Sustainability in ingredient sourcing becoming a critical issue

by Keith Nunes
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KANSAS CITY — On Aug. 11, the Consumer Goods Forum (C.G.F.), a Paris-based consortium made up of some of the world’s largest retailers and food processors, published a series of palm oil sourcing guidelines. The document is part of the C.G.F.’s effort to achieve zero net deforestation by 2020 and highlights how important sustainability, whether it is related to the environment or the quality of life for workers, is becoming to the global food ingredient supply chain.

The palm oil sourcing guidelines are designed to assist companies in designing their own policies for sourcing palm oil sustainably. The document was developed by the C.G.F., but includes quite a bit of input from standard-setting organizations, non-governmental organizations and suppliers.

“I urge C.G.F. members and other companies sourcing palm oil to adopt these guidelines to help make sustainable palm oil the mainstream option,” said Irene Rosenfeld, chairman and chief executive officer of Mondelez International and a C.G.F. board member.

Palm oil is a widely used vegetable oil. Malaysia and Indonesia are the leading producers of the raw material, accounting for 86% of global production. Although potentially one of the more sustainable vegetable oils, there is concern among a variety of stakeholders that rapid expansion of palm oil plantations has resulted in the loss of tropical forests and led to social conflict.

Cocoa is another commodity that is undergoing a transformation. Cargill, for example, is working to improve the livelihoods of cocoa farmers in Cote d'Ivoire, Brazil, Cameroon, Ghana and Indonesia by paying a premium for sustainable cocoa, and Nestle has reaffirmed its commitment to fight child labor in some cocoa-growing regions of the world.

This past May, The Hershey Co. published its annual corporate social responsibility report and noted that in the area of ethical sourcing and sustainable agriculture, Hershey is up to 30% use of certified cocoa, ahead of schedule to reach its 2015 goal of 50%. Hershey has pledged to use 100% certified and sustainable cocoa in all chocolate products by 2020.

“Over the years, we have diversified our products to include hundreds of non-chocolate confections,” Hershey said. “Yet much of our tradition is and will always be embedded in the creation of chocolate,” the company said. “With Hershey chocolatiers crafting new chocolate recipes and our customers buying more chocolate products, from Hershey’s Milk Chocolate bars to Dagoba Organic Chocolates, we realized it was crucial to rigorously address the sustainability challenges for sourcing our primary ingredient, cocoa.”

The Global Sustainability Summit, an event co-sponsored by the Grocery Manufacturers Association and the Food Marketing Institute, will take place Aug. 19-21 in Denver. The meeting is designed to give companies that participate in the food and beverage supply chain the tools to enhance and improve their sustainability programs.

The efforts by the C.G.F., Cargill, Nestle, Hershey and all of the other companies focused on improving the sustainability of the supply chain are positive. But such events as the Sustainability Summit are critical to future improvements. This is an issue that is not going to go away and