CS4: Project Draft By: Aaron Hinkle, Paxton Miller-Fitzpatrick, Britney Overgaag, and Michael Tootle I. Introduction and Background by Aaron Hinkle Company context: Jack Daniel’s Distillery is a subsidiary of Brown Forman Corporation who is one of the largest American owned companies of wine and spirits. It was founded 1875 by Jack Daniel in Lynchburg Tennessee (which is still home to the only Jack Daniel’s distillery) and purchased by Brown Forman Corporation in 1956. They produce a sour mash Tennessee whiskey that is currently the best selling American Whiskey in the world that is iconic for its square bottles and black labels. Jack Daniel’s product line includes: Old No. 7 which is the original Jack Daniel’s 80 proof, Gentleman Jack: which is a charcoaled filtered version of Old No.7, Single Barrel: which is sourced from a single barrel at 94 proof, Tennessee Honey: which is blended with a honey liqueur, and Silver Select: which is a 100 proof version of Old No. 7 only available for export. Product context - Jack Daniels Old No. 7 Tennessee Whiskey: Also known as Jack Daniel’s “black label” is an 80 proof sour mash Tennessee Whiskey. Old No. 7 is Jack Daniel’s flagship product that is a cultural icon, selling 11 million cases per year (insert citation). Current State of Operations: Brown-Forman is taking company wide action in order to reduce their environmental footprint. They have already surpassed their company goals of reducing GHG emissions and energy use by 30% by 2020 and they progressing towards accomplishing their goal of reducing wastewater by 30% by 2020. II. FlowChart by Aaron Hinkle III. Scope By Aaron Hinkle We will trace CO2 emissions related to the production, distribution and consumption of one bottle (750ml) of Jack Daniels Old No. 7 Tennessee Whiskey from the Lynchburg, Tennessee production facility to Redlands, CA where it will be consumed. IV. Product Life Cycle Assessment by Aaron Hinkle Extraction Raw Materials Agricultural Crops: Farmed crops account for a large proportion of Jack Daniel’s environmental footprint. Factory farming has a serious impact on the environment as these farms utilize fossil fuels to power farm equipment and nitrogen-based fertilizers run off killing streams and rivers as well as creating dead zones. EPA estimates state that upwards of 8%of total human carbon emissions come from agriculture. The production of the agricultural crops used in Jack Daniel’s has the largest environmental impact out of any of the raw materials that go into the making of Jack Daniel’s (Brown Forman). 1 Yellow Corn: Type 1 Yellow Corn is classified by the USDA as corn that is yellow kernelled and contains no more than 5% of corn of other colors. Jack Daniel’s uses premium rain fed corn grown in the Midwestern United States. Factory farmed corn has a high carbon footprint with .53 lbs. of CO2 emitted. (United States Standards of Corn). Rye: Production of rye has the lowest carbon impact of the agricultural crops used, emitting .05 lbs. of CO2 Barley Malt: Behind corn the barley malt has the second largest carbon emissions impact out of the agricultural crops used with .21 lbs. of CO2. Agricultural Crops CO2 Emissions Breakdown Rye 8% Barley 23% Corn 69% Iron Free Cave Water: Jack Daniel’s gets their water from Spring Cave located in Lynchburg Tennessee. Drought conditions since 2007 have greatly increased the scarcity of water putting production in jeopardy. Plant manager Jerry Hamilton says that if they don’t have iron free cave water they cannot produce Jack Daniel’s because using a replacement product would decrease the quality. The availability of Jack Daniel’s water supply is dependent upon avoiding fertilizer runoff and protecting local aquifers (Is Jack Daniels Drying Up?). Estimates show that water use plays an insignificant role in terms of CO2 emissions, accounting for .00002 lbs. of CO2 per bottle produced. American White Oak Wood: Jack Daniel’s is the only Whiskey maker in the world that produces their own barrels (6,059 barrels in smallest warehouse) for use in the production process. They use American White Oak for production of their barrels. American White Oak (also known as Quercus alba) is grown throughout the eastern United States and although deforestation remains a serious issue in the United States, NatureServe lists the American White Oak as a secure species (USDA White Oak). Due to the fact that Jack Daniel’s is unique in the fact they produce their own barrels we are unable to provide a reasonable estimate of the CO2 emissions regarding the barrel making process. Charcoal Mellowing: Produced onsite at the distillery in Lynchburg Tennessee at the outdoor “Brick Yard” facility using old pallets and scrap wood. The burning and creation of charcoal emits pollution and C02 into the atmosphere. We recommend that surveys be conducted in order to determine the exact carbon footprint caused by their charcoal mellowing process (How Jack Daniels is Made, 2012). Analytical data regarding the emissions caused by charcoal mellowing would allow for proper decision