Carlos Brito, the CEO of Anheuser-Busch InBev has been thinking for a long time about how the beer business can conserve energy. He recalls how back in 2001 he was a regional manager in Rio de Janeiro during a drought that had reduced the hydropower from Brazil’s dams. Brito’s customers, the owners of cafes and grocery stores, were ordered to cut power consumption by a third. They had to make tough choices about what to unplug. He made the case that coffee makers and sandwich machines were bigger energy hogs than the coolers where they kept the Bohemia. “Beer is higher margin, so they unplugged the ice cream freezers,” laughs Brito, 57, according to Forbes.
Throughout a decade building the world’s beer goliath Brito has kept up the focus on cutting costs, especially energy. “Everything boils down to energy. It ties into everything,” he says. The maker of Budweiser, Stella Artois and Corona (NYSE:BUD) buys thousands of beer coolers a year, always seeking those with more efficient compressors and eco-friendly coolants. Its truck fleet features hundreds of big rigs powered by clean compressed natural gas instead of diesel. At the giant Bud brewery outside of Houston they heat their boilers by burning methane captured from landfills. A brewery in upstate New York runs on solar.
Brito’s big new kick: green electricity. He announced last week a commitment to make the company’s roughly $400 million a year worth of purchased electricity 100% green by 2025.
This is a pretty big deal. The company says its purchased electricity amounts to about 6,000 gigawatt hours per year. That’s akin to operating a 700 megawatt baseload power plant, or flying 5 jumbo jets around the clock. It’s enough to power about 500,000 American homes. At the U.S. industrial average power price of 7 cents per kwh, that electric bill would come to $400 million a year. (Company net income last year was $2.8 billion on $45.5 billion in revenues.)
To meet Brito’s goal, AB InBev will need the renewable energy equivalent of the world’s four biggest solar farms.
Brito has no doubt this can be done. And for a lower cost than they pay now. “It’s like anything in tech, it’s only getting better and cheaper with time. Look 20 years back and wind and solar were not competitive. Now in Mexico it is 20% cheaper to buy 100% wind.”
In the past 5 years the cost of building utility-scale solar PV in the U.S. has dropped from about $2.60 per KW to $1.10. Last month Brito inked a deal with Spanish utility giant Iberdrola to buy 490,000 megawatt hours per year from a 220 mw windfarm to be built in the Mexican state of Puebla. This will meet all of AB InBev’s purchased power needs in Mexico. But further investments will follow.