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November 2014
WELCOME TO THE NOVEMBER 2014
EDITION OF THE SUSTAINABLE SOURCE
My name is Leslie Leinders, I was born and raised in the Netherlands. After my studies I
started my career with Unilever in the local supply chain with our Frozen Foods business
in the Netherlands. In 2004 I joined our European Procurement organisation and within
10 years I was responsible for several categories, varying from dairy & egg products,
sugar & cocoa, and ultimately taking global responsibility for cocoa & chocolate. In these
roles I developed a great interest and passion for sustainability, for example I am proud of
initiating the transition of our Hellmann’s mayonnaise to cage free eggs or transforming
our cocoa for Magnum towards it Rainforest Alliance certification.
Dear readers,
Last summer I moved to the global Sustainable
Sourcing team, where together with a great team of
enthusiastic professionals we drive Unilever’s agenda
to source all of our agricultural materials sustainably by
2020.
Within my portfolios I am focussing on the two
routes to achieve sustainable ingredients: self verification through SAC (e.g. sugar beet, sunflower and
­rapeseed oil) as well as certification through third
party ­standards, particularly for cane sugar. With the
­support of you as our partners, we have made incredible progress so far, but I am sure we can do even better
through co-petition.
By cooperating with our competitors we are convinced
we can make even bigger steps and make a real
difference, whilst avoiding duplication of efforts. Focus
on the Sustainable Agricultural Initiative, leveraging
scale through landscape approaches and any other
potential forms of collaboration will be the key success
factors for 2015 and beyond.
In this edition you will find some fantastic news about
the Dow Jones Sustainability Index, an exciting update
on soy, a few new partnerships we have signed as well
as a spotlight on some of our fantastic supplier
initiatives.
Happy reading and if you have any thoughts or
comments, please send them to
unilever@muddyboots.com.
Leslie Leinders
CONTENTS
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KEY FACTS UPDATE
DOW JONES SUSTAINABILITY INDICES - UNILEVER NAMED LEADER
MUDDY BOOTS UPDATE
YOUR AUDITS AND ASSESSMENTS
SOY PLEDGE
YOUR CONTROL UNION
NEW PARTNERSHIPS ANNOUNCED AT SUPPLIER SUMMIT
UNILEVER’S JOURNEY TO 100% SUSTAINABLE PALM OIL
MEET A SUPPLIER - SUNRICH
MEET A SUPPLIER - LEMON KING
MEET A SUPPLIER - FRUCO
BRAND SPOTLIGHT - RAMA
SUSTAINABLE SOURCING
KEY FACTS UPDATE
1 year ago we introduced the requirement to attach your Cool Farm Tool input spreadsheet
and Biodiversity Action Plan when submitting your farmer assessments.
5,863 DOCUMENTS HAVE BEEN SUBMITTED SO FAR:
3,077 – Cool Farm Tool input spreadsheets
1,891 – Biodiversity Action Plans
1,330 – Other documents
IN THE MUDDY BOOTS ASSESSMENTS PLATFORM THERE ARE:
60,322 active farm sites
486 active processor sites
Total assessments submitted in 2014 are 18% higher than they were at the same time in
2013.
KEEP UP THE GOOD WORK!
ENHANCING LIVELIHOODS
Since our last newsletter, Unilever has expanded its Sustainable Living Plan targets to include a more specific focus
on Enhancing Livelihoods. You can read more about this here:
http://www.unilever.com/sustainable-living-2014/enhancing-livelihoods/
One element of this is Unilever’s Responsible Sourcing Policy. Enhancing livelihoods is about the impact that
Unilever as a business has on people’s lives. The Responsible Sourcing Policy has recently been launched to replace
the supplier code and to drive the Enhancing Livelihoods pillars of the USLP. This incorporates the UN Guiding
Principles on business and human rights and the roll out is going well.
THE FUNDAMENTAL PRINCIPLES OF THE RESPONSIBLE SOURCING POLICY ARE:
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Business is conducted lawfully and with integrity
Work is conducted on the basis of freely agreed and documented terms of employment
All workers are treated equally and with respect and dignity
Work is conducted on a voluntary basis
All workers are of an appropriate age
All workers are paid fair wages
Working hours for all workers are reasonable
All workers are free to exercise their right to form and / or join trade unions or to refrain from doing so and to bargain collectively
Workers’ health and safety are protected at work
Workers have access to fair procedures and remedies
Land rights of communities, including indigenous peoples, will be protected and promoted
Business is conducted in a manner which embraces sustainability and reduces environmental impact
UNILEVER TOPS INDUSTRY GROUP IN
DOW JONES SUSTAINABILITY INDICES
Unilever has been named leader of the Food, Beverage and Tobacco
industry group in the 2014 Dow Jones Sustainability Indices (DJSI) review one of only 24 companies to be named as industry group leaders.
