Uncle Sam’s Apple juice

Business report 2001-2015

Page | 1
Executive summary
This report explores current environmental issues that affect the production of our
apple juice. The business implication concerning these issues between 2001 and 2015
will be discussed and analysed in detail. Environmental issues and social debates
surrounding the production and distribution of our Apple juice will be looked at and
the overall impact these may have on our industry will be discussed.

Uncle Sam’s Apple juice is about delivering to its customers top quality apple juice.
As one of the UK leading supplier of Apple juice it has come to our recognition that it
is our corporate responsibility to pursue more sustainable operations.

As a company, it has come to our awareness the direct and indirect affect that our
product may have on the environment. As a company we strive to continuously
improve our environmental performance through the means of investing in renewable
technology and improving efficiency within our supply chain. Through this, and the
implementation of an aggressive environmental management strategy all legal
requirements can be met and surpassed.

Through the life cycle assessment of our product, I was able to construct a list of the
key topics were explored.

• Use of fertilizers, herbicides and pesticides,

• general water consumption,
• Energy use
• waste management
• CO2 Emissions
• Transportation

Each of their environmental impact was assessed and evaluated. From this an
environmental improvement plan was formulated through Modification of different
life cycle stages, which outlines the cost reduction and benefits that can be achieved
from the changes.

Lastly an outlook is given to the future prospect of the company achieving its
environmental goals in the long term.

Pertinent environmental issues

Over the past couple of years there has been ever increasing pressure on our firms to
mitigate our environmental impact. This has come about due key conferences in
Kyoto and Copenhagen, which highlighted to the world the importance of dealing
with climate change. Due to this the government has past many regulations such the
climate change act1, producer responsibility obligations act2 and the waste
management act all which they believe will help achieve their environmental targets.
Through not complying with regulations, heavy fines and sanctions can be incurred.
This has lead to increase stakeholder concern in our industry, as our customers and
shareholders become aware of poor environmental performance our brand, reputation
and financial future are at stake.

Page | 2
Life cycle assessment
This is a systematic method employed by companies to identify, evaluate and improve
the environmental effect of a product in accordance to what part of the supply chain
that the company is involved in.
3

Figure1: Phases of life cycle assessment according to ISO 14040

Uncle Sam’s Apple juice main goal

This is to produce the most environmentally friendly and socially acceptable juice,
whilst at the same time maximising profitability and out performing our competitors
by the successful cohesion of a product base environmental management system and a
business strategy.

System boundaries and Scope

A system boundary separates the internal components of company from the external
operations. As a company the main function that we are involved in is the
manufacture, production and the delivery of our apple juice.
Suppliers of our apples supermarkets and customers can be classified as external
entities.
Subsystems Process
Apple Farming, and purchase Growing of the apples used in juice, and harvesting
them
Sugar and additives
Apple juice production Cleaning of apples and the formulation of the apple
juice
Packaging apple juice Filling juice bottles with apple juice.
Transportation and distribution Transportation of finished product to retail
distribution outlets.

Page | 3
 Apple Apples Apples
Retail
Orchard Maceratio Pressing
Store
Farms n process Process

Aseptic Retail
Bottling Distributi
Process on
Centre

It was evaluated that the main parts of the supply chain that the company is involved
in is the manufacture, production and distribution of the apple juice to retail
distribution centres. As the producers of the apple juice it is our corporate social
responsibility to regulate our supplier activities and continuously asses their
environmental performance. In doing so we uphold our public image and take full
producer responsibility for our product.

The scope of this business report is to find ways of delivering the functional unit of 1
litre of apple juice to our customers that,

• Uses a greener source of energy in its manufacture stage,

• That produced less CO2 throughout its product life cycle.

• That is provided with less packaging, that is 100% recyclable,

• Apple that come from a more sustainable ways of farming.

Page | 4
Impact analysis

Farming

The overuse of inorganic fertiliser in our suppliers apple farms, have had a severe
environmental impact on the ecosystem. During periods of severe rain fall large
amount of surface run off occurs, meaning vast quantities of unabsorbed nitrates enter
aquatic ecosystems causing eutrophication to occur. This results in an algal bloom,
which them results in an increase in bacterial organism that consume the oxygen in
the lakes or rivers. Low oxygen levels leads to vast amounts of dead fish. Fertilisers
that contain nitrous oxide have a global warming effect that is 300 times more potent
that CO2.The use of inorganic fertilisers can contribute up to 20% of the apple juice
life cycle CO2 emissions.