making in regards for possible plans of action to mitigate emissions caused by the charcoal mellowing process. Glass: Jack Daniel’s handles their own bottling needs at a highly custom automated bottling plant less than two miles away from the main distillery, glass bottles are 100% recyclable and having the plant onsite reduces the impact caused by the transportation of bottles and product (Edwards, 2003). The production of glass bottles however has a very significant carbon impact emitting about 1.2 lbs. of CO2 per bottle. Production Listed below is a 7-step process that describes the physical production process of what goes into making a single bottle of Jack Daniel’s Old No. 7 Tennessee Whiskey. Included throughout the 7-step process are emissions data, where applicable. 1. The Corn must be beaten and crushed large hammer mill; hammer mills are powered by fossil fuels and electricity. This accounts for .30 lbs. CO2 of emissions. 2. 10k gallons of water must be heated and cooked with the corn and sugar. Electricity used for heat and other processes is estimated to emit. .10 lbs. of CO2. 3. The mash is left in large sealed tanks with yeast for 3-4 weeks. These tanks must maintain their warmth, thus energy is required to maintain temperature. 4. Distilling the mash requires vast amounts of energy. Mash must be heated to the evaporation point, and then cooled rapidly. About 2.1 lbs. of CO2 are emitted in the average pot distillation process. 5. After distillation is aged in barrels, this process does not have a large carbon footprint, only about .32 lbs. of CO2 are emitted in this process 6. After the aging process the entire finished product must be bottled. The bottling plant uses large amounts of energy due to the fact that it an automated process. The average 750ml glass bottle contributes about .16 lbs. of CO2 emissions. 7. The product is transported to warehouses where it is ready to be transported for distribution. The warehousing of the bottle accounts for .62lbs of CO2. (Beverage Industry, 2012) The total emissions for the production of one bottle of Jack Daniel’s comes out to be approximately 3.6 lbs. of CO2 emissions per bottle of Jack Daniel’s produced. Production Emissions Breakdown Hammer mill use 8% Mash cooking 3% Bottling 4% Aging process 9% Warehousing 17% Mash Distilling 59% Distribution Once the product has completed production and been warehoused it is ready for distribution to retailers. Jack Daniel’s is most commonly transported by rail or road reroute to retailers. Our estimates show that transportation of final product to retailers emits .41 lbs. CO2 of per bottle, which accounts for about 7% of total carbon emissions. Consumption The consumption process has the lowest carbon impact of all the stages assessed during our lifecycle analysis. The two contributing factors in respect to consumption emissions are electricity use and refrigeration of storing the product. Our estimates show that per bottle the consumption process accounts for .13 lbs. of CO2 emission Waste In terms of waste Jack Daniel’s is primarily responsible for producing water waste as well as solid waste in landfills. Parent company Brown-Forman has set forth ambitious environmental goals of reducing waste and Jack Daniel’s has responded positively to these goals with 99% of by-products being reused or recycled and less than 1% being sent to the landfill. There are clear examples of the symbiotic relationship between Jack Daniel’s and the community in order to prevent waste. Examples include: In fermentation, they take a cooked mixture of cave water, grains, and yeast to produce alcohol. By-products from fermentation are sold to local farmers as feed for their livestock. In distillation, they use steam to strip the alcohol from the fermenter’s liquid stream. This steam is generated by wood burning boilers, instead of coal-fired ones, that burn the waste wood generated by neighboring industries. The ash generated from their boilers is used as potash for soil improvements by farms. In charcoal mellowing, their distinctive step that makes Jack Daniel’s a Tennessee whiskey unique is that the whiskey drips through ten feet of hard sugar maple in a mellowing vat that is changed out every six months. All of the sugar maple charcoal is converted into smoking pellets at the end of its useful life and is sold to backyard barbecues with none going into landfills. After charcoal mellowing, they place Jack Daniel’s Whiskey into a new toasted and charred white oak barrel where it is transported to one of their warehouses by a biodieselpowered barrel truck for maturation purposes. Of all the wood harvested to make barrels, less than one tenth of one percent goes to landfill. The waste that does reach the landfill is as fine sawdust that actually serves a valuable function in the landfill by creating an absorbent layer to prevent leaching into the surrounding soil. The only significant source of landfill waste in regards to Jack Daniel’s is their product packaging. While they aim to use as little as packaging as possible and