Investigation Ricegate: Bud Light’s War On Corn Exposes Its Own Inconvenient Brewing Ingredient

ab inbev largest consumer rice brewing beer climate change

AB InBev’s use of rice in beer is a climate change problem. Is the industry leader doing enough to solve it?

Bud Light’s famous “Dilly Dilly” advertising campaign brewed up some real controversy this year with its Super Bowl spots, catalyzing the scandal spectators have come to know as “Corngate.” AB InBev – the Belgian brewing company that manufactures the best-selling Bud Light and other beer brands popular in the U.S. like Budweiser, Busch and Michelob – was responsible for the ads in which it attacked competitor brands Miller Lite and Coors Light for using corn to ferment their beers.

The ads made AB InBev some new powerful enemies, including America’s farmers. Now, MillerCoors has even sued AB InBev, claiming the ads are misleading. But more than anything, the campaign has been called out for its glaring hypocrisy – particularly given the beer giant’s own massive demand for its preferred nontraditional brewing ingredient, rice.

 

 

Beer lovers have long criticized Anheuser-Busch for brewing with a fermentable other than barley, a practice many thought to be for cost cutting. In reality, it’s to give Budweiser and Bud Light their unique flavors (and as an adjunct in at least 29 other products) that AB InBev uses rice – a lot of it. As in, more rice than anyone else in the country. And since AB InBev is so keen on attacking its competitors for using corn, it’s only fair to ask some pointed questions about AB InBev’s gluttony for rice, an agricultural commodity with massive environmental impacts.

The Thing About Rice

Global climate change is one of the most serious ongoing threats to our survival, and researchers are finding out that it’s worse than we thought.  If we don’t make major changes to the way we use and manage our resources, hundreds of millions of people will be suffering very real impacts of extreme weather and sea level rise very soon.

According to the International Panel on Climate Change, climate change can become irreversible as soon as 2030. This means in as little as 12 years – by the time your elementary-school aged kids are graduating college, getting married, or starting their careers – the environmental devastation climate change is bringing on our delicate ecosystems will be permanent. Unless we all want to figure out how to describe to our grandchildren what a coral reef or a rain forest looked like, we all need to start taking sustainability seriously.

Cutting greenhouse gas emissions is the best way to fight global climate change. As a result of growing worldwide awareness about the all-too-real threats of climate change, we’ve actually managed to level off carbon dioxide emissions. But methane – another dangerous greenhouse gas which has at least 25 times the effect of CO2 – is only getting worse. According to researchers, one of the prime culprits for this dangerous spike in greenhouse gas emissions is the agricultural industry.

 

Inventory of US Agriculture Greenhouse Gas Emissions and Sinks 1990–2016 EPA

 

Because of the unique way that it’s grown, rice emits a lot of methane. In 2016, rice growing in the U.S. emitted 13.7 million metric tons of CO2-equivalent greenhouse gasses. To provide some context for this figure, 1 million metric tons of CO2 is the amount of greenhouse gas emissions generated by 216,000 passenger cars in an average year, or the electrical demand of 128,000 standard U.S. households. It’s approximately the same volume of gasses that could be contained in 200,000 hot air balloons – and rice is responsible for 13.7 times that amount in a single year.

As of 2015, rice farming was responsible for over 35 percent of total worldwide methane generation, and rice is consistently the top GHG-emitting crop. Recent evidence even indicates that methane emissions from rice may be more damaging to the climate than originally expected. Without a doubt, the rice problem is bad. And AB InBev’s insatiable appetite for the grain is only making the problem worse.

Wearing a Shade of Green

AB InBev may want a pat on the back for not using corn in most of its beers, but it’s not going to get one from the environmental community. The beer producer consumes millions of bushels of barley, corn, hops, and syrups each year, and it is the nation’s single largest end-use consumer of rice. AB InBev’s own rice mill in Jonesboro, Arkansas sends 8 million hundredweight (approximately 17.6 million bushels) of long grain paddy rice through its facility each year. Even so, the brewing company purchases more rice than anyone else in America, totaling what has been estimated to be about 8% of the annual crop.

The mainstream business media has already hamstrung AB InBev for the hypocrisy of its misdirected attempt at corporate greenwashing via the latest Dilly Dilly production. The company uses corn in several beers, so exactly why AB InBev chose to make corn an issue remains a mystery. Nevertheless, Big Beer has found its way into the center of the climate change debate – and not as the poster child for corporate environmental responsibility.

Earlier this month, Anheuser-Busch announced a partnership with Indigo Agriculture, a company that modifies rice seeds with microbes specially-selected to help fight disease, increase nutrient intake, or decrease water demand. According to the press release, this means 2.2 million bushels of AB InBev’s rice will be grown with at least 10% less water and nitrogen and “at least 10% savings in greenhouse gas emissions compared to state benchmarks.” As great as this sounds, however, it appears that this new attempt at greenwashing will have little, if any, real impact on AB InBev’s enormous carbon-equivalent footprint.

