Sustainable development, as defined by the World Commission on Environment & Development in 1987, is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. This challenge has become increasingly complex in recent years as the food supply chain has become more global, and the world’s population and economies have outpaced all expectations.
“The world’s population is forecast to grow by 2.5 billion between now and 2050,” said Sir Terry Leahy, Tesco chief executive, at the City Food Lecture. “To put that in context: in 1950, 2.5 billion was the size of the entire world population, so we’ll need to double the world food supply to meet that demand for meat, protein, water etc.”
By 2030, the World Bank estimates that cereal production must increase by 30%, and meat production by 80%, to meet the demands of a global population exceeding eight billion – up by more than a billion on current numbers. Sir Terry pointed out that boosting the food supply needed to be done, not in isolation, but hand in hand with cutting carbon emissions and thinking more broadly about the effects of global warming.
According to a new report from the Institution of Chemical Engineers in the UK – ‘The Vital Ingredient: Chemical Science & Engineering for Sustainable Food’ – the strain on the world food supply comes from climate change and the resultant competition for land for food, biomass/energy, industrial and domestic use. In addition, according to research by the United Nations, agriculture consumes almost three quarters of the world’s water resource, and by 2050 as many as 60 countries will experience water scarcity.
“In 2008, these concerns really came home to us, as riots took place over basic commodities and wheat doubled in price,” said Hilary Benn, UK secretary of state for Environment, Food & Rural Affairs, at the launch of the report. “As the World Food Programme points out: this is a ‘silent tsunami’. This has given us a glimpse of what’s to come if we do not act now.”
To this end, in July 2008, the European Commission published an ‘Action Plan on Sustainable Consumption and Production and Sustainable Industrial Policy’, accompanied by a set of legal proposals and a ‘Communication on Green Public Procurement’.
Throughout the industry, the reality that to achieve sustainability involves a shared responsibility throughout the supply chain has been echoed at conferences and events throughout the year. “There’s no sustainable development if there’s no sustainable profitability,” said Jean Martin, president of the Confederation of the Food & Drink Industries of the EU, which supports the objective of the EC Action Plan to set up a framework to foster resource-efficient production patterns and help consumers make informed choices.
The CIAA’s priorities in relation to the EC’s Action Plan include the integration of three pillars: environmental, social and economic – in a holistic manner. It’s establishing a Food Chain SCP Roundtable to gather EU farmers, manufacturers, retailers, consumers, policy makers (national and EU), scientists and NGOs, and is actively encouraging the Czech presidency of the EU to play an active and facilitating role in the successful launch of this platform.
With this backdrop, it’s likely that the industry and consumers will see more abundant, valuable, effective and far-reaching sustainability initiatives come to the fore. However, in many cases, sustainability in its traditional form has always been standard practice for the industry’s big players.
“We have been supporting agricultural sustainability programmes for over 15 years,” said Richard Buino, corporate external communications, Kraft Foods, who pointed out that the company has been a partner of the Rainforest Alliance since 2003. “We have focused on particular commodities that are important to our business, and where we are important to them, such as coffee and cocoa. We’re the largest buyer of coffee beans from Rainforest Alliance-certified farms in the world, and we now have eight different coffee brands carrying the Rainforest Alliance seal in retailers around the world.”
According to the Rainforest Alliance, the connection of Kraft Foods to environmentally-friendly cocoa farms (in Ecuador, for example) is helping to reverse deforestation in the country’s Amazon and coastal forests. Kraft pays a premium price for the Rainforest Alliance-certified cocoa: “It’s business-driven sustainability,” said Elisabeth Wenner, Kraft Foods director of sustainability strategy. “We’re making money and the farmers are making money. We think it’s the only way forward.”
But Kraft points out that retailers and consumers are important if the industry is to achieve a sustainable food supply chain. “Retailers are increasingly sincere and dedicated to the cause,” said Richard Buino. “They’re realising that we can minimise our impact on the environment and help advance society, while increasing revenue and profit. We provide the strategic insight, but they have to go down the path and actually make things happen. Consumers also want to be sustainable, but for the most part they want their efforts to be compromise-free. They’re not necessarily willing to pay more for a sustainable product and they don’t want to sacrifice taste. However, if they’re choosing between two products that are the same in both cost and taste, more consumers will let sustainability be the tie-breaker.”
