The hop industry’s value chain includes many protagonists and processes. This results in various interfaces that may have an effect on sustainability. Thanks to our company’s development from a marketer to a provider of hop-related services, the range of approaches we can adopt to create added value for our customers and simultaneously reduce our ecological footprint have increased. Thanks to our strategic cooperation with growers, customers and service providers, we are able to implement direct and indirect measures to drive sustainability development throughout the entire industry.
Through measures such as the BARTH growers’ learning system we are able to make hop growers consider issues of sustainability more fully, thereby ensuring that all growers engage in sustainable production.
Our Purchasing department is a key contributor to the creation of a practical sustainability system for hop growing in the working group “Sustainability in Hop Growing” led by the growers’ association “Hopfenring”.
It is important to meet our customers’ requirements in terms of sustainability. The Sales department is responsible for communicating specific customer requirements in this regard, coordinating audits, and generating the necessary data and documentation.
Between the growers and the brewers, raw hops must be processed into various hop products. The cone hops are pelletised at our hop processing plant Hopfenveredlung St. Johann GmbH & CO. KG, while any subsequent CO2 extraction is done at NATECO2 GmbH & Co. KG in Wolnzach. We are constantly looking for ways of minimising the impact on the environment of the production processes in our plants. This includes using operating materials with the most neutral ecological balance and greatest efficiency possible and also realising projects such as a heat recovery system that was installed during the period under review.
Besides product and quality provision, our measures at customer level are concerned primarily with logistics. By reducing the logistical complexity of raw material procurement, we are able to protect the environment and at the same time ensure better security of supply for brewers.
Our think tank, which addresses all parties involved in the value chain, is an important factor for our sustainability. The think tank is the collective term for our skills in research and innovation and our expertise and advice. The performance of our think tank enables us to stand out from the competition and provides strong sustainability drivers. On the one hand, we are able to create better, more sustainable products through our own research and development. On the other, our active involvement in the scientific field and institutions helps us maintain intensive stakeholder dialogue up and down the supply chain, as we are able to share our findings with growers and customers through our advisory service.
Trust-based, long-term cooperation.
Our purchasing philosophy focuses on the development of trust, on partnership and on a long-term approach in our cooperation with our growers. We consciously invest in our relationship with our most important suppliers and aspire to become their long-term partner, rather than a short-term buyer. This is because it is only through long-term collaboration that both parties can set and achieve common goals. The focus here is not only on the individual advantages for both parties, but rather and above all on sustainability and on jointly developing the industry. With regard to our purchasing philosophy, partnership in practice means maintaining our position on the market with care and vigour in close collaboration with our growers – and thus playing a proactive role in shaping the future of hops and, with it, the success of our growers’ operations.
We are well aware that in today’s market conditions there is constant competition for hop growers – especially for those who act very flexibly and display a high degree of initiative. That is why we make intensive efforts to be attractive to our hop growers as a customer and to remain so. We hope to achieve this by becoming better together with our growers as a “value chain” and by offering them very special added value for their farms.
It is essential for us to understand our growers’ potential and their value creation conditions and at the same time establish good relationships based on partnership. We developed the BARTH growers’ learning system to systematically continue this process of getting to know and understand our growers. Tools such as the Growers’ Advisory Board, the BARTH Hops Academy and also our measures to ensure supplier retention are designed to generate benefits and expand skills.
Barth Growers Tours
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The Barth growers’ tour has become an established tool for our stakeholder dialogue. Our hop growers are very interested in hop production conditions and growing methods in other countries. That is why we organise tours for them to other countries linked to hop production. Besides hop-related issues, however, it is above all the culture, mentality and traditions of the destination country that make a lasting impression on the growers. The fact they are able to have these experiences together with Barth strengthens our relationship. In summer 2013, we organised a tour with 27 growers from Tettnang to Yakima, followed by a visit to Tettnang’s biggest customer, the Boston Beer Company in Boston. In summer 2014, we went with the Barth Growers’ advisory board and other suppliers to Yakima and Oregon, the two biggest American hop-growing regions. During a production facility visit, the growers were able to get a sense of the significant differences between German and American hop production. A typical American barbecue, a trip across the glacier in Mount Rainier National Park and a tour of Seattle were also on the itinerary.