their bottles are 100% recyclable, simply due to the amount of product they sell we estimate that packaging waste accounts for an estimated .30 lbs. of CO2 emissions. Note: This figure is simply a rough estimate; we were unable to find concrete data regarding waste emissions. Emissions by product life stage estimation: GHG Emissions Estimations Breakdown by Stage Consumption Distribution 2% Waste 5% 7% Extraction 36% Production 50% Extraction and production account for the vast majority of Jack Daniel’s CO2 emissions. The extraction of agricultural crops and the use of large machinery during production are the two largest contributors to these estimations. Fuel burned from transportation of product also accounts for a significant proportion of CO2 emissions, with a small amount coming from consumption of the product and waste generated from the product’s packaging. V. AUDO Analyses by Britney Overgaag Challenge: Energy: Aspects: High amounts of energy used in the process of distilling and packaging the product Upstream: Retrieving materials. Delivering materials to the distillery. Downstream: Delivering the shipments around the world. Large amounts of water used in product and used to produce the product. Monitor where their water is coming from and what source they are depleting. Where the water is going and how they could recycle the water that they use. Quantity of Waste Management: garbage and waste created from the production and consumption of the product that is not recyclable. Waste created as a result of gathering raw materials from suppliers. Disposal of packaging by customers. Water: Issues: Changing over to a more sustainable delivery system could be costly in the short run. A lot of water is used in the product, but where can they reuse or recycle the water in the process. Customers must make the effort to recycle. Opportunities: Changing over to a more sustainable delivery system will save money in the long run. Refining their process and recycling water can save them money and give them a new marketing strategy. Implementing a reusable bottling system to decrease the amount of new bottles being made. VI. Stakeholder Mapping and Analyses: by Michael Tootle 1) Rule Makers and Watchdogs Government From a government stand Jack Daniels pose a lot of the same environmental concerns that most beverage companies have, water use. However Brown-Forman has taken considerable strides in reducing the amount of waste by 30% in 2020. Because 99% of their by-product is reusable or recyclable, curbing the water waste is key in dealing with future government regulations. Also seeing how it is an alcoholic beverage the glaring issues deal with underage drinking along with drinking related crimes. So the government above anything else would want to see more emphasize on responsible drinking, to prevent said issues. This is not to say BrownForman isn’t doing their part, quit the contrary they have partnered with BeMyDD, CityScoot, and LilyBug in the United States, which are organizations designated to help you get home, be it means of a cab or someone driving you and your car home, whatever they can do to take the excuses of driving drunk away. NGO’s Carbon Disclosure Project: The CDP is a U.K. based organization which works with shareholders and corporations in order to collect data disclose GHG emissions data made by various corporations. Brown-Forman’s Jack Daniel’s Distillery primary impacts to the GHG contributions to the environment lie primarily within their use of agricultural products for the grains used in producing their whiskey product and the amount of waste produced. While Jack Daniel’s parent company Brown-Forman recognizes the need for sustainable agricultural processes their partnership with Wal-Mart is less than ideal. While Wal-Mart is making strides embrace more sustainable practices they still have a less than stellar reputation when it comes to sustainability. Through the partnership with Wal-Mart Brown-Forman we are hopeful they will meet their goal of reducing nitrogen fertilizer on the corn crops used in the production process of Jack Daniel’s, but we still see room for improvement. Brown-Forman has done an outstanding job at their Jack Daniel’s distillery reusing or recycling 99% of their byproducts with less than 1% going to the landfills. They have achieved this goal by improving waste measurements and improving recycling streams with improved data. We applaud their efforts in this department since reducing landfill waste helps reduce the GHG methane. Overall we have ranked Brown-Forman and Jack Daniel’s as one of our “Disclosure Leaders” and we give them a letter grade of B, we like the vision and the progress the company is making but there is room for growth especially in the agriculture department. 