BEST-IN-CLASS APPROACH
DEMONSTRATING A LEADING POSITION
The DJSI is a globally recognised independent benchmark that measures proven company performance
across material economic, environmental and social
criteria. This year is the 15th anniversary of the DJSI,
with Unilever being one of just 15 companies to have
been a member of the DJSI World Index since it began
in 1999.
The DJSI Industry Group Leader Report, compiled by
RobecoSAM, states: “Unilever continues to demonstrate
a leading position in the global food and personal care
space. Strong innovation and a focus on product stewardship elements such as packaging and raw material
sourcing are embedded in the company’s strategy.
Jeff Seabright, Chief Sustainability Officer at Unilever,
says: “This is a proud moment for Unilever. Our thanks
go to everyone who contributed to this annual submission and the results reflect the progress we are making
in delivering the Unilever Sustainable Living Plan.”
INDUSTRY-LEADING SCORES
Unilever achieved an overall score of 90 out of a
possible 100, with maximum points being awarded in
five criteria including Health & Nutrition and Packaging.
High scores were achieved for Innovation Management,
Supply Chain Management, Operational Eco-efficiency,
Human Capital Development and Labour Practice
Indicators and Human Rights.
“Sustainable sourcing remains a key focus area, and
Unilever supports local sourcing, development and
human rights. Transparent communication on supply
chain issues and indicators ensures awareness among
customers and other stakeholders,” it adds.
The Report also highlights Unilever’s achievements in
nutrition with 31% of the company’s food and refreshments products meeting the highest nutritional
standards for their respective product categories, based
on globally recognised dietary guidelines.
DOW JONES SUSTAINABILITY INDICES REVIEW
The DJSI annual review 2014 results including the S&P
Dow Jones Indices/RobecoSAM Press Release and the
Industry Group Leader Report are available at
www.sustainability-indices.com.
Elsewhere, Unilever was the best company within the
Food Products industry for both the Economic and
Social dimensions of sustainability.
0
MUDDY BOOTS SOFTWARE
LATEST UPDATES
The number of sites loaded on the Muddy Boots Assessments platform on page
three is testimony to your commitment to the Unilever sustainability program
and a high level of software adoption in the last year. Many suppliers are
working on their SAC Assessments for the fourth time - look out for our section
on Continuous Improvement and details of how to continue to be counted as
‘Sustainably Sourced’ in your fourth assessment set.
In this section we also introduce you to the rebranding of the Office and
Anna Powell, your Muddy Boots
Account Manager.
Reporting websites and recent changes to some of your reports. Our current
focus is on updating your reports to make your data really simple to access and
there are some exciting new developments coming soon, read on to find out
more.
CONTINUOUS IMPROVEMENT
If you are completing SAC Assessments for the fourth
time this year please be aware that in order to continue
to be counted as ‘Sustainably Sourced’, 80% of
applicable ‘Must’ category questions per SAC chapter
must be achieved, it was 50% for assessment sets 1-3. If
you fall below 80% your assessment set will be counted
as non-compliant.
This continuous improvement functionality was
launched in the Muddy Boots Assessments platform at
the beginning of September. The first supplier to be
counted as ‘Sustainably Sourced’ for their fourth
assessment set is Cedenco Foods New Zealand Ltd for
sweetcorn - well done to the team at Cedenco Foods!
If you are working on assessment set 4 remember to
check your scores in the Sustainably Sourced Report
before you close your assessment set. For help with this
please view the Unilever SAC Reports webinar http://
en.muddyboots.com/unilever-quickfire-webinars or
contact support@muddyboots.com.
QUICKFIRE TO GREENLIGHT ASSESSMENTS
Our name has changed! Quickfire is now called
‘Greenlight Assessments’. Quickfire’s sole purpose is to
underpin safety and integrity in the supply chain, it
therefore seemed a natural progression for Quickfire to
join the Muddy Boots Greenlight family of solutions; a
well-known brand that resonates quality from field to
fork.
And, if nothing else, at least the name means
something now! The industry and our customers are no
longer focussing on third party audits, but instead they
are empowering their suppliers with self-assessments.
This is just one step in our recent work to improve the
overall appearance and usability of the whole
Assessments platform.