Inorganic pesticides have a direct impact on the surrounding ecosystems wildlife, as

toxic chemical found in the prey that birds hunt are preventing them from
reproducing.
Herbicides consist of highly toxic chemicals; although they don’t have a direct effect
on our farm stock, soil degradation can occur due to natural humus not holding the
soil in place.

Water is a precious commodity around the world; its mismanagement in the growing
of our apples through inefficient irrigation is very expensive which can also lead to
surface runoff of fertiliser used. It was calculated to produce a single apple it require
70 litres of water4; this is a total of 19 billion litres of water used annually in growing.
Once at the manufacturing sites an addition 150 million litres of water is used to clean
the apples.

Manufacturing

Our factories consume a vast amount of energy when manufacturing apple juice. This
is very expensive as our main source of energy comes from fossil fuels, which is non
renewable therefore an unsustainable option. Large amounts of toxic gases such as
nitrous dioxide, sulphur dioxide and CO2 are emitted by our factories, these get into
the atmosphere and form acid rain.

Bi products from manufacturing are simply taken to landfill sites. This very expensive
as the amount of land fill tax has exponential increased in the last 10 years.

Page | 5
Electricity consumption

In 2001 we used 25348 Mw h of electricity. As most of this came from natural gas we
were able to calculate the total carbon footprint from electricity.

Energy in natural gas (MJ/Kg) 465

Power plant efficiency (%) 40
Mass of natural gas used annually (tonnes) to 23,026
produce 25348 Mw h of electricity
Density of natural gas (Kg/ m3) 0.86
CO2 in flue gas (%) 117
Volume of CO2 (m3) 3166114
Density of CO2 (Kg/ m3) 1.988
Mass of CO2 emitted (tonnes) 6268

Transportation

Large amount of “food miles” need to be covered to reach our consumers. The
implication of this is the heavy use of trucks, leading to vast amount of fuel being
consumed. This is not only expensive it is environmentally unfriendly as road
transportation accounts for 20% of total greenhouse gas emissions across the EU-15
in 20049. In 2003 we had a fleet of 45 trucks. In total they clocked up 10 million food
miles this equated to the consumption 2,000,000 liters of diesel at 20 liters for 100
miles. It was calculated that for every liter of diesel used a fully loaded truck,
produced 2.63kg10 of CO2. Therefore 5260 tonnes of CO2 was released into the
atmosphere in the 2003.

What our stake holders think of use is very important. It has been brought to our
attention that our apple juice has high sugar content. As the main consumers are
children, parents are concerned about their dental health, hyper activity given by the
juice. Sugar has a direct link with obesity; this can lead to further health problems
such as heart disease, type 2 diabetes, liver disease and so on.

Recycling
Currently we used PET bottles and Tetra Pak cartons. The problem with PET bottle is
they are derived from crude oil which is a non renewable source of energy. Pet bottle
can be recycled however, if thrown away they take hundreds of years to decompose.
Tetra Pak cartons are made out of polyethylene-coated paperboard. These are very
expensive to recycle because they have a thin layers on foil and wax in there design
structure.

Page | 6
Strategy, Responsibility, Control & Engagement
One of the main challenges for us was to make improvements in the use of raw
materials whilst overseeing the economic impact on our business ensuring that our
apple juice is still a top quality product.

Raw material
In 2002 our suppliers introduced ground breaking methods of sustainable farming.
This included the use of organic fertilisers which were developed by the
decomposition of organic farm waste to form compost. This is more sustainable
because our dependency of inorganic fertilizers has dropped, which are mainly
synthesized from non renewable fossil fuels. These advancements did not
compromise our product yield. Now in 2010 within the production life cycle farming
now only contributes to 15% of total emissions.

To eliminate the use of pesticides, natural predators were introduced to our supplier’s
farms. This resulted in the reduction of pests in our supplier orchards without the use
of toxic chemicals.

Due to the vast amount of pesticides and inorganic fertilisers used for our apple in the
past, large volumes of water were used to clean the apples. Now due to improvements
that were made in other parts of the product life cycle water efficiency has now
improved by 40%.

