Supply Chain
Local vs Global:
How AB InBev Is Helping to Change the Debate

Here in Idaho, we’re the number one barley-producing US state. But how much of that barley (and the profits from it) remains in the state, or even in the region?

This is the type of question advocates for sustainability ask. We want to buy local and help sustain our local businesses. We want fresh farm produce delivered to our local businesses—such as Co-ops—where we buy the produce and help these farmers grow more crops. The local business profits, the farmer profits, and hopefully, our health is bolstered by environmentally conscious growing practices the farmer employs.

At first blush this might not be obvious, but the barley question is a big deal. Here’s why:

• Roasted barley, or malt, is one of the primary ingredients in beer
• Anheuser-Busch InBev is the number-one producer of beer in the world, with about a 25 percent market share in an industry that generated $101.5 billion in sales in 2014
• AB InBev, therefore, has a vested interest in Idaho barley production, which came to about 48 million bushels of barley in 2014

So, ostensibly the local sustainability champion would blanch at this situation. Why? Because the majority of Idaho-grown barley profits don’t remain in the state. The business that profits most from Idaho barley is AB InBev, the largest buyer of Idaho barley in the world. Idaho water, Idaho work, the Idaho crop — all go toward lining the pockets of a multinational corporation.

Is this necessarily a bad thing? There are plenty of articles on this website alone touting the environmentally conscious practices of the AB InBev conglomerate. The company is committed to reducing water risks and “improving water management in 100 percent of their key barley-growing regions in partnership with local stakeholders.” They’re doing this with the SmartBarley program, which uses advanced agronomy science and metrics to help barley growers grow a better product with less water. The goal is to reduce water usage by 9.6 percent.

As a result, Idaho growers now have more information and knowledge on best practices for growing barley than ever before. In turn, this means more production, more sales, and more profits for the growers, with that money potentially going back into sustaining the Idaho economy in a number of ways. Growers can buy supplies from Idaho vendors, they can send their kids to an Idaho college, and hopefully the kids don’t need loans because the AB InBev buck padded the college fund.

Additionally, if Idaho barley producers were committed to selling only to Idaho brewers, would the brewers even be able to absorb all the barley? Idaho ranks 23rd in the nation with a total of 43 craft breweries. In 2014, Idaho breweries collectively ranked 35th in production, putting out around 58 thousand barrels of craft beer. Of course, the counter-argument here, if barley producers were selling only to Idaho brewers, the brewers would be number one in the nation in terms of production. If Idaho grows the most barley in the nation, we could easily produce the most beer in the nation.

Ultimately, if the claims are true and AB InBev is committed to conserving water and reducing its carbon footprint, the local sustainability champion would be railing against them based on principle. This principle - that says that keeping our money local is the best way to sustain our local economies – is a hard one to shake. Interestingly enough, when I buy a locally brewed beer, chances are I’m not buying locally produced barley. To the extent that it’s a free one, the market dictates this reality.

Here in Idaho, we can be happy AB InBev is helping barley producers conserve water. And, we can be happy the company wants to reduce its carbon footprint, because we need the glaciers that produce runoff. Our biggest craft brewery, Grand Teton, uses that glacier runoff to make its beer.

What we’re seeing from a multinational company is efforts at global sustainability. With its efforts to help local barley producers work smarter, AB InBev is sending the message that global sustainability starts at the local level.