2) Idea Generators and Opinion Leaders Media Medias concern would align with the Governments in wanting to prevent all the bad that can come from drinking. In the case of underage drinking Brown-Forman In 2012, formed the Responsible Marketing Pact with seven other major beverage alcohol manufacturers and marketers, in order to commit themselves, among other efforts, to place advertisements only in media where at least 70% of the audience can reasonably be expected to be above legal drinking age. As a result Jack Daniel’s has long had a southern “working-man’s” reputation for being the drink of a hard working self-sustaining man who enjoys hunting, fishing, and the outdoors. We do not necessarily associate Jack Daniel’s with sustainability issues. The media as a whole will not likely spend a great deal of focus on Jack Daniel’s on environmental issues as long as much more apparent environmental stories exist. Academia Brown- Foreman has taken the steps to raise awareness in the two University’s located within their home state of Kentucky. Since 2007, they have funded the Office of Substance Education & Responsibility (SEAR) at the University of Kentucky, whose job is to inform students of the dangers of high-risk drinking and alcohol abuse as well as joining Beam Global in 2011 and funding similar efforts at the University of Louisville using a community coalitionbased model. While University’s across the nation would look to receive similar support this is a start for Brown-Forman which continually has shown its support in helping educate the future by continually funding things like, Building Resiliency in Campus Community Coalition (BRICC) at the University of Louisville. A program that is deploying public health research in its strategies to reduce high-risk drinking and substance use on campus and in the community as a whole. 3) Suppliers and Competitors Suppliers Suppliers in this case are the producers of bottles, and farmers. For the suppliers of all the agricultural needs are those big business food corporation farms that mass produce their ingredients. Brown-Forman claims to be trying a more sustainably approach by their partnership with Wal-Mart, they are part of an effort to look at ways of reducing nitrogen fertilizer on corn crops in the supply chain, which would decrease GHG emissions and improve water quality by reducing runoff into the water system. This puts the pressure on those suppliers to use a more sustainable means of growing crops if they want to have the large contract with Brown-Forman. Even though a company the size of Brown- Forman cannot afford to get the ingredients needed to produce what they do on sustainable farming. The next best thing would be to challenge current and future suppliers to start “greening” their process in order to obtain those big contracts. Competitors: Jim Beam- Beam Inc. Jack Daniel’s and their parent company have been making great strides in reducing waste, promoting sustainable farming, as well as reducing water waste. At Beam Inc. they too have made the environment a focus to protect the future of our business endeavors. They have been reducing our fossil fuel usage at distilleries from 20-40% by implementing renewable resources. They have reduced water consumption by 33% the past year by recycling water at factories. They have also instituted company wide reduce-reuse-recycle initiatives in order to cut back on waste by engineering. Jack Daniel’s and Brown-Forman have been competitive with Jim Beam and Beam Inc. with their sustainability initiatives. They will continue to make efforts to gain a sustainability advantage over Jack Daniel’s distillery, however Brown-Forman’s sustainability efforts do help Jim Beam – Beam Inc. industry as a whole appear more sustainable to investors and consumers. 4) Consumers and Community Community From a community stand an obvious issue would be underage drinking and alcohol related issues. Brown-Forman is on good terms with communities by adding new programs and continual promotion of things like “Buzzed Driving is Drunk Driving” along with the designated driver programs mentioned earlier, in order to constantly build their trust bank with the community. Consumers The typical Jack Daniel’s consumer is not exactly your typical “eco-conscious” consumer. Jack Daniel’s has a long storied history and being based in the South, the type of consumer attracted to their product are not likely to be attracted to green marketing campaigns. That doesn’t mean Jack Daniel’s consumers prefer a wasteful product, the truth is quite the contrary. These conservative consumers want a product that protects their historic way of life, leaving country side clean and the rivers unpolluted not for sake of saving the planet, but rather protecting their way of life that has been passed down from generation to generation. Jack Daniel’s has done an outstanding job of instituting green initiatives without turning off conservative consumers who don’t want to hear about the typical “save the planet” green marketing campaign. 