Budweiser APAC: bringing people together for a better world through procurement Project partners
Budweiser APAC: bringing people together for a better world through procurement Jan Clysner, VP of Procurement and Sustainability, explores how procurement and sustainability go hand in hand as the company looks to create a better world
WRI T T EN BY PRODUCED BY
2
D al e Bent o n Gr eg Chu r c h ill
3
W
hat does sustainability mean to a business? What role can and should procurement play
in defining it and acting upon sustainable initiatives? As we talk of the procurement speak mostly around technology and a business-wide recognition that procurement is more than the back-office function of yesteryear. But where does sustainability come into the equation? For Budweiser APAC, which is part of AB InBev, operating as the largest and a fast growing beer company in Asia Pacific the brewing, importing, marketing, distributing and selling of more than 50 beer brands is achieved through a supply chain and procurement ecosystem that has sustainability embedded
actors to enable the change we want to
deeply throughout. “All of our procure-
bring to drive our sustainability agenda. ”
ment activities revolve around cost, supply
AB InBev has been a global steward for
security, quality, innovation and creating
sustainable action for many years and
efficiencies,” explains Jan Clysner, VP of
recognises its leading position to leave the
Procurement and Sustainability. “Running
world a better place for future generations
right alongside that is our sustainability
and in 2018 the company launched its most
agenda, which we try to embed as much
ambitious sustainability 2025 goals yet.
as possible in our procurement strategies
These goals include; Smart Agriculture
and our business going forward. One is
(100% of direct farmers will be skilled,
connected with the other. It's not that pro-
connected and financially-empowered),
curement is a different animal from sustain-
Water Stewardship (100% of communities
ability. They're very closely connected
in high stress areas will have measurably
and going forward, I see the connec-
improved water availability and quality),
tion growing further and getting closer
Circular Packaging (100% of products
and closer. Indeed our suppliers are key
will be in packaging that is returnable or
4
BUDWEISER APAC
made from majority recycled content)
“Ultimately, in order to achieve our
and Climate Action (100% of purchased
goals as a business, we need the right
electricity will be from renewable
suppliers who will allow us to grow.”
sources; and a 25% reduction in CO2 emissions across value chain).
Looking at the APAC market, Clysner highlights that a large proportion of
For Clysner and Budweiser APAC,
suppliers had to be developed from
procurement is key to achieving these
a supply security, quality and innovation
goals. “At the end of the day, we produce
perspective. This is where procurement’s
and we sell beer. It's as simple as that,
much more integrated role within the
and we're supporting the process,” he
business comes to the fore as he recog-
says. “But it has been much more than
nises that it is about how procurement
just supporting. We are truly part of the
can support that it’s brands, both producing
business, being part of the discussions,
and selling them, are doing the right things.
the decision-making and the strategy
“The brand is the face towards consum-
including sustainability to ensure we still
ers. It’s about doing the right things with
produce and sell beer 100+ years from now.