As farming waste is now being used to produce fertiliser, this has substantially
contributed in the reduction of the supplier’s eternal waste. It was calculated that the

Page | 7
total mass of an average apple is 136g11 85% is juice, the rest is waste. To produce 1
litre of apple juice it takes approximately 8 apples, therefore for every litre of apple
juice we use, we produce 164g of organic waste. In 2006 the United Kingdom
consumed 136 million litres of apple juice12; as we have a market share of 25%, this
equates to producing 5576 tons of organic waste through manufacturing.

Business
Energy saving also been made in Human resources department; compact florescent
bulbs which use 80% less electricity have replaced the old style tungsten bulb. All
new office PCs now have efficiency software so they turn off automatically when not
in use. A scheme to install sensors taps within all our building is also currently on the
way. Furthermore to these developments water collection systems have been installed
in head office and production sites. This will be used to refill the toilets that use 8
litres per flush. All this has been estimated to save 15% in resources and cost.

In 2009 all our manufacturing sites installed an environmental management system

according to the ISO14001 standard. What this means is that it is our obligation to
comply with all environmental laws and be committed to perusing all of our
environmental policies. To help implement this management Staff is now receiving
training in six sigma management strategies, which will allow us to exceed
customer’s expectation of our product, by optimising our manufacturing process and
exploring product redesign.

Technology
In the manufacture of our apple juice substantially large amounts of energy is
required. The source of this energy comes from non renewable fossil fuels. Uncle
Sam’s apple juice has the potential to produce some of its manufacturing energy
needs on site. Currently we produce on average 5576 tons of organic waste. Through
the initialisation of a combined heat and power generator which have an efficiency of
70%, we could produce approximately 4546 MWh of heat and electricity per year.
This also diverts 80% of our waste from landfills, saving £178,432 annually. This
project cost 2 million to install.

8 apples waste energy in kcal 400

Multiply factor kcal to KJ 4.184
8 apple energy KJ 1673.6
Apple juice produced annually (litres) 34,000,000
Total apple waste energy MJ 56902400
Cogeneration efficiency % 70
Hours in a year 8760
Estimated electricity output annually (MWh) 4546
CO2 produced per Kcal of an apple 0.25g13
CO2 emitted from 1 litre of apple juice waste 100g
Total CO2 emitted through Cogeneration 3400

Page | 8
This year we received a renewable obligations certificate from Ofgem for the
installation of 30 Vesta V39 wind turbines in are largest Apple farm were we have
shareholder majority. They provide on average 750MWh14 annually each. Although
this investment cost £16.5 million (£550,000 each)14 our suppliers provide us a 10
year maintenance warranty. It was calculated that is will take 10 month to offset the
carbon footprint of each turbines manufacture.

Parallel to this investment, we now have a new energy supplier “good energy”. This
company has the best record in the UK for supplying its customer’s electricity that
comes from 100% renewable sources. Through their export tariff of 6p per 1 KWh it
was calculated that it will take only 12 years to recuperate the costs of the Turbines.

Vesta average power output 750MWh

Total power output 22,500MWh
Revenue generated annually £1,350,000
Breakeven year 12

Recycling
Through market research and investment development have been made in the
packaging stage of the supply chain. Tetra Pak cartons are no longer used expensive
to recycle. Uncle Sam’s apple juice is on verge of signing a new supplier packaging
contract with “Siedel”. This company makes 1 litre plastic bottle that weight only
25g, compared to 35g in other conventional bottle manufacturers. These bottles are
environmentally friendlier.

But do we need packaging? A method of installing “apple fountains” within retail

outlets is being looked at. This idea means people bring their own reusable containers
and refill them at one of these points therefore eliminating the use of packaging. 200
litre tanks will store the juice. When empty they are taken back to the factory and
refilled. A trial run will take place at the beginning of 2015.

CO2 emitted for every 1 kg of PET produced 6kg

Weight of old PET bottle 35g
Weight of new PET bottle 25g
Litres sold per year 34000000
Total weight of old bottles used 1190 tonnes
Total weight of new bottles used 850 tonnes
Old packaging CO2 emissions 7140 tonnes
New packaging CO2 emissions 5100 tonnes
CO2 reductions 29%

Page | 9
 In 2012 a pilot scheme will take place in a supermarket retail outlets assessing the
prospects of the reverse vending machine. This works by collecting old and bottles,
and giving customers financial incentives to recycle. This already successfully take
places in countries like Norway as recycling is made more enticing. As one on the
main sponsors for this project it will be of benefit to review the results when they are
available.

