Given the negative impact of climate change on society, everyone must play his/her part in reducing greenhouse gas emissions. With this, it’s important to consider the environmental implications of all of our purchases, even our alcohol! We are living in the age of the “bourbon renaissance” where bourbon sales in the US has grown by $1.8B in the last 2 years and licensed distilling companies have tripled in the same time. So before you order that Old Fashioned at your next HBS mixer, I urge you to consider, “which is the most ‘green’ bourbon?” (The answer is, “Maker’s Mark,” and I’ll tell you why.)
“Conserving our natural resources is the right thing to do to. We will pursue continual improvement opportunities, especially in the areas of water, energy and waste, to reduce the impact of our business on the environment.”
–Matthew Shattock, President & CEO, Beam (Maker’s Mark’s holding company)
Climate Change’s Mark on Maker’s
Climate change has led to serious weather conditions across the US including increased rainfall, drought, and extreme warming depending on geography. Beyond the larger societal implications, this has also impacted the bourbon production process. For example, lower yields from rye grain harvests across the US have forced bourbon producers to seek out new rye suppliers, and the rise of carbon emissions scrutiny has forced bourbon producers to reconsider the highly energy-intensive process of distillation and byproduct (waste) management.
Maker’s Mark, a nationally distributed Kentucky bourbon, is located in Loretto, Kentucky where their distillery sits on 620 acres of land. Maker’s has been setting the standard for sustainable whiskey production for years, and in growing the company’s production to meet demand, leadership has remained committed to keeping their carbon footprint to a minimum, while building value for the Maker’s Mark brand.
In the past 6 years, Maker’s Mark has developed an incredible system that manages the distillation process waste by converting it into “biogas”, a renewable energy source that they then use to fuel a portion of their plant, in replacement of natural gas consumption. On top of this, they are able to sell an additional byproduct of the new process, “wet cake,” on the cattle feed market at enough profit to offset the cost of running the new facility, thus making the whole system a self-sustaining innovation. It is the only distillery of its kind in North America.
“What we do is take the byproduct and squeeze out a good portion of the water. We will take the solids, or wet cake, and sell it on the local market as a grain feed for cattle. The water that gets squeezed out is processed through an anaerobic reactor. The bacteria in the reactor naturally break down the organics in the water and convert them to biogas. We then capture the biogas off the reactor and pipe it back to our boilers. The biogas is then used as a fuel for the boilers to help displace some of the natural gas that we currently use. We save 15-30% on our natural gas consumption.”
–Kevin Smith, Plant Manager, Maker’s Mark Distillery
Given the groundbreaking sustainability work coming out of Maker’s Mark distillery, could it be the case that they are still at risk for operational failure in the next 100 years due to climate change; that they are somehow missing the bigger picture? Let’s explore.
Bourbon Background: A legally-defined American Whiskey
As alluded to above, producing a proper bourbon requires many steps including fermentation of the mash (a mixture of grains consisting of corn, rye, and barley), distillation, and several years of aging in a freshly-charred, new oak barrel before being bottled and shipped. The staves used to make the barrels are most closely linked to the color and flavor of the final bourbon. This comes from the release of chemical compounds in the wood during charring that infuse with the aging liquid through the process of diffusion. It’s important to note that wood is a highly variable and complex raw material. When you taste the bourbon you are getting a taste of the wood’s history: the type of tree, where it was grown, and how the tree was grown (or what it experienced over its life) are all critical factors in the final flavor. White oak is the only permitted wood to be used in the bourbon aging process.
The Maker’s Sustainable Forest: Is it enough?
Despite the rapidly growing demand for bourbon, estimates say that there is sufficient supply of the naturally abundant white oak tree to keep up with demand for the near to midterm future. For example, Kentucky, where Maker’s Mark distillery is located, is ~50% forested, mostly with white oaks. However, the issue for Maker’s Mark, who aim to be sustainable in all aspects of their production, is that individual wood stave suppliers (cooperages) have ultimate control over the sustainability practices deployed in the harvesting of the wood. The land owners often don’t follow the US Forest Service’s forest management standards and procedures for certified sustainable wood, making sourcing staves back to certified production a difficult thing to do.
Destruction of forests accelerates the pace of climate change by reducing carbon extraction from the atmosphere. Harvesting trees is a necessary step in the bourbon process, but practices can allow for reducing tree rotation periods and CO2 retention by utilizing sustainable harvesting methods (no waste burning, no commercial clear-cutting, prioritizing tree regeneration when cutting, etc). To ensure control over sustainable deforesting practices, Maker’s Mark decided to vertically integrate, and own and manage its own white oak forests and cooperage alongside its distillery. With this, Maker’s is able to produce its own high-quality staves, ensure the long-term supply of these staves, and also reduce its carbon footprint and once again benefit the overall good of the environment.
However, as demand for bourbon continues to grow, can Maker’s Mark’s local, sustainable forests keep up? I believe that in its current form the answer is “no”. Rather than continue to build innovative solutions and integrate them strictly into its own practices, it might behoove Maker’s to consider ways to influence the larger conversation around sustainable wood harvesting and shift consumers to demand sustainable-only practices and products from brands and suppliers around the country. Long-term access to sustainably managed wood, at an affordable price, at scale, might only be possible if Maker’s can help motivate and empower suppliers to deliver just that, rather than rely on producing it themselves.
Word count: 906
Sources used throughout:
- “Is It Green? Maker’s Mark Bourbon Whiskey” by Adrianne Jeffries, http://inhabitat.com/is-it-green-makers-mark/
- “Beam Building Brands and Protecting the Environment Yesterday, Today and Tomorrow”, https://www.beamsuntory.com/pdf/2011_Sustainability_Guide.pdf
- “Bourbon, Barrels and Climate” by Tom Kimmerer, http://www.gobourbon.com/bourbon-barrels-climate/
- “The Results Are In: New Study Proves Kentucky Bourbon On Cusp Of Golden Age”, http://kybourbon.com/the_bourbon_renaissance_new_study_presents_proof_of_signature_industrys_res/
- “A Maker’s Mark: Climate Politics Change” by Alison Winfield Burns, http://www.huffingtonpost.com/alison-winfield-burns/makers-mark_b_3717495.html
- “Alcoholic drinks makers lead way on climate change adaptation” by Jane Wardell, http://www.reuters.com/article/us-climatechange-summit-alcohol-idUSKCN0I52RP20141016
- “Climate Change Claims Yet Another Victim: Kentucky Bourbon” by Erin Courtenay, http://www.treehugger.com/green-food/climate-change-claims-yet-another-victim-kentucky-bourbon.html
- “Kentucky Bourbon and Bourbon Barrels”, http://www.kentuckybarrels.com/KentuckyBourbon.html
- “Sustainable Harvest Practices”, http://forestandrange.org/modules/visualguide/360/introduction/Sustainability.htm
- “Forest Finance 1: Sustainable Forest Harvesting: An Economic Perspective”, http://extension.psu.edu/natural-resources/forests/finance/forest-tax-info/publications/forest-finance-1-sustainable-forest-harvesting-an-economic-perspective
- “Climate Change in 2016: Implications for Business”, Harvard Business School
- “IKEA Gets Deeper Into the Woods” by Saabira Chaudhuri, http://www.wsj.com/articles/ikea-gets-deeper-into-the-woods-1438310691