This experience is echoed by Unilever, which has pledged to source all of its tea globally from a sustainable and certified source – for its brands Lipton and PG Tips in Europe by 2010, and for Lipton globally by 2015. The economics of such sustainable sourcing are sound, as farming practices on plantations can degrade the land eventually through run-off and soil loss, or the use of fertilisers and pesticides can ultimately reduce long-term soil fertility, according to the World Wide Fund for Nature.
In order to take its activities further towards mainstream acceptance, Unilever also chose to work with the Rainforest Alliance to provide an independent endorsement (certification) of its activities in connection with its tea supply.
“The standards of the Rainforest Alliance for sustainability in tea are in line with our own good agricultural practice guidelines on sustainability,” said Lettemieke Mulder, director of global external affairs, corporate responsibility & NGO stakeholder management, Unilever. “Certification is a tool we use to roll out good practices in the tea supply chain. It’s important, however, that certification will lead to real impacts on the ground. The overall long-term goal is to buy all our ingredients from sustainable sources.”
Lettemieke Mulder pointed out that the challenge was how to roll out its sustainable agriculture programme throughout the supply chains of all these ingredients. As part of its programme, Unilever has established eleven indicators, including biodiversity, soil, energy, integrated pest management, people and the local economy. In order to track the impact of its activities and to be able to identify areas for improvement, Unilever has worked with Muddy Boots Software using its Quickfire application to collate data on the changes in agriculture.
“Beginning with fruit and vegetables, we’re starting to use the software with our suppliers and they are then working with their suppliers,” said Mulder. “This year, we’re starting to be able to see trends – for example, for one crop in one country, or for one indicator, say water, in all countries we’re sourcing from. We’ll then be able to see what the issues are and what can be done. Another question is whether we have to (or can) certify all ingredients we’re sourcing. The Sustainable Food Laboratory looks at these future issues and brings together different players. We can’t do it alone.”
The Sustainable Food Laboratory and its partners pledged US$5m last year to a four-year project to develop new business models that enable smallholders in Africa to participate in trading relationships with international businesses. These businesses support the long-term health and prosperity of their environments, farms and communities.
The New Business Models for Sustainable Trading Relationships in Africa is funded by the Rainforest Alliance and brings together the International Institute for Environment & Development, Counterpart International, the International Center for Tropical Agriculture, Catholic Relief Services and the Sustainable Food Laboratory.
“Recent market trends, including a proliferation of stringent standards, continued concentration in the retail sector, volatile prices and poor access to credit, have led to a decline in small farmer participation,” said Hall Hamilton, senior project director for the Sustainable Food Lab, who pointed out that the strengths of sub-Saharan Africa include suitable soils and climate, low labour costs and proximity to European markets.
This initiative dovetails with the work being carried out by the Sustainable Agriculture Initiative Platform, which joined forces with two other global sustainability organisations – the Sustainable Food Lab and The Keystone Center – to host the sustainability conference, ‘Growing a 21st Century Agricultural Revolution’, 18-20 March 2009 in Washington, US.
“We’ve been benchmarking the different sustainability certification schemes in order to provide a tool for managers making decisions with regard to selecting a scheme or planning their sustainability strategy,” said Peter Erik Ywema, general manager, SAI Platform, which is looking at the relative strengths and focuses of certification bodies such as the Rainforest Alliance, WWF, Iseal Alliance, Conservation International and others, to help companies match up with the best organisation for their products.
The second string to the SAI Platform’s current bow of activity is performance measurement, which will provide information on how companies can best measure their sustainable agriculture activities and assess their impact.
“How do you really measure sustainable agriculture and how do you measure the impact?” asked Peter Erik Ywema. “Such measures are crucial for companies to be able to monitor their activities and to give credibility to the wealth of projects already in place. We’re developing communication tools for sustainability specialists within food companies to support them in communicating the benefits of a sustainable sourcing strategy or initiative. This booklet will provide vocabulary, highlight the main issues, and help those responsible to get their message across to other departments.”
The informed and practical advice available from the SAI Platform includes strategic guidance for companies and information on how they can streamline their strategy on sustainability with internal procurement practices.
As Mr Buino of Kraft pointed out: “Although sustainability isn’t new to Kraft, we’ve had an increased sense of focus in the past year and a half. One of our key focus areas is agricultural commodities, because we’re especially reliant on the earth to produce the resources we use to make high-quality, finished products. In January 2007, we assembled a team that provides strategic direction to the business so that sustainability becomes a part of every decision. We’re incorporating aspects of sustainability into our business practices, as well as making a change in the corporate culture. And we’re succeeding in many ways.”
**Claire Rowan is managing editor of Food & Beverage International. Subscribe to the magazine here.**
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