It means that our customers of multiple products will
no longer need to get to grips with very different
platforms. We’ll be using the same colour scheme, the
same simplistic layout, the same icons, menus, and
more.
EVEN BETTER REPORTING
We’re also updating your reports to make your data really simple to access. So far the Sustainably Sourced,
Individual Non Conformance and the Combined Non Conformance reports have been updated, here are a few of
the changes:
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Simplified, smart report filters
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Assessment sets no longer split into assessment years. All sets displayed on the same report with a new ‘Assessment Number’ column
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Improved Excel export format
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New reports will exist alongside old reports during the adoption period
FURTHER REPORT UPDATES COMING SOON
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Performance analysis dashboard
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Updated metrics reports
GREENLIGHT SUPPLIER APPROVAL
In 2015 the Muddy Boots annual licence for Unilever suppliers will
include Greenlight Supplier Approval. This is our new industry
wide collaborative software that connects all members of a
supply chain together to easily access, update and share due
diligence information. There will be more information about this
coming later in the year. You can find out more about Greenlight
Supplier Approval at:
http://en.muddyboots.com/supplier-approval.
GET IN TOUCH
For further detail on anything
mentioned in this section please
email sales@muddyboots.com.
If you have any technical questions
related to Greenlight Assessments
(Quickfire), please contact
support@muddyboots.com.
YOUR AUDITS AND ASSESSMENTS
As we come to the end of the year, here is a reminder of Unilever’s SGS
Verification Audits, the results of which will be available in December, and
your assessment submissions that must be complete before the end of
2014.
SGS VERIFICATION AUDITS
END OF YEAR ASSESSMENT SUBMISSION PEAK
In the final quarter of the year we have once again been
undertaking our annual round of verification audits
with third party auditors SGS. These visits aim to give
our claims of sustainable sourcing additional credibility,
so that we can talk about them externally and share the
great sustainability work that suppliers are doing. This
year 31 suppliers have been selected in 18 countries.
SGS has been visiting both the supplier and three of
their farmers to check that self-assessments have been
correctly completed and that the results are reliable.
As you know the end of the year is a busy time for
assessment submissions. Last year over a third of total
submissions took place in December (see graph below)
and call volume to the Muddy Boots support line was
very high. Some suppliers almost missed their deadline
for submission. In order to prevent problems this year,
we strongly advise you to start your assessment
submission process as soon as possible – there are 86
suppliers with a December deadline still outstanding.
Submitting early will allow Muddy Boots to give you the
best support possible, give you confidence in reaching
your deadline and prevent you from losing Sustainable
Source status. Submitting early does not affect your
deadline for next year – ‘Sustainably sourced’ status
resulting from any submission made before December
31 2014 will have an end date of 31 December 2015.
Audit results will be available in December. If you have
any questions about the process please speak to your
usual Unilever contact.
SAC 2015 PILOTS
Over the past year Unilever has been developing an
update to the Sustainable Agriculture Code. Many of
you gave some really useful feedback, for which we
would like to thank you. Several suppliers are now
testing the update with their farmers, which will help
further highlight areas which are not clear or which
cause difficulty. The pilot will run over the next few
months and the new code will be published next year.
SUSTAINABLE SOY PLEDGE
AT WALMART
On October 6, Mike Faherty, Unilever’s VP Foods North
America, delivered a pledge at the Walmart Global
Milestone meeting to have all Unilever soy sustainably
farmed by 2017. The Unilever Procurement team has
been working hard to support this.
Unilever, along with United Suppliers, were the only
guests asked to make a pledge on stage. Other
companies, such a Kellogg’s, General Mills, Campbell’s
and Pepsi, were invited to stand and be recognised for
the work they were also doing.
This was a great moment for Unilever, with personal
thanks coming from Walmart executives such as Jack
Sinclair, Executive Vice President, Grocery Division, and
Kathleen McLaughlin, SVP, Sustainability.
Walmart’s press release demonstrates alignment with
the USLP, and the event has also been featured in
Supermarket News and other media.
Unilever colleagues joined the packed audience to see
Mike deliver our pledge, linking sustainability to the
total business machine and the great brands we sell at
Walmart.
08
YOUR CONTROL UNION
MARIA CLARA LISSARRAGUE
Being a Unilever SAC consultant in Argentina has been a great experience
for me. I started working with sustainable standards as a Control Union
auditor. My initial role was limited to verifying the compliance of the
operator to the programme requirements but now as a consultant my task
is to combine my own experience with the strengths of each Unilever
supplier. It is crucial to interact and communicate with the farmers and to
understand the different cultures and ways of production.
