Asahi Welcomes Challenges of Operational Complexity

"We were having debates in our boardrooms; chairs were flying. Is this good? Is this not good?" says Preeti Srivastav, Group Head of Sustainability at Asahi Group Holdings.

The Japanese food and drink company produces brands including Peroni Nastro Azzurro, Grolsch and Pilsner Urquell.

The organisation's procurement decisions across multiple markets would need to account for both operational requirements and sustainability commitments.

Supplier negotiations in Poland

Asahi operates 19 production sites across nine European countries. From 2025, all electricity at its European breweries will be sourced from renewable suppliers.

The team joined RE100 six or seven years ago. Contract negotiations revealed pricing below fossil fuel-based electricity rates in that market.

"We came across a supplier in Poland, we actually started the negotiations, and it was cheaper than the cost of the fossil fuel-based electricity in that country at that time," Preeti says. "And then I had nothing more to add. That's the perfect business case when you can see it in real time in the market, rather than showing conceptual numbers."

The Poland contract demonstrated price volatility in energy markets. Procurement teams at Asahi could secure better terms by acting before competitors entered negotiations with the same suppliers.

"We couldn't show that business case in every market, but what that did was it showed the potential of how volatile some of these prices are, how we had to be the first mover to be able to get the best terms and contracts and the best suppliers," Preeti says. "And with that, the dam burst, and we went 100% renewable electricity for all our breweries here in Europe."

Sites in Japan and Australia have also transitioned to renewable energy contracts.

Brand mapping after supplier transition

Communicating procurement achievements to customers created unexpected complications. Asahi placed a windmill logo on products in Poland after securing 100% renewable electricity contracts.

"We put a little windmill as a logo in Poland once we got 100% renewable electricity and we thought that was a very proud moment," Preeti says. "And then turns out it was misleading because then the questions were: 'Oh, are you 100% renewable energy?' And I said: 'No, just the electricity part.' You see, there is a heat part to it as well, which we haven't done."

The confusion in Poland prompted a review of how procurement decisions aligned with brand messaging. Asahi developed a framework to assess which sustainability claims each brand could make.

"That's when we started this brand mapping journey. We're looking at every brand to say: 'Do you have something to say on sustainability? If yes, does your legacy allow you to speak about sustainability? If yes, then which markets do you operate in and do those markets care about what you can say?'" Preeti says. "And based on that flow, we've been able to do a lot of good work."

Internal carbon pricing mechanism

Asahi embedded sustainability criteria into procurement and investment processes. The finance team established an internal carbon price to evaluate environmental costs of every investment decision.

Senior leaders' bonuses were linked to meeting sustainability targets. This structure meant procurement choices that reduced carbon emissions could affect executive compensation.

The carbon pricing mechanism created new revenue opportunities. Asahi developed carbon-capturing vending machines in Japan and Australia that collect carbonate waste for resale to construction and coral reef restoration sectors.

"Completely different ball game, new revenue stream for us," Preeti says. She was speaking with Helen Clarkson, CEO of The Climate Group, at the Opportunity Summit during London Climate Action Week.

Asahi operates over 100 brands across different countries and product categories. This structure creates procurement challenges but also allows the organisation to test supplier relationships in one market before expanding.

"There is beauty in that complexity," Preeti says. "There is so much joy to be able to do something well and fast in one market and learn from it and then do it even better in the next month. So I think it's a gift to be able to operate in so many geographies."

Procurement teams can evaluate suppliers and contracts for beer production and apply those findings to soft drinks operations. Packaging contracts suitable for food products may not meet requirements for alcoholic or non-alcoholic beverages.

"It's a gift to be able to do something in the beer industry and then try to do it in the soft drinks industry. It's really interesting to look at packaging we can use in food, but maybe not in alcoholic or non-alcoholic beverages," Preeti says. "I think the complexity actually gives us enough room to manoeuvre to be able to try and experiment more than if we were just in one area or one geography."