 

epa map high concentration greenhouse gas rice producing states

 

First of all, it bears mentioning that not every state in the U.S. uses emissions benchmarks in its climate change policy; further, among those that do, most focus exclusively on emissions from electricity and transportation. This means that the savings in greenhouse gasses mentioned in AB InBev’s release may very well be 10% of a non-existent number.

Secondly, 2.2 million bushels barely makes a dent in AB InBev’s annual demand. In 2016, the conglomerate bought over 17 million bushels of rice from hundreds of growers, not to mention the over 17 million bushels it processes each year at its own mill.

At best, the effectiveness of AB InBev’s half-hearted sustainability efforts is questionable. At worst, it’s downright deceptive.

The Reported and the Actual

According to 2016 regulatory filings (most current available), AB InBev emitted approximately 500,000 metric tons of CO2 equivalent from its various facilities; MillerCoors reported less than half that emissions figure in the same year. Subsequently, in a move that garnered global praise, the industry leader announced that 100 percent of its purchased electricity will be from renewable sources by 2025. The problem, however, is that AB InBev’s filings do not take into account any of its greenhouse gas contributions as the nation’s largest consumer of rice.

 

 

Permitting AB InBev’s presumed 8% share of national rice demand, America’s favorite brewer could theoretically have been responsible for 1 million metric tons (200,000 hot air balloons’ worth) of CO2 equivalent in its last reported year*, more than twice what available EPA records show. If accurate, it would be a revelation rendering the glories of AB InBev’s much recognized sustainability initiatives no more than insignificant. In spite of that, the company went on to tout itself as an environmental leader and then affronted its competition for using brewing ingredients much less malignant to the drinking public.

Canning Accountability

Nobody is blaming AB InBev for being profit-motivated. Rather, the wisdom behind such a short-sited strategy is what has come into question. Climate change is not just an environmental problem, it’s a business constraint.

“The beer industry is especially vulnerable to climate change, and its very survival depends on reducing greenhouse gas emissions from its supply chain,” explains Patrick Parenteau, Professor of Law and Senior Counsel of Vermont Law School’s Environmental and Natural Resources Law Clinic. This is true because extreme weather and changes in climatological patterns are already having a serious impact on global hops and barley crops. We’re already seeing shortages that will only grow more dramatic. In fact, if left unchecked, climate change could double the price of a pint of your favorite beer. “If you’re going to continue to make your beer out of rice,” Professor Parenteau explains, “you’re going to have to figure out how to do that sustainably.” If not, we may be facing the end of beer.

By and large, however, America’s business leaders are not holding themselves proportionately accountable for the roles they play in global climate change. Instead, they are taking advantage of the growing concern people are having for environmental health to demonize competitors and shirk responsibility. Greenwashing campaigns may be a natural consequence of requiring companies to prioritize profits above all else, but that doesn’t mean we have to buy into them.

America’s top beer manufacturers can cannibalize each other with ambush marketing campaigns all they want, but when those competitive practices become a distraction from real harm being done to the environment the time has come for an intervention.

Consumer Behavior Can Drive Change

The threats posed by greenhouse gas emissions are terrifying. For the most part, they’ve been enough to force our leadership into a fear spiral that lands them squarely in a state of denial. Many politicians have preferred to bury their heads in the sand rather than face the problem with the courage necessary to solve it – that is, with a few exceptions like Rep. Ocasio-Cortez (D-NY) and her Green New Deal and the international leaders who came together to execute the Paris Agreement. The progress is promising. However, at the end of the day, consumers are the only ones that can inspire companies to adopt more sustainable practices in a free market society.

 

 

Retailers may rely on dependable vendors in their supply chains, but they need their customers even more. Consumer demand for sustainable timber forced Home Depot to make changes in its supply chain, and now the retailer is the largest seller of certified sustainable wood in the country. Walmart started tracking the sustainability of its retail products a decade ago, and by doing so it’s managed to simultaneously improve sustainability and cut costs. When customers make sustainability an issue, retailers respond.

Bud Light is still America’s most popular beer, but sales fell by nearly 7 percent last year – the largest annual decline on record. As consumers, it is our responsibility to hold the companies who are profiting from the degradation of the environment accountable for their actions. Progress is possible, but only when incentives fall into line. AB InBev has real power in the U.S. rice markets. By demanding a more sustainable beer, drinkers everywhere can help make real progress toward a better future.

*A press contact for AB InBev was presented with questions about identifying the company’s projected indirect CO2 equivalent emissions from rice consumption, but a response was not received.

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How do law and society co-evolve in our technology-driven world? Professional writer and digital identity guru Samantha Joule Fow is on a mission to find out.

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