs. These stakeholders include state and federal policymakers, the national Brewers Association, state brewers’ guilds, universities, and other partners along the value chain.

Previous research has found that the assessment of social and environmental impacts is challenging because it is based on personal values, beliefs, and priorities (Veleva, 2021). Effective metrics must be defined and constructed in an open dialogue with all relevant stakeholders; there is no single "gold standard" of measurement but instead a variety of metrics that reflect local goals, needs, and stakeholder demands (Costa & Pesci 2016).

The proposed presentation will share insights from a U.S. Environmental Protection Agency funded project aiming to provide pollution prevention technical assistance to craft breweries and develop a new tool for assessing their sustainability performance and impacts. Such performance measurement allows participating companies to further refine their business models (e.g., by switching to local suppliers, solar energy, and/or incorporating process changes like using pre-printed beer cans or ionizing air rinsing) to better manage for sustainability. The study aims to explore the following main research questions: What are the drivers and barriers to adopting sustainable business models in the craft beer industry? How do companies use sustainability performance measurement to refine their business models and achieve greater sustainability impacts?

The study is based on a survey, site visits and assessments of 30 Massachusetts craft breweries. Data collection began in October 2022 and included three main sources: a) a survey of craft breweries, b) site visits and assessments using a Green Brewery Assessment Checklist, and c) publicly available data from breweries’ websites and social media. The survey was sent to all Massachusetts craft breweries in October 2022. In addition, 30 Massachusetts craft breweries were invited to participate in the assessment. All participating breweries were committed to delivering benefits across a “triple bottom line” and majority were microbreweries (producing less than 1,000 barrels of beer annually). The Green Brewery Assessment Checklist was developed using literature review and expert feedback, and includes eight categories of impact: Raw Materials, Water Use, Wastewater, Energy/Emissions, Cleaning & Sanitizing Chemicals, Solid Waste, Packaging Format & Materials, and Sustainability Culture. Participating breweries are provided with assessment results and recommendations. The project involves conducting follow-up visits a year after the initial assessment, to evaluate and document sustainability actions and impacts. The work is part of a larger New England initiative to develop a common assessment and recognition program for sustainable breweries.

Based on the study findings, the author proposes a new framework for industry transformation towards more sustainable production and consumption, which highlights the role of multi-actor collaborations and cross-sectoral partnerships, supportive policies, technical assistance and education. The presentation will conclude with a discussion of the scalability of the proposed framework to other industries, and the necessary policies, education, technical assistance and collaborations, to shift an entire sector towards sustainable production and consumption.

The main contribution of the presentation is to provide empirical research and new framework for assessing and measuring the sustainability performance of new business models in the craft beer industry. It also illustrates the importance of developing strategic collaborations for enabling the transformation of an entire industry towards sustainability.

Keywords

Sustainability assessment, impact measurement, business models for sustainability, craft beer industry, cross-sector collaborations for sustainability

References

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