The next Barth growers’ tour will visit England in 2016. It sold out shortly after it was announced.
Hop growers from Tettnang in the Boston Beer Company’s brew house
Participants in the Barth growers’ tour to the USA with employees of Joh. Barth & Sohn and John I. Haas
Barth Schafkopf tournament
For us, our “Schafkopf” tournament is a tool for dialogue and a means of preservation of Bavarian tradition in one. A report on Bavarian radio claimed “Schafkopf is in danger of extinction!” This prompted us to organise a tournament that would keep alive this traditional and demanding card game. A positive side effect was the development of a totally new, open dialogue of the type that can only arise through relaxed interaction.
The Barth Schafkopf tournament took place for the fifth time in 2015 under the banner of social sustainability. It is organised exclusively for hop growers. Entry for the tournament is free of charge and the winners pick up high-quality prizes and an award. This incentive, combined with the prospect of an entertaining evening, ensures a large number of entrants each year.
BARTH GROWERS’ LEARNING SYSTEM
Progressing together. Constantly improving.
The BARTH growers’ learning system is a management concept that lays emphasis on the hop growers’ responsibility for the productivity and capacity for innovation of the whole value chain. The aim of this concept is to create an even closer relationship with the strategically important growers, to further develop their potential and also to gain new growers for us. By maintaining and emphasising the long-term customer-supplier relationship and offering specialist advice, the BARTH growers’ learning system succeeds above all in persuading growers to implement the concept of sustainability in practice. Other aims of the system are a better exchange of information on technical questions, more efficient processes and the avoidance of conflict. We want close cooperation with the growers to provide us both with flexibility and increase our shared agility versus the competition.
The BARTH growers’ learning system can be used to systematically categorise suppliers and assess their performance in order subsequently to jointly adopt measures for grower development so that they develop a sustainable attitude. To achieve this, the concept has to be equipped with useful tools which the hop growers can recognise as containing added value for them and which, if possible, should be quantifiable in financial terms.
The basis for the system is the categorisation of hop growers according to their current turnover and their future potential.
This determines the different types of hop grower:
Suppliers: turnover with Joh. Barth & Sohn is more than x% of their production
Growers: turnover with Joh. Barth & Sohn is less than x% of their production
Basic category: performance potential is below a defined value
Top category: performance potential is above a defined value
In order to actively manage the development of our entire supplier portfolio, we have to know where a grower stands and where he wants to go. The aim is to use appropriate measures to develop the basic growers into basic suppliers and the top growers, as well as the basic suppliers, into top suppliers and to keep them at the highest level possible. The BARTH growers’ learning system describes the systematic development, care and controlling of our business relationships with the growers.
SYSTEMATIC POTENTIAL AND PERFORMANCE APPRAISAL
The assessment of a supplier’s potential is carried out using various comprehensible weighted criteria whose values are defined on a scale and calculated in a scoring model. In 2015 the appraisal criteria were expanded to include the component “sustainability”. What is known as a supplier number is used for identification purposes and serves as a simple and quick way to describe which supplier category the grower is assigned to.
Potential and performance appraisal and the resulting categorisation were last carried out in 2015.
Dimensions of the Supplier Relationship
Of decisive importance are the frequency of assessment and the consideration of the following dimensions of the supplier relationship:
Competence (practical support, experience, special services)
Intensity (frequency and depth of interaction)
Reciprocity (common interests, commitment of both partners)
Recognition (personal acceptance, confirmation, recognition as equal partner)
Likeability (affinity, individual closeness, “chemistry” between the partners)
MEASURES FOR SUPPLIER DEVELOPMENT AND RETENTION
The supplier number and the supplier relationship dimensions provide initial indications as to which measures are suitable for supplier development. We compile a suitable package of measures for our suppliers in accordance with the current supplier profile. There is a comprehensive and sophisticated range of measures, including:
Information tools (e.g. BARTH growers’ portal on the Internet, BARTH fax, BARTH growers’ advisory board)
Advisory services (advice from our knowledgeable purchasing experts on all areas of hop production)
Cultural and social measures (e.g. BARTH Schafkopf tournament, organised growers’ tours to international hop-growing regions)
BARTH HOPFEN-AKADEMIE training courses
CONTINUOUS FURTHER DEVELOPMENT REGARDING SUSTAINABILITY
Systematic development and cultivation of the different qualities in our suppliers means:
Creating performance profiles and
Regularly assessing the effectiveness of the agreed measures
We are convinced that this will enable our core values and our standards to be transferred to our suppliers in order to enhance their awareness for sustainable working practices.