Improved irrigation techniques were also introduced. Our research and development
sector has developed a machine that measures moisture content within the soil, then
decides when to turn on the irrigation system. In doing so we have cut water usage in
farm by 20% by 2007.Due to organic fertilisers being used and a modified irrigation
system, near by water systems such as lakes are returning back to normal as less
nutrient runoff is occurring.

Transport
In 2006 we opened our newest Distribution and manufacture centre. This is
logistically located 400m away from a freight train depot. Using rail to take lorry
loads of freight off the motorways, a move that could initially save more than a 3
million road miles a year. Through reallocation of the supply chain and adapting the
proximity principle methodology, saving have been made on fuel cost and energy.

When truck have to be used to deliver our goods to the supermarket we make sure we
have the maximum payload possible, in doing so we reduce the amount of trucks on
the road needed to carry our juice. In 2012 we hope to introduce as new trucking
contractor that has double Decker trucks. These trucks use B100 biodiesel a
renewable fuel made from agricultural crops, and can hold 60% more juice.

Ethical and social issues.

As of 2008 our apple juice has no added sugar, instead artificial sweeteners are used,
which have a substantially lower calorific value. In 2008 the slogan “a apple a day
keeps the doctor away”. This was adapted due to management decision to be the
permanent sponsors of Kids in sports UK. In doing so a website was set up
highlighting the health benefits in drinking apple juice, accompanied with information
about in getting kids involved in sports.

In 2004 it can to our attention that one of our apple suppliers were, not meeting the
UK regulation on minimum wage, due to a whistle blower system set up the previous
year. Due to this their contract was terminated. As of that year all our worker received
minimum pay with a maximum of 48 hours work weekly. In 2009 our rating surged
in the ethical index indicators; FTSE4Good index series ranked us in the upper
quartile for 2009.

Page | 10
Looking to the future

Through many years of economic analysis it was discovered that it was more
financially beneficial to go green. Savings are being made in all areas of our product
life cycle and improvements are taking place continuously.

Furthermore, our short term goal is to improve operational efficiency and to invest in
renewable technology; however our long term goal is to 100% carbon neutral, and
limit the amount of raw materials we use. In this report we have identified key areas
of our apple juice lifecycle that had a high carbon and water foot print. In tackling
these problems we have gained accreditation from many organisations, this has helped
us establish our name as one of the UK’s leading environmentally friendly companies.

Due to the developments of making subsystem within or life cycle more efficient,
through the implementation on renewable technology and efficient resource usage,
over time our product has gained a sufficient amount of added value. Many cost
savings have been made in all areas of our supply chain which in the long term can be
passed on to our customers. From this i hope the stigma of going green has been has
been readdressed, when you spend a little money now you can reap the vast benefits
and improvements in the future; economically financially and socially.

The truth

As we know it takes 560 litres of water to make a litre of apple juice. This is not
sustainable; to the point where we ask ourselves is our product a need or a want. The
primary function of apple juice it to quench a person thirst. From the amount of water
used in its production many ethical issues arise, as there are 1 billion people on this
planet who struggle to find water. Should we continue our operations?

Page | 11
One litre of
apple juice
0.77 KG of
produced in CO 2

2002

One litre of
apple juice
0.50 KG of
produced in CO 2

2015

Page | 12
1
http://www.opsi.gov.uk/acts/acts2008/ukpga_20080027_en_1
2
http://www.opsi.gov.uk/si/si2007/uksi_20070871_en_3#pt2-l1g4
3

4
http://news.bbc.co.uk/1/hi/sci/tech/8628832.stm
5
http://hypertextbook.com/facts/2002/JanyTran.shtml
6
http://www.engineeringtoolbox.com/gas-density-d_158.html
7
http://en.wikipedia.org/wiki/Flue_gas_emissions_from_fossil_fuel_combustion
8
http://www.engineeringtoolbox.com/gas-density-d_158.html
9
http://www.dft.gov.uk/pgr/sustainable/climatechange/euemistrascheme?page=1

10
http://www.mrc-centre.cam.ac.uk/Calcuating_a_carbon_footprint-guidance_from_Defra_(2).doc
11
http://www.urbanext.uiuc.edu/apples/facts.html
12
http://www.nutraingredients.com/Research/Cloudy-apple-juice-four-times-healthier-than-clear
13
http://www.scribd.com/doc/24163/CO2-Emissions-of-Foods-and-Diets
14
http://www.segen.co.uk/eng/wind/vestas.htm