The ULSAC programme gives Unilever suppliers the
opportunity to be at the forefront of global market
trends, it is in the interest of suppliers to make the most
of the tools provided. In order to implement this
sustainability programme and accomplish its goals it is
important to have commitment from the whole
operational team and confidence that sustainability is
an added value, which is not always tangible in the
short term.
most important achievement, he confirmed that it is the
experience of working within an interdisciplinary team
during the implementation process.
When I visit a supplier for the first time they are often
worried about the biodiversity initiatives. The farmers
are not familiar with the concept of biodiversity and
normally associate this with polar bears in the arctic or
colourful flowers in the jungle, but never with their own
plantations. After sharing different ideas, the farmer
During my work as a consultant for this project I had the starts to understand how these requirements can add
opportunity to visit suppliers producing various types of value to their farms, and they begin to value the flora
products with different cultivation techniques. This year and fauna in the (non) arable areas.
I visited a supplier that was close to reaching
compliance with the ULSAC sustainability requirements.
When I asked the manager what he thought was the
Pictured from left to right: Cristián
Becerra, Natalia Caro, Joselyn
Hermosilla, Javier Hernandez, Maria
Clara Lissarrague and Franco Diaz.
Sometimes the biodiversity initiatives need to be
adjusted during implementation. A very good example
was the strategy developed by a farmer placed in the
dry province of San Juan (Argentina) to avoid foxes
breaking the irrigation hoses when they wanted water.
The farmer decided to spread small containers around
the plantation so the foxes could drink from them. What
the farmer didn’t notice was that the water was heated
by the sun during the day, so the foxes still preferred the
water from the irrigation hoses. Finally the containers
were moved close to the holes of the irrigation hoses, so
the water was renewed each time the crop was
irrigated. This gave the foxes (and other thirsty animals)
access to fresh water from the containers. Through this
initiative, the farmer has also reduced the plastic waste
produced by the broken hoses.
Another good biodiversity example comes from
Mendoza (Argentina): where the supplier encouraged
their farmers to use a wooden pole as an owl perch, this
was particularly relevant as a nest was found in the area.
The farmers agreed to build the owl perch as a
biodiversity initiative, there was just one 60 year old
farmer who was reluctant to do this. He went ahead, but
without motivation, until his little granddaughter
discovered the owls on his farm. From that moment, the
grandfather and the little girl shared the birds care and
did other farming activities together.
During my visits I often discover less obvious benefits
such as the improved relationship between suppliers
and farmers through being partners in the sustainability
project. Interest from new professionals in these (and
other) sustainability initiatives is growing which
suggests that the sustainability pillars can be spread in
agriculture through the enthusiasm of farmers and
employees and also through the motivation of
neighbouring farmers.
I want to encourage the commitment of suppliers and
their farmers on their sustainability journey.
Sustainability is based on continuous improvement and
there will always be new challenges.
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NEW PARTNERSHIPS ANNOUNCED
AT SUPPLIER SUMMIT
Now in its fourth year, the global Partner to Win Supplier Summit has become a key
event in the Unilever calendar. Strategic supplier partners join Unilever leaders from
across the business to discuss how to grow sustainably together in partnership.
At this year’s summit, attended by more than 400
suppliers in London on 1 September, Unilever
announced two new partnerships. One is with the
World Resources Institute, a global research
organisation that helps leaders turn ideas into action to
sustain the world’s natural resources. The other is with
Solidaridad, an NGO that helps companies create
sustainable supply chains.
HELPING END DEFORESTATION
Unilever is partnering with the World Resources
Institute to increase transparency in agricultural
commodity supply chains with the aim of ending
tropical deforestation.
The partnership will enable Unilever and its suppliers to
draw on the resources of Global Forest Watch (GFW)
Commodities, a project of Global Forest Watch, which
offers an online monitoring and alert system that
enables better forest management.
GFW Commodities has produced a suite of online tools
that are used to monitor forest cover change around
supply areas and processing facilities such as palm oil
mills. In using these tools, Unilever will be able to make
better informed sourcing decisions and improve its
reporting of performance against sustainability
commitments.
Deforestation has serious repercussions on the global
climate, local livelihoods and biodiversity – posing a
growing problem to commodity businesses. Research
suggests that the world lost 2.3 million square
kilometres of tree cover from 2000 to 2012.