our brands, also from an environmental w w w. c p o s t r a t e g y. c o m
5
w w w. s h a n y i n g p a p e r.c o m
“A global leading provider of integrated green package solutions�
As a listed company (stock code: 600 567), Shanying International Holdings Co., Ltd. (Shanying International) is an international enterprise integrating industrial internet, comprehensive utilization of green resources, production of industrial and special-purpose paper and package product customization. Our industrial layout covers China, the US, the UK, Sweden, Norway, the Netherlands, Japan and Australia, with one industrial internet platform, 10 manufacturing enterprises of industrial and special-purpose paper, 30 enterprises of package product customization and 20 international and domestic trading enterprises of renewable resources at home and abroad. In 2020, we ranked 395th amongst the Top 500 Enterprises of China selected by Fortune. Shanying International is an environmentally friendly enterprise and we assume our social responsibility in areas such as carbon emission reduction, environmental protection and sustainable development, pursuing ecological benefits for the industry, the natural world and the wider society. We realize an efficient utilization of new energy with storage sheds for raw materials of photovoltaic power generation projects. Our self-built thermal power plants not only satisfy our own needs in production, but also provide clean energy to surrounding enterprises to realize an effective utilization of resources and each year we recycle 4.50 million tons of regenerated fiber and protect 200,000 hectares of forestry. Taking scientific and technological innovation as our core driving force, we promote the construction of intelligent factories by blending digital, network and intelligent technologies into each and every process of our intelligent, environment-friendly, flexible and sustainable manufacturing. In 2006, the Packaging Business Division of Shanying International became a strategic
supplier of cartons for Budweiser Asia-Pacific. Affiliated to the Packaging Business Division of Shanying International, Xiangheng Package owns a top-notch Package Printing Engineering R&D Center, a CNAS-certified professional laboratory, and 30 wholly owned subsidiaries specialized in the production of paperboard and carton in different provinces and municipalities of China. Depending on our full industrial chain advantages, our package production capacity has reached 2 billion ㎥/year and our products are widely applied in different industries such as household appliances, electronics, food and beverage, chemicals, medicine, garments, shoes and hats, hardware and auto parts. Our clients include Budweiser, Danone, Wal-Mart, Home Depot, Target, Dell, BOE, Foxconn, Philips, UPS, SC Johnson Wax, Kao and Haier. Shanying International has cooperated with Budweiser for nearly 15 years and today we provide the dozens of Budweiser breweries in China with cartons of around 120 million ㎥ each year. We have established a firm relationship of interaction and mutual trust with Budweiser and in new forms of business with sustainable development, we provide them with integrated package solutions, covering creative package design, structural optimization design, package business consulting, package printing technology training, production & manufacture, value-added service of customer experience, order distribution system design, and carton production process improvement. In the future, we will provide Budweiser with green package design schemes of individuality, a light weight, reusability, recyclability, renewability and degradability (3R1D), in accordance with our independently developed guides to the transport packaging design of various products and based on such big data platforms as the Buffer Coefficient and Energy Absorption Database.
point of view and bring purpose to our
lost in translation. “Doing the right thing
brands with our sustainability agenda,”
sounds so easy on paper and indeed it
he says. “We have a responsibility as a big
can be,” he says. “It's about recognising
entity, we use resources and we want to
your responsibility between the brack-
use them in the most efficient way, and
ets and looking at the levels within your
at the same time have a positive impact
value chain and implementing the right
on our society and environment.”
techniques in order to deliver on the
This idea of moving beyond simply doing the right thing \ and into a position
promise of real sustainable change.” The challenge of working towards
of having a positive impact is something
sustainability targets is that these targets
that is extremely close to the heart for
and the very definition of sustainability is
Clysner, and with a consumer base that
fluid, as it shifts for each and every part of
is becoming increasingly switched on
the procurement and supply value chain.
to the environmental responsibilities of
Budweiser APAC works with companies
businesses, the ‘right thing’ can easily be
in paper and cardboard, glass, agriculture
Established in 1987, Huaxing Glass has grown to a world-class integrated company with 15 manufacturing locations, 40 furnaces, 202 production lines as well as global famous customers, offering a comprehensive range of custom glass bottles service with various colors and shapes ranging from Extra Flint, Flint, Clear, Amber, Emerald Green and Printing glass bottles to complete Glass Design, Manufacture and Service. For customer services or to find out more about your business opportunities, please contact Jasmine Lim (E linyan@hxbl.com). 8
UDWEISER APAC T B0086 139 2314 5263 (Mr. Chen Wei) | E linyan@hxbl.com (Jasmine )
“ Sustainability is in our hands. It’s up to us to manage and focus on because we have the knowledge or we know whom to work with to get it done” — J A N C LY S N E R , V P P R O C U R E M E N T A N D S U S TA I N A B I L I T Y, B U D W E I S E R A PA C
- all very different raw materials with their
feet. All of them are driven by the same
own process in place. Their individual
vision and this huge network with vary-
understanding of and capabilities around
ing degrees of maturity on this journey
sustainability is different. Clysner adds;
is something that Clysner can tap into
“That's where we aligned all our four key
in order to identify and apply best prac-
goals. Smart Agriculture, which is water
tices in his own region. This comes down
and elements which are key ingredients
to the way in which the business is struc-
for our products. Our products are our
tured. Sustainability in procurement is not
beers, which is packaging and circle of
spoken of or handled as an independent
packaging. One way or the other, you need
category, instead Clysner has people in his
a packaging material, carry it, to bring it
team that are procurement and sustaina-
to your consumers, and of course, there’s
bility focused that have either a regional
our carbon footprint. Our carbon footprint
or countrywide responsibility. These
stretches right from the farmers, all the
procurement people, no matter here they
way up to and including the refrigeration
are situated in the world, have a coun-
required to deliver it cold to our consumer.
