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Market News

 August 12, 2009
Saving Water - A Key Corporate Issue

 The world’s second largest food producer, Kraft Foods, has successfully cut water usage by 21% across its global network.

Recent United Nations reports suggest that 1 in 6 people do not have access to safe drinking water, spurring much needed initiatives to manage our water. Intensive manufacturing processes in the food and beverage industry are very water dependent, and as this vital resource become scarcer, the efficient management of water has become increasingly important.

Over the past three years, Kraft Foods has reduced the amount of water used in manufacturing processes by more than 3 billion gallons (nearly 12 billion liters) - enough water to fill nearly 5,000 Olympic swimming pools.

The reduction comes two years ahead of schedule and was achieved through an internal audit of manufacturing processes spread across four countries.
According to a press release from Kraft successes were as follows:

AUSTRALIA: Kraft’s Port Melbourne plant recently won a prominent environmental award for identifying opportunities and taking actions to reduce potable water use up to 39 percent (20 million gallons/74 million liters per year). The project will reuse production process water and optimize clean-in-place systems for manufacturing equipment. Port Melbourne is working to find new uses for wastewater -- even partnering with a road construction group to reuse approximately 10 million liters per year for road compaction and dust suppression.

BAHRAIN: Kraft’s cheese and beverage plant reduced water use by 33 percent (5 million gallons/18 million liters per year) by using alternative options to enhance the effectiveness of cleaning without compromising product quality. Now, product lines can run longer without interruption.

GERMANY: The Kraft Fallingbostel cheese plant reduced water use by 7 percent (18.5 million gallons/70 million liters per year). The plant is now reusing its manufacturing process water -- instead of using the town’s water -- to run the plant’s cooling towers.

FLORIDA: In Jacksonville a Kraft coffee plant installed a closed-loop system to reuse water to cool coffee grinding equipment instead of using city water, helping it reduce water use by more than 35 percent (nearly 20 million gallons/75 million liters).

GEORGIA: In Atlanta a Kraft bakery reduced water use by 33 percent (nearly 17 million gallons/64 million liters). Employees reduced the amount of water used for cleaning specific equipment and also eliminated unnecessary re-cleaning of equipment. They also changed cleaning procedures to begin cleaning before using water and repaired leaks at the facility.

ILLINOIS: The Champaign grocery plant reduced water use by nearly 20 percent (nearly 120 million gallons/450 million liters). Employees raised awareness about ways to reduce water use, fixed leaks and outfitted plant boilers and evaporating equipment to reuse well water instead of the town’s water.

Also, at their corporate headquarters in Northfield, Illinois, three lakes on campus capture rainwater for reuse, handling half of the property’s irrigation needs. Recycled water frozen at night is also used to cool the office.

The initiatives are all part of a robust corporate social responsibility program that is focused on sustainability and social welfare. Concurrent with the water initiative, Kraft has also refused to advertise products to children that do not meet nutritional requirements.

Other sustainable measures include reducing packaging waste by 150 million pounds by 2011 and a recycling program that has already collected over a million used Capri Sun drink pouches.

A Kraft spokesperson interviewed by Bloomberg News declined to estimate how much these environmental initiatives have helped to cut costs.

Over the past year shares in the company have risen 6.6%, and the sustainable measures of the company reflect a larger trend in business to critically examine processes to drive down costs and deliver sustainable products.

Other food and beverage companies like Coca-Cola and PepsiCo have participated in summits focused on water usage, and have acknowledged a need for sector wide reform on water usage. The most precious resource in the world is often the one that is the most wasted.