Unilever is committed to reducing its environmental
impact and ending deforestation across its supply chain
through the Unilever Sustainable Living Plan, which
sets out to source 100% of agricultural raw materials
sustainably by 2020, with a strong focus on biodiversity
and zero net deforestation.
“Unilever is firmly committed to transparent and
sustainable sourcing of raw materials, and GFW
Commodities is providing us with the means to reach
our targets,” said Pier Luigi Sigismondi, Chief Supply
Chain Officer. “In today’s world, businesses can no
longer ignore the risk deforestation poses to vital
ecosystems and people’s livelihoods. This partnership
will bring new focus to see where our risks are highest
and to improve forest management.”
Read more about the World Resources Institute
partnership on www.unilever.com.
Find out more about the GFW Commodities tool.
TARGET TO IMPROVE A MILLION LIVES
IMPROVING THE LIVES OF 1 MILLION PEOPLE
The aim of the new strategic partnership with
Solidaridad is to improve the lives of one million people
in Unilever’s extended supply chains.
The partnership will focus on promoting gender
equality, and improving agricultural and labour
practices, as well as land management and supporting
young agricultural entrepreneurs. It will be targeted at
key raw materials – tea, cocoa, sugar, palm oil, fruit and
vegetables, soy and dairy – in Africa, Latin America and
Asia.
This builds on Unilever’s and Solidaridad’s long track
record of creating sustainable supply chains that
already engage more than 150,000 smallholder farmers
and workers in India, Mexico and Colombia.
Dhaval Buch, Chief Procurement Officer, said: “This
partnership helps drive real change across our value
chain. We are branching into new areas, which is why it
is so important to have the experience and knowledge
of an NGO like Solidaridad. This program will also
analyse and address gender issues in each project as
well as providing access to training on agriculture,
finance, health and hygiene and nutrition.”
The partnership is an example of how Unilever’s
Responsible Sourcing Policy will be brought to life. The
policy, published earlier this year, stems directly from
Unilever’s ambition to increase its positive social
impact.
Read more about the Solidaridad partnership and
watch a short video that outlines its purpose on
www.unilever.com.
12
UNILEVER’S EUROPEAN FOOD BUSINESS REACHES
100% TRACEABLE, CERTIFIED SUSTAINABLE PALM OIL
58% OF GLOBAL VOLUME NOW TRACEABLE TO
KNOWN SOURCES
All palm oil directly sourced for its European Foods
business will be 100% traceable and certified
sustainable by the end of 2014.
OPPORTUNITIES FOR SMALLHOLDERS
Unilever is firmly committed to smallholder farmers and
with its suppliers, works towards improving livelihoods,
incomes and working conditions.
Knowing the origin of palm oil is vital to halt
deforestation which blights communities and the
environment. The Unilever Sustainable Palm Oil
Progress Report 2014 was published at the 12th Round
Table of the RSPO in Kuala Lumpur.
Engaging with smallholders on palm oil is the next
stage of the challenge and is critical to achieving full
traceability. For many smallholders in developing
countries, palm oil provides a way out of poverty and a
chance to raise their families’ aspirations, enabling them
to send their children to school. Unilever is involved in
programmes of this type, such as a pilot partnership
with IDH in North Sumatra. Additionally, a broader
social impact partnership with Solidaridad focuses on
palm oil as a key commodity in West Africa with
potential to scale into Asia and Latin America.
2014 A DEFINING YEAR
Unilever is also gathering many learnings from its
global smallholder farmer programme with other
commodities and applying this knowledge to palm oil.
Unilever now has visibility of around 1,800 crude palm
oil mills, representing around two-thirds of all mills in
the global palm oil industry.
58% of palm oil is now traceable to known mills.
Pier Luigi Sigismondi, Unilever Chief Supply Chain
Officer, said: “2014 has been a defining year for our goal
to create a more transparent palm oil industry. Knowing
where it comes from is a critical step in the journey. The
challenge is enormous and not easy to achieve but we
are determined and can now report good progress. We
want to share our learnings with the rest of the
industry.”
Mr Sigismondi, continues: “This is about doing the right
thing for our planet and our consumers because you
cannot have a healthy business in an unhealthy world.
We want to continue to meet our consumers’ every day
needs in decades to come and this means sourcing in a
fully sustainable way to future proof our supply chains.
Halting deforestation is our end goal and this is what
we work towards.”
