Sustainability is a major focus in the food and beverage space—and water is a critical component of this effort. Water is necessary for almost every food and beverage manufacturing process, whether as an ingredient or for sanitation. Without water, these industries can’t function. That’s why conserving water is critical not only for the health of our environment, but for businesses themselves.
Food, Beverage, & Agriculture (FBA) businesses are among the top corporate consumers of water. From fruits and vegetables to soft drinks—this natural resource resides at the heart of FBA production, making it vital for companies to manage their water supply.
Nixon Peabody and GHD frequently work together on mergers and acquisitions, in which we help clients navigate the process of buying and selling FBA production facilities. Inherent in these deals are risks related to water. Acquiring companies must ensure there is sufficient quantity and quality of water for current productions, and think about future needs as well: Will that supply be sufficient for growth? What changes in quality, cost, and supply should be expected? How will drought, stormwater, and aging infrastructure change the picture?
Beyond consideration of a company’s rights and access to suitable quality water, Paul and I also discuss challenges and opportunities involving wastewater. Permitting is a big part of this process, including compliance with current permits and the ability to modify permits to allow for growth. Reuse is becoming a bigger part of this discussion, as well as environmental justice concerns regarding water equity in terms of volume and quality.
Which brings us to another question: What is the true cost of water? When evaluating these deals, companies often assess the water bill, usually from the municipality. While we often equate this bill to the price of purchase, the reality is far more complex; to the true cost of water reflects:
- the price per gallon
- the cost of transporting the water from the meter to the use point
- the expense to heat or treat that water to prepare it for manufacturing
- the cost to discharge and, if necessary, pretreat the resulting wastewater
These costs add up, emphasizing the importance of conserving existing resources and understanding the true cost of water. This analysis helps determine where cost savings and conservation can be realized.
As climate change exacerbates extreme weather patterns around the world, the FBA industry is collaborating on long-term conservation methods, including reducing consumption as well as reuse and recycling.
One of the technical groups leading the way on these efforts is the Beverage Industry Environmental Roundtable (BIER). The organization connects a network of global beverage companies to find environmental sustainability solutions. Both Nixon Peabody and GHD are involved in BIER, and we enjoy pooling our knowledge to advance strategies that benefit the FBA industry. We are also both active in the Water Environment Federation, helping stakeholders to learn about these issues and glean insight that will impact the future of their businesses.
Engaging in industry-wide conversations about water is one way to ensure the long-term viability of FBA businesses. However, companies can take steps every day to protect their resources. For example, they can challenge themselves to meet next year’s production goals with this year’s water—by implementing diligent reuse, recycling, and reduction strategies.