Joh. Barth & Sohn has been a member of the German hop industry’s working group for sustainability in hop growing since 2012. In this group chaired by the growers’ association “Hopfenring” we have actively participated in creating and defining the sustainability criteria for German hop growing. The system for verification and review of sustainability developed by the working group was first used in crop year 2014 as part of a pilot project with German hop growers. The basis for the sustainability self-check for hop producers was provided by the criteria contained in the checklist of the SAI Platform (SAI = Sustainable Agriculture Initiative). This platform is used today by many leading international groups in the food and beverages industries.
Thanks to the communication tools we created, it was possible to provide growers with comprehensive information about this globally unique sustainability concept in hop growing. We are certain that the competitiveness and future sustainability of the German hop industry will be strengthened by the introduction and participation of the growers.
In our last report we set ourselves the aim of developing internal data capture and information systems for our sustainability requirements. Since 2014 we have been able to assess the information obtained in order to use it for the analysis of supplier potential and visualise the availability of “sustainably produced hops”.
In 2014, 15% of our contract growers took part in the “Sustainability in Hop Growing” pilot project. This percentage rose in the following year to 33%, and there is already evidence of another considerable increase for the 2016 crop year. We see this as confirmation that the issue of “sustainability in hop growing” enjoys a high degree of acceptance and significance for our growers. This is a foundation on which we can build to further drive sustainable hop production.
OUR OBJECTIVES FOR THE YEARS AHEAD:
Further improvement in methodology for measurability and data collection regarding “sustainable hop growing”
Joint projects and initiatives for environment and energy projects
Development of new and innovative concepts for sustainable supplier retention
Active support for Hopfenring in the further development of the “Sustainability in Hop Growing” system
Figures. Data. Facts.
These performance indicators show the impact of our resource consumption and disposal as environmental indicators. The effects of Joh. Barth & Sohn’s activities in its Nuremberg, Mainburg and Tettnang locations are included, as well as our hop processing plant in St. Johann and NATECO2 in Wolnzach.
The calculated consumption is shown according to the energy carriers on the one hand and according to where energy was consumed on the other. In contrast to previous reports, we have listed each of our processing plants individually. It should be noted that energy consumption is not only influenced by the quantity of raw hops processed, but that it also depends on other factors such as the weather and product portfolio. Of particular note in this regard are the huge amounts of heating oil we were able to conserve thanks to our new heat recovery system at the St. Johann processing plant.
ENERGY SAVING THROUGH HEAT RECOVERY
In the period under review we were able to complete a significant energy project at our processing plant Hopfenveredlung St. Johann GmbH & Co. KG , and thereby achieve huge savings. Storing and processing hops requires a large amount of energy for heating and cooling. On the one hand, large amounts of heat are needed to dry the raw material, while on the other, temperatures far below freezing point are necessary to produce enriched hop pellets.
As part of its ISO 50001 energy management system, the St. Johann hop processing plant therefore produced an action plan with the aim of conserving energy by installing a heat recovery system. This is based on a simple principle: the surplus heat energy that arises from the creation of cooling energy for the concentration process should be used to meet the need for heat energy for hop drying. This means that heating oil no longer has to be burnt to produce the energy for this process. Not only are fossil fuel resources conserved thanks to this measure, but economic savings are also made. In December 2014, the heat recovery system in St. Johann began operation and has since delivered impressive results: we have been able to reduce effective annual oil consumption by up to 89%. We are of course proud of this huge conservation of fossil fuel resources, but what we consider particularly significant is that this type of project proves that there are sustainable solutions available when you look for them.
The total water consumption measured for Joh. Barth & Sohn amounted to approx. 3,408m3. The water consumption attributable to the processing plants was approx. 6,772m3.
The water discharge volume at JBS is smaller than at the processing plants. As this refers exclusively to municipal water supplies, for the sake of simplicity we have assumed that all directly attributable waste water (with the exception of water used for watering at our Nuremberg headquarters) returns to the municipal waste water disposal facility in the same quantity.