It is Unilever’s vision that, by 2020, we will achieve a
transformation of the palm oil market to see the entire
industry to move to 100% sustainable palm oil. Unilever
believes that a profitable and sustainable palm oil
sector must get the right balance between social,
environmental and economic objectives. This is a
shared responsibility between governments, the private
sector and society at large. Hence, Unilever is working
with industry leaders and NGOs to find a solution to
halt deforestation, protect peat land, and drive positive
economic and social impact for local communities.
MEET A SUPPLIER
SUNRICH
Sunrich Manufacturing Corporation is among the first suppliers in the Philippines that responded to
Unilever’s request for support in achieving its sustainability objectives. It manufactures dehydrated
fruits, vegetables, spices, meats and seafoods used for Knorr products. Here, Lorenz Tolentino, Control
Union Consultant, shares Sunrich’s journey with us.
The journey started with two key employees attending the
Regional SAC Training in Jakarta, Indonesia in June 2013.
Learning about Unilever’s sustainability principles from
Control Union, and appreciating the benefits to propel the
business, and ensure the welfare of their employees and
other stakeholders in their supply chain. By implementing
biodiversity-vigilant production methods for their growers,
they brought a big objective back to the Philippines - to gain
sustainability for their main product, tamarind (Tamarindus
indicus), before 2014.
It would not be an easy road to achieve their goal, which
became clear during the first meeting conducted by Control
Union Philippines. Sunrich was faced with different
challenges due to the nature of how tamarind is being
produced in the country. It is considered as a garden plant
and has been used for more than ten decades as a fence for
family compounds. It is a neglected fruit that was only
recognised to have a market value with the introduction of
Knorr Sinigang Mix. In some areas the tree is grown in homes
and in small numbers. During the mapping of farms,
Sunrich discovered that the tamarind trees grow abundantly
on mountainous or upland regions. Since there were no
agricultural production protocols being implemented,
Sunrich was faced with the following challenges:
1. Supply chain complexity
2. Logistics and geographical mapping
3. Availability of technical resources
4. Availability of science-based production methods
Control Union Philippines, customised its service provision
locally in order to provide the best support to Sunrich. It
meant more coaching activities and maintaining contact
which was possible through desktop and mobile communication. With the commitment of the company’s senior management, Mr. Garcia, the President and Ms. Alarcon, and the Vice
President, the team worked their way out of the grey zone.
They did what most small manufacturers in the Philippines
are afraid to do - they staged a number of stakeholder meetings with the farmers and other farm workers to further
understand the intricacies of the chain; they consolidated
all available resources to establish a simplified production
protocol for their growers; they crossed rivers and climbed
mountains in the different areas of the Philippine archipelago
several times to monitor the status of the implementation of
their sustainability activities.
It was not a smooth path, but the effort put in by Sunrich was
balanced by a desire to operate in a manner that does not
compromise the welfare of anyone, or anything, including the
environment.
This year, Sunrich has started its tree planting activities both
in Batangas and Bicol areas, a total of 3,400 seedlings were
planted from June to July, 2014.
For tamarind, a once neglected plant, to be produced using
sustainable methods, is a great result of the strong partnership of the local offices of Unilever Philippines, Control Union
Philippines and Sunrich. Everybody is geared up towards the
frontiers ahead - sustaining what was started, and cascading
the activities to the other raw materials.
MEET A SUPPLIER
LEMON KING
Unilever has been working with their Spanish lemon supplier, Lemon King, to reduce
water used to grow crops. This has involved working with farmers to implement proper
management practices, as well as making better use of public/private infrastructures.
For example, a 500km aqueduct and individual reservoirs have allowed water to be
assigned to specific farms proportionally.
The company processes 30% of the total processing
lemon volume in Spain, and is the largest lemon
processor in Europe. Over 100,000 tonnes of fruit
(including lemons, oranges and clementines) are
processed in the 30,000 m² facility, with the fresh
market being the main driver for farmer’s decisions.
Spain delivers an average of 70% of its lemons to the
fresh market, leaving only the fruits that do not fulfil the
physical quality requirements of the fresh market for
processing.
Lemon King are based in Murcia - a very dry region of
Spain, as such Unilever’s efforts have been focused on
managing water use through drip irrigation. The
program is facilitated using the ‘Cool Farm Tool’, which
was originally developed by Unilever and researchers at
the University of Aberdeen to help growers measure
and understand on-farm greenhouse gas emissions. It
has been tailored in this instance to manage the use of
water, and Lemon King has found it to be very
successful. Now 90% of irrigation is achieved using a
drip system, not only has this reduced the amount of
water used for irrigation, it has also allowed the
company to colonise semi-desert areas to expand the
orchards.
