Bourbon Industry By-Product: A Sustainable Solution

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2015-04-24

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Abstract

Bourbon production is an American tradition that has spanned generations; providing substantial opportunities for economic growth. The production of whiskey has survived economic depression, government regulations and decades of technological advancement. As the bourbon industry continues to flourish, the large volume of by-product has become a source of frustration.

The primary research question I address in my project is: What is the most sustainable solution to bourbon industry by-product? The bourbon industry’s high volume of by-product can be converted into a resource to reduce its negative environmental footprint. However, finding the most environmentally and economically efficient process, while maintaining a positive relationship with the surrounding community is a challenge. To recommend a best practice for by-product, I determine the sustainability of different alternatives. Specifically, this project focuses on the following objectives:

· Identify existing and possible alternatives for bourbon industry by-product.

· Compare the environmental impact of each alternative using a life cycle assessment.

· Compare the net present value (NPV), internal rate of return (IRR), and payback for each alternative.

· Compare the relative environmental, economic, and community impact of each alternative via a quantitative analysis.

Currently, many distilleries either discharge their by-product to the local sewer system or convert the spent grains into a cattle feed source. Simply reducing the moisture content of the by-product with a centrifuge or screw press creates a product known as wet distiller’s grain (WDG). A more energy intensive alternative involves centrifuging the by-product, condensing the liquid to a concentrated syrup, and drying the solids. This product is known as dried distiller’s grain with solubles (DDGS). The third alternative in this study involves the use of anaerobic digestion to convert the by-product into renewable energy, while using the biosolids as fertilizer.

An environmental life cycle assessment, financial analysis, and quantitative analysis were performed on WDG, DDGS and anaerobic digestion processes. Heaven Hill Brands was used as a case study for life cycle modeling, cost and community impact analysis. Heaven Hill Brands is a producer and distributer of distilled spirits.

The life cycle assessments performed showed significant impacts. The anaerobic digestion process’s impact to global warming is greater than the WDG process; however, the impact is mitigated by the generation of renewable energy. The credit applied for the production of biogas and the use of the biosolids as fertilizer significantly reduced its impact on greenhouse gas emissions. In the case of WDG and DDGS, a grain credit is applied based on the production of a resource from the spent grains that reduced direct grain demand for animal feed. The environmental impact of the WDG process is insignificant; however, the DDGS operation produces a sizeable impact due to the high energy demand of the process.

The financial analyses determine that wet distiller’s grain produces the highest net present value, internal rate of return, and the quickest payback. The savings for all three alternatives is significant; however, the large capital costs for DDGS and anaerobic digestion affect the financial return. Anaerobic digestion has the lowest net present value. Both DDGS and anaerobic digestion have similar internal rates of return and paybacks.

The quantitative analysis determines that WDG and anaerobic digestion alternatives have near equal overall value. The sensitivity to performance analysis reveals that none of the alternatives are significantly sensitive to GWP or NPV. However, the DDGS operation is sensitive to community impact. The DDGS operation’s sensitivity to community impact is expected based on the operation’s potential odor, visible emissions, noise, the increase in traffic, and the weighting of this particular attribute.

Heaven Hill weighted the community impact as the most influential attribute for the comparison of the three alternative uses of by-product. The organization has found that forming a positive relationship within the community is a priority. Integrity is a core value of Heaven Hill Brands. This integrity is compromised if the concerns of the community are not considered as the company analyzes prospective developments.

This in-depth analysis was used to develop a concrete recommendation for Heaven Hill Brands. The implementation of an anaerobic digestion operation is the most sustainable solution. This alternative is the most environmentally efficient, promotes community well-being with a minimal negative impact and is economically beneficial for the organization. The anaerobic digestion process allows Heaven Hill Brands to create a resource from an existing waste stream; promoting the organization’s commitment to environmental stewardship.

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Harmon, Kimberly (2015). Bourbon Industry By-Product: A Sustainable Solution. Master's project, Duke University. Retrieved from https://hdl.handle.net/10161/9681.


Dukes student scholarship is made available to the public using a Creative Commons Attribution / Non-commercial / No derivative (CC-BY-NC-ND) license.