Latin America is relatively water rich compared to other regions in the world. But there are still plenty of areas in Central and South America feeling the effects of climate change, generally because the precipitation is occurring where there is low population density. For example, Lima, the host of this week's United Nations Climate Change Conference and home to 8.5 million people, only receives about 6.4 millimeters (0.30 inches) of rain annually.
Ironically for beverage companies, they are often expanding their businesses into areas that are already struggling with water scarcity. To that end, one large global brewer, SABMiller, says businesses need to make the business case for addressing water stress and climate change throughout Latin America.
As with the case of many beverage companies and brewers, Latin America is a growth market as more citizens enter the middle class and can now easily afford a beer or two. The problem, however, is that new breweries are often opening in municipalities that are already coping with water stress. To address the issue, SABMiller, which has concentrated its business in Colombia, Ecuador, El Salvador, Honduras, Panama and Peru, has partnered with other organizations on water conservation and treatment programs for several years. One of them, the Water Futures Partnership, works with the World Wildlife Fund and the German development organization GIZ on recharging aquifers while reducing dependence on groundwater. According to SABMiller, such programs not only address water stress, but can also benefit businesses that invest in water security within Latin America in the long run.
SABMiller aims to set an example with its new sustainable development strategy, which the company calls "Prosper." Among the company's updated goals it seeks to achieve by 2020 include:
Reduce the water-to-beer production to 3:1. Globally, the amount of water the company consumes to make one liter of beer is about 3.5:1, and has gone down incrementally over the past several years. The company says its current mark has been reached a year early.
Reduce its carbon footprint within its value chain by 25 percent per liter of beer.
"Secure the water supplies we share with local communities through partnerships to tackle shared water risks."
Establish programs to mitigate water risks for the key crops important within its supply chain.
Whether anything comes from the announcement of these goals at the Lima Climate Change Conference remains to be seen, but SABMiller has been one of the more proactive beverage companies. The company has concentrated a lot of its water stewardship work in Peru. The country of 30 million will be Exhibit A of how well the company performs: Fifteen percent of Lima's population, for example, has no access to municipal water, and the country is still reeling from a drought earlier this year that led to water rationing. The city also suffers from a faulty infrastructure: As much as 38 percent of Lima's water supply is wasted due to leakage and illegal tapping of pipes. Such challenges are a perfect opportunity for SABMiller and its competitors to show they are willing to solve some of the pressing problems related to clean and safe water in the coming years.