Lemon King remains a family-run business and is deeply
linked to their local agriculture upstream. All of their
produce comes from their own orchards, where their
efforts are dedicated to improving the step-by-step
processing of their fruits. The company hires an
agronomist and offers technical advice to supplying
farmers.
Lemon King achieved excellent results in their first
Sustainable Agriculture Code (SAC) assessments
completed in the Muddy Boots Greenlight Assessments
platform in June this year. 100% of the volume that
Unilever sources from Lemon King can now be claimed
as sustainably sourced, and their SAC Diploma is valid
until 30 June 2015. SAC assessment results from
suppliers such as Lemon King play a critical role in
achieving Unilever’s goal to purchase 100% of its fruit
from sustainable sources by 2015.
14
MEET A SUPPLIER
FRUCO
Colombian local jewel, Fruco, is sowing plans to create brighter futures for farmers and
a better deal for the local environment. Colombia’s much loved tomato sauce brand
has begun an inspired attempt to source local tomatoes for its tomato sauce and paste
products.
The idea first sprouted in 2012 when Colombia’s
President, Juan Manuel Santos, met with Unilever CEO,
Paul Polman. During their meeting the pair discussed
the idea of growing tomatoes for Fruco locally and the
mutual benefits this would have for both Colombia’s
economy and the Fruco brand.
After several months of discussions and planning, a
pilot project, lead by Unilever’s Colombian External
Affairs and Procurement teams, started in June this year,
with tomato seed trials being carried out north of Cauca
and in Valle del Cauca Departments. These crops will be
carefully monitored for six to seven months to see how
well they flourish in the local soil. Unilever will assist the
smallholder farmers involved in the trial with ­improving
their agricultural practices, crop yields and profits to
give everyone the best chance of success.
Unilever and its tomato seed supplier, Syngenta, are
simultaneously working on feasibility plans to test the
price competitiveness of locally grown tomatoes versus
imported tomatoes and the capabilities we have in our
value chain to meet the project needs, such as land
availability and local tomato processing capabilities.
Colombia Corporate Communications and USLP
Director, Guillermo de la Torre, said with Colombia still
recovering from internal conflict, it is hoped this project
will contribute to the on-going peace process: “This
initiative will provide thousands of jobs to people that
are willing to enter into the peace process and don’t
have any immediate source of income.”
He said consumers recognise when brands make an
effort to source local ingredients and support the
local economy, saying; “not only will this initiative
help thousands of smallholder growers and reduce
­transportation costs and CO2 emissions; it’ll drive brand
preference for Fruco too, making this a sustainable
initiative that feeds into our USLP ambition in every
sense.”
The results of the feasibility study are expected in two
years, at which point Unilever will decide if the ­quality,
productivity and price are right to start supplying
­locally.
BRAND SPOTLIGHT
RAMA
Leslie Leinders, Procurement Manager, takes a look at how
Unilever Procurement sustainably sources materials for the
Rama brand.
“Spreads are like margarine, but with less fat. To be
classified margarine, fat content must be 80% or more,
similar to butter. Because people want to live healthier
lives, we have worked hard to reduce the amount of
fat in our products. For the production of margarine,
the main materials we buy are a selection of vegetable
oils (e.g. Rapeseed oil, Sunflower oil, Palm oil) which
are then mixed with a pinch of salt leading to our final
product, the Rama margarine (Reactive: some other
specific ingredients will be added for reasons that will
be explained by the factory managers).
“To guarantee our consumers the best quality and to
secure safe products in all cases, we have set very clear
requirements with regards to quality assurance at our
suppliers as well as in our own plants. We assess our
Supplier’s Quality Systems ensuring their factories work
against the optimal quality and safety conditions. This
is all being assured through clear requirements and
audits.
“Only then do we define the actual Ingredient Specifications (definition of composition and quality requirements); In order to know what we have to buy, we define an ingredient specification. A specification is always
jointly defined by R&D, QA and our supplier. Together
we agree the most optimal definition of an ingredient
needed in terms of functionality, quality and efficiency.
Important aspects are taste, colour, melting behaviour
and absence of free fatty acids.
“So our main focus with our ‘traditional’ suppliers is
to guarantee quality standards through factory audits defining which quality level a factory should be
­operating at and product specifications defining what
­composition and quality aspects the material should
comply with.
“Product quality, food safety and security of supply are
all equally important factors for Procurement based on
which supplier selection is being conducted. Clearly
pricing is an important element as well but if the first
attributes are not met, we do not even need to start to
talk about cost.