5) Investors and Risk Assessors Employees Brown-Forman strives to create a sustainable and conducive environment not only by how they build their factories but by how they build their employees. Brown- Forman has instituted programs to better train their staff such as Brand Building University which provides summaries of leading business books, to their flagship program. Also Building Leaders And Strategic Thinkers, which brings together a cross-functional team to develop a solution to a real issue facing the company over a period of three to six months, as well as Active Learning Connections, which is A mentoring program which allows employees to create learning groups and find colleagues who can mentor them in their area of interest to name a few. Shareholders The sustainable aggressive sustainable initiatives set in motion by Brown-Forman are show great foresight in not only improving ROI by reducing waste, but also protecting the future of company by recognizing that sustainable farming practices as well as reducing water waste are of absolute importance adapting to a sustainable future. They have been able to achieve progress on these initiatives without compromising the classic brand image of Jack Daniel’s and damaging current sales of products. VII. Green Opportunities by Paxton Miller-Fitzpatrick Green Opportunities and Recommendations 1.) The water situation at Jack Daniels is fragile; the product can only be made using iron free water found in an aquifer under the Lynchburg plant. This provides the opportunity for Brown Forman to inspect their production process with an eye for eco efficiency. Through this production process analysis Brown Forman will be able to find ways to limit their amount of water used in the production of Jack Daniels. This is not overly important for the Jack Daniels brand financially because they already own all the water, but it is important environmentally because there is a finite amount of one of the products key ingredients. Moving further up the production line Brown Forman is now presented with the opportunity to partner with corn farmers that use farming techniques that use less water. This helps conserve water on both ends of the production process leaving enough water for both to continue producing their products into the future. 2.) Since it seems inevitable that the iron free water source below the distillery will one day run out it would be a smart move to look at other ways to expand their supply of iron free water. An opportunity is provided here to help fund research into systems for removing iron from other water sources. This Provides Brown Forman with an opportunity to fund a project that could be profitable as a venture, but also solve one of the largest issues facing the company. There are companies currently working on systems to remove iron and magnesium from ground water, but investments from a company like Brown Forman could really push this development further. VIII. Conclusion by Aaron Hinkle Despite the rugged country image the company portrays Jack Daniel’s has shown to be aggressive in their approach to ensure that their products are sustainable. Jack Daniel’s does not advertise their sustainability efforts to their consumers because they understand it is not something attractive to their market, however they do understand that it is a necessity for the survival of their product. The vast majority of Jack Daniel’s greenhouse gas emissions occur during the extraction and production phases of the product life cycle. Protecting and improving their water supply will prove to be the most important environmental factor relation to Jack Daniel’s business and we believe following the outline provided for protecting and increasing water supply will allow Jack Daniels to continue their success far into the future. IX. Citations Barley. (2012, 06). Retrieved from http://www.agmrc.org/commodities__products/grains__oilseeds/rye/ Beam Inc. Sustainability Guide: Retrieved from: http://www.beamglobal.com/pdf/2011_Sustainability_Guide.pdf Beverage Industry Environmental Rowndtable. "Research on the Carbon Footprint of Spirits." Bierroundtable.com. N.p., June 2012. Web. 20 Oct. 2013. <http://bieroundtable.com/files/Spirits%20Final%20DEP.pdf>. Brown-Forman. (2012). Retrieved from http://www.brown-forman.com/responsibility/ Edward , C. (2003, 04 17). No bottle necks here. Retrieved from http://www.baselinemag.com/c/a/Projects-Customer-Service/How-Jack-Daniels-EasesBottlenecks/1/ Is Jack Daniel's Drying Up?. (n.d.). Retrieved from http://www.wbko.com/news/headlines/7955482.html Rye (2012, 06). Retrieved from http://www.agmrc.org/commodities__products/grains__oilseeds/rye/ Selling Sustainability to Jack Daniel’s Drinkers: Retrieved from: http://www.greenbiz.com/blog/2010/08/27/selling-sustainability-jack-daniels Savage, Steve. "Putting The “Carbon Footprint” of Farming in Perspective."Sustainablog. N.p., 30 July 2009. Web. 20 Oct. 2013. <http://sustainablog.org/2009/07/putting-the-carbon-footprintof-farming-in-perspective/>. United states standards of corn. (n.d.). Retrieved from http://www.gipsa.usda.gov/fgis/standards/810corn.pdf USDA White oak profile. (n.d.). Retrieved from http://plants.usda.gov/core/profile?symbol=QUAL Weston, S. (2012, 12 18). How Jack Daniels whiskey is made. Retrieved from http://www.wbko.com/news/headlines/7955482.html \