Waste water discharge attributable to the processing plants can be measured directly. It amounted to 3,893 m3 in the 2014/15 fiscal year.
WASTE AND EMISSIONS
The total weight of waste recorded in the 2014/15 fiscal year was approx. 4,581t, of which 4,525t was caused by the processing plants.
Waste disposal is handled exclusively by the municipal disposal service and by special service providers (e.g. for document disposal).
Computer and electronic waste which occurs at irregular intervals was not taken into account.
Directly produced wastes are almost exclusively recycled by the conventional municipal disposal service through recycling/reuse and through the waste disposal site and other forms of disposal.
Indirectly produced waste was processed mainly via direct reuse and alternative use (e.g. spent hops used as animal feed) and by recycling/recovery performed by special service providers.
Direct and indirect greenhouse gas emissions and other important air emissions (NOx, SOx) were not taken into account, as the recording techniques still need to be developed.
Although the environmental impact of the reporting organisation caused by the transport of products, materials and people is not recorded specifically, our guidelines point clearly in the direction of sustainability.
“FROM THE ROAD TO THE RAILS”
In our last sustainability report we made it our aim to increase the proportion of shipments made by rail and reduce the use of lorries. Above all, this concerns the precarriage of loaded containers from the processing plants and warehouses in Southern Germany to the ports. The fact that precarriage normally requires more time by rail than by lorry has to be taken into account. This means very urgent shipments and deliveries during the summer – given that raw hops and hop pellets are sensitive to heat – are excluded from this. Nevertheless, through good planning and prudent customer communication, we were able to increase the proportion of rail use from 36% to 46%. This success vindicates us in our pursuit of sustainability and motivates us to continue shifting our shipments from the road to the rails. Our aim is to increase the proportion of shipments by rail to at least 50% in the 2016/17 business year.
Many other projects and activities have enhanced our sustainability since we published our last report:
CO2 CONSUMPTION FROM GOODS TRANSPORT
Our freight forwarders use modern vehicles compliant with the Euro 6 emission standard. They also make use of technical innovations, such as assistance systems that automatically change gears in city traffic and traffic jams.
In our logistics operations, weight and shipment size are important criteria for achieving the most environmentally-friendly shipping possible. We try and exploit both the available volume and the maximum total weight of every lorry to achieve sustainable optimisation. Through forward-looking planning, deft coordination and efficient usage, we are sometimes able to cut out entire trips.
Unfortunately, despite these efforts, the number of our goods deliveries has risen by over 60% in the last seven fiscal years. This is primarily due to the fact that many customers are destocking in order to reduce their working capital. The volumes of individual shipments are thereby reduced, while the number of deliveries often increases many times over.
We will therefore increase our efforts to persuade our customers to place larger call-off orders in order to achieve more environmentally friendly shipments and conserve packaging material.
Another aim in the interests of conserving resources is to reduce our paper consumption. This is nevertheless made more difficult by the considerably increased number of individual deliveries. For each individual shipment, documentation has to be produced not only for us, but also for the processing plants and the customers.
In order to counteract the increasing volume of paperwork, since September 2015 we have been using an Internet platform to make processing-related documents available in digital form so that we can process them jointly with our processing plants. An Internet platform is available for our internal company communications and for data exchange with some of our large customers, allowing documents to be saved and accessed by authorised users only. We have also agreed paperless data transfer with the most important research laboratories.
Thanks to these digitisation measures we have been able to reduce printout numbers, meaning that despite the aforementioned increase in the number of call-off orders our paper consumption has remained unchanged. We will continue to work to reduce our paper consumption.
ENVIRONMENTALLY-FRIENDLY ADVERTISING GIVEAWAYS
By carefully choosing advertising giveaways that are useful and responsibly manufactured, we seek on the one hand to act in an environmentally friendly way ourselves and, on the other hand, to pass on this concept of sustainability to our stakeholders through the gifts. Our new ballpoint pens are made of organic plastic sourced entirely from renewable raw materials, and are also fully biodegradable. Our bags are made of pure natural materials (cotton, felt and jute), with some bearing the Fairtrade seal.