Market Incentives and Great Lakes Brewing Co.

Market governance is intriguing because it uses capitalist principles to incite social improvement. As environmental conservation grows into a more popular idea with consumers, many businesses want to take advantage of the benefits they can reap from advertising their environmental responsibility.  This is not to say that businesses do not care at all about the status of the environment without economic incentives, but the patronage of consumers certainly provides an additional reason for companies’ environmental interest.  I became really interested in this concept after learning about market-based initiatives in our class, and also studying similar concepts in another of my courses. Recently I read an article about a similar type of reaction in a different sector.  All sorts of companies in the food world make more environmentally friendly, “natural,” organic, or healthier decisions in manufacturing, based on the concerns and ideals of their consumers.  It turns out that recently certain candy manufacturers have decided to begin a more natural process of coloring some of their candies, specifically ones like gummy worms or bears.  Based upon a recent trend in consumers becoming more concerned with artificial ingredients, the company decided to switch the way they were doing things to a more transparent, healthy avenue in order to gain profit from that switch.

Now, whether or not these sorts of alterations are actually healthy, environmentally responsible, or truthful can be up for debate.  But there is no doubt that companies are listening to the wills of their consumers and making an attempt to be cleaner and more straightforward based upon these ideals.  When it comes to environmental conservation in particular, I became interested in what kinds of companies are making an effort to appear superior to their competitive counterparts, and actually be more environmentally responsible.  Although in a capitalist society we sometimes tend to equate markets forces with greed, it is possible in many situations that market incentives can increase responsibility of a business in a meaningful way.  The example I will focus on in the remainder of this post is the Great Lakes Brewing Company.

Great Lakes Brewing Co. is a business that, in recent years, has put a great deal of effort into the transparency of its environmental initiatives. Each year, the company publishes what they deem a “Sustainability Report.”  It starts with a conversational letter, and the rest of the report focuses on the efforts they’ve made that year to obtain their resources responsibly and conserve the environment in meaningful ways.  The report is divided into several sections such as energy management, waste management, food and farming, etc.  Because the Great Lakes Brewing Company (not surprisingly) is located on Lake Erie, they have a specific focus toward “water stewardship,” including this passage:  

“Because we’re located two miles from the shores of Lake Erie and we produce a product that is over 90% water, we’re committed to protecting this valuable resource in brewery operations. While brewing and bottling utilizes a large amount of water, we do our best to reduce and reuse within our bottling and cleaning processes. Since 2001, we’ve hosted the Great Lakes Burning River Fest, a beer and music festival with an environmental focus. The Fest takes place at the historic Coast Guard Station at the mouth of the Cuyahoga River, which leads into Lake Erie--the source of the same water we use to craft our beers. In 2007 the non-profit Burning River Foundation formed as an outgrowth of the fest, and has awarded over $320,000 to local non-profit organizations invested in protecting our freshwater resources.” 

Market influences can indeed incite greed, but they also can produce incentives for companies to be accountable and responsible. Whether or not you believe the efforts of companies such as this one are genuine or just financially based, there’s no denying the fact that market incentives can sometimes cause environmental change for the better- or at least a change in the way businesses discuss it. 

Sources:

http://new.greatlakesbrewing.com/downloads/Sustainability_Report_2014.pdf