terpart that they can communicate with.
“The targets are close to our core business,
“There is a lot of global interaction within
and there we can truly make a difference now,
procurement for many reasons. Category
and start making a difference going forward.”
managers discuss global sourcing and
As a global entity, AB InBev has businesses
supply strategies and they also interact to
the world over. Some of these businesses
learn and share best practices. That's how
are further along this sustainability journey
we treat sustainability as well,” he says.
than others, some are just finding their
“Of course it varies to a certain extent, 9
but ultimately we have a fairly flat structure where every counterpart in my organization knows who to go to, whether it’s day-to-day if it's very integrated or less rigid or on a monthly basis if it's about best practice sharing. That's where our global colleagues are very important for us. They can help us to get extremely quick visibility on good examples that are happening across the world, disseminate knowledge and bring them to Asia, or at least give the visibility where we can then see it would make sense to apply something similar or help us with the implementation.” This flat structure that Clysner points to proves crucial in not only establishing, but truly fostering a culture within procurement and the broader business. This culture is defined by our 10 key principles that sit at the very core of the business: “These principles are not just something that we pin up on the wall and say this is our company culture. We live and breathe them each and every day. It's about ownership and leading by example,” he says. “We try to give people clear targets. People are, obviously, motivated to deliver on their targets, so we have to make sure that our people have the right targets. If people have the right targets, the right mindset and the right ownership then the right things are happening.” Procurement is a relationship based environment and people are crucial to striking and fostering the right relationships with key suppliers so that when it comes to driving growth, change and in this instance sustainable responsibility, these relationships are formed around trust and mutual respect. Budweiser APAC of course has a huge supplier footprint from farmers to manufacturers and distributors and each relationship has its own nuances and complexities. It's important for Clysner to highlight this and stress 10
BUDWEISER APAC
11
that there is no ‘one size fits all’ approach
the right moments to them,” he says.
to any of them. He points to the relation-
“For those individuals, it's much more
ship with the farmers as an example.
focused on cooperation with these farm-
“With farmers it's a very particular
ers, and making sure that we can provide
working relationship, because it's not
support to them. You never know with the
your traditional negotiation like we do
harvest. There's not a single year which is
with some of our big suppliers. In India
the same as the previous, but you can do
we've got teams that are 100% focused
things to maximize the harvest. Because
on those farmers. We give them targets
if you maximize the harvest, it's good for
such as they have to make sure that the
us and it's good for the farmer because it's
barley we get is best for the quality that
good for his income. That is a completely
we need, but we also give them targets to
different cooperation and management
make sure that they provide the neces-
of your suppliers, in this case, the farmers,
sary amount of training and support to
than if you are talking to a glass manu-
those farmers and that they reach out at
facturer who delivers you thousands and
12
BUDWEISER APAC
thousands of bottles on a yearly basis.” Ultimately, the one commonality through-
capabilities the suppliers have, we work with them to get them to the
out the supplier relationships (however
level that we want and need them to be
big or small) for Clysner is striking the
in order to drive sustainable change.”