“Our focus on quality is stronger than ever but with
our corporate ambition to double our business whilst
halving our environmental footprint and improving
the livelihoods of a billion people we have added a
new dimension to our strategy, which is sustainability.
With this strategy, sustainability and traceability have
­become equally important factors to our sourcing
process. Also here we are very demanding and consider
those factors to be pre-requisites for a strategic relationship. With the transparency we are creating we achieve
two goals in one: through the transparency we know
where our ingredients we buy are coming from and on
top of that we much better understand the
supply chain and its respective cost
drivers hence we can determine
much better where there are still
inefficiencies to be tackled.”
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Traditionally, Unilever sourced its vast majority of
volumes of ingredients from parties one level up in the
value chain i.e. processors/traders agreeing its requirements with those processors. So in the case of rapeseed
we only engaged with our first tier suppliers being the
oil crushers and refiners and considered them to be
responsible for the sourcing of their materials.
Today, we are more and more engaging upstream in
the upstream supply chain i.e. we connect with growers
to even better understand their issues, to guide them
on the implementation of sustainable practices and to
provide full transparency to our consumers of our
supply chain.
This practically means that we are mapping the origin
of the rapeseed enabling us to tell our consumer as exactly as possible, where the materials we buy are grown.
Knowing the origin of our ingredients we are getting
much more involved in the upstream supply chain up to
the farmers. Working closer together with our suppliers
and their farmers obviously is only possible now that
we increased our knowledge about where our products
are originally coming from.
In general we do not pre-determine where the supplier
needs to grow its crops. As we are often faced with
existing historically grown supply chains, often based
on the farmers expertise where to best grow specific
crops, our first aim is to make the origin transparent.
Once we know the source of our ingredients we
embark together with our suppliers and their suppliers
on a journey to implement the Sustainable Agricultural
Code. As part of the Unilever Sustainable Living Plan
where we consider the full supply chain (raw materials,
processing, transport, consumer) we have introduced
the Sustainable Agricultural Code enabling all our agricultural materials to be Sustainably Sourced. This code
describes in 11 chapters what we as Unilever consider
to be sustainable and focus around soil, waste,
agrochemicals, water, etc.
Once farmers and suppliers have assessed themselves
against the Sustainable Agricultural Code and comply with the Scheme Rules they are considered to be
sustainable hence we include them in our Sustainable
supplier database. In order to provide assurance and
credibility of the Unilever process we conduct an annual
auditing program through 3rd party SGS.
CLOSER LOOK AT THE SUPPLY CHAIN
Step 1: is related to growing the seeds by the farmer,
where you already heard the explanation by Landwirt
Hanssen. Based on the gap analysis we do with the
growers, an action plan is being developed in case a
supplier does not yet comply with Unilever’s sustainability requirements. In case they do comply, we also
define the continuous improvement activities and
agree a Biodiversity Action Plan.
Step 2: delivery/collection of the harvested feedstock
(i.e. seeds) from the land into cooperatives who store
the seed. Storage is required to bridge the gap between
the consequent crops as well as the gap between
production runs at primary processors. First reason
to collect the seeds into a central location is the fact
that farmers do not have the capacity to store on site.
Secondly central storage at coop is both more efficient
and assures higher quality as being managed through
specialists. On top of that coops also play a role of
financing and increasing leverage. This is a first step of
bundling volumes and reduces the possibility to trace
back to farmer level.
Step 3: from storage silos, the seed will then be transported into the processing facilities of the oil crushers
who run a more or less continuous bulk operation,
meaning that the volumes from several coops will be
bundled together in silos at crusher’s site. So at this
stage of the supply chain we can still determine the
regional origin of all coops and their farmers who supplied the seeds. As long as crushers are only processing
seeds from the above mentioned origins we can still
determine the regional origin of the oil which is processed.
(Sometimes crushers need to buy in seeds from other
origins in order to keep their factories running. Several
reasons for this can be mentioned e.g. crop failure at
regional origin, factory economics and capacity issues
at other processing plants.)
Step 4: another step of storage and transport (now of
the oil) will then be conducted to either deliver the oil
to a refiner or to the customer who will process the oil
as ingredient into its end products.
As you can understand from the described supply
chain, depending on the complexity of the supply
chain we can more or less track up to farm level where
our ingredients originate from. In some more complex
supply chains we will be able to know this to mill, coop
or region level hence we can provide a high level of
traceability.
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Anna Powell
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