right balance between innovation, qual-
The relationships are measured on key
ity, cost and the ability to deliver it on
goals and metrics, for sure, but they're
a timely basis. Sustainability, as mentioned
built and fostered on key conversations.
above, is not a separate part of this; it goes
These conversations need to be open
hand-in-hand with it. We do operate and
and transparent when dealing with costs
we do cooperate in sustainability, slash,
and efficiencies and even more so when
innovation as well. Again looking at farmers
dealing with sustainability. Clysner and his
as but one example, Clysner notes that
team strive to be as direct as possible with
Budweiser APAC is there to help them
suppliers because he firmly believes that
because if they do well, it immediately
it allows Budweiser APAC to better manage
impacts Budweiser APAC and drives the
risk and to act fast when things go wrong.
sustainability conversation forward. “Depending on the supplier, sustainability
“Whatever the plan is, we can debate for days and months on it but the only thing
is right there at the heart of it,” he says. Is
we know is that it never is fully executed
it through water? Is it through electricity?
as per plan,” he says. “The whole chain is
Is it through the use of recycled content
too complex. Sometimes it's the weather,
in packaging material? These are all a part
sometimes it's a machine but things do
of the decision process. Then, of course,
go wrong, and communication is key.
depending on the country and what
“This is good for suppliers because
“ Ultimately, in order to achieve our goals as a business, we need the right suppliers who will allow us to grow” —
J A N C LY S N E R , V P P R O C U R E M E N T A N D S U S TA I N A B I L I T Y, B U D W E I S E R A PA C
13
14
BUDWEISER APAC
“ It’s up to us to decide on the road which we want to follow. The journey is not over yet. It’s a never-ending test for all of us, including our suppliers, to see how successful we can be” — J A N C LY S N E R , V P P R O C U R E M E N T A N D S U S TA I N A B I L I T Y, B U D W E I S E R A PA C
they can show what they're capable of and their agility. That's where sustainability becomes an additional tool in your communication with the supplier. You can look at it as a burden, as the problem, something else that you need to work on, or you can look at it as another facilitator in your discussion. It's an engaging discussion that most of the suppliers want to participate in. I think that's how to approach it and how you bring people along on the journey successfully.” One thing that caused significant disruption is the COVID19 pandemic. AB InBev and Budweiser APAC have not been immune to the challenges faced as a result of the pandemic, but by having these conversations with the suppliers, the company has been able to collaboratively mitigate the challenges as best as possible. “Our first priority was the safety of our own people first. Then we started working with our suppliers to see if we could support them on a case-by-case basis,” he says. “Sometimes it's by giving them orders early, sometimes it's through payments or giving them visibility on what we know is going to happen earlier than we probably would do but it was about asking; How can we help you? 15
Jan Clysner VP Procurement and Sustainability Budweiser APAC
16
BUDWEISER APAC
Because we need you going forward.” In spite of the COVID19 pandemic,
for all of us, including our suppliers, to see how successful we can be. During
the future looks incredibly bright for
those moments, you really see who
procurement and indeed sustainability
are the ones that you can count on.
at Budweiser APAC. With solid founda-
“In the end, it doesn't matter what kind
tions in place, Clysner can look to the
of contract I have with a supplier; if we
future with a certain degree of opti-
cooperate badly, if our communication
mism as 2025 comes closer and closer.
among the two of us is poor, it will be
“Sustainability is in our hands. It's up to
tough in a normal situation. And it's prob-
us to manage and focus on because we
ably going to become impossible during
have the knowledge or we know whom
such a crisis like COVID, so communi-
to work with to get it done,” he says.
cation and cooperation are even more
“It’s up to us to decide on the road
important. I do believe that we have some
which we want to follow. The journey
very good and solid suppliers that we can
is not over yet. It's a never-ending test
continue to drive real change with.”
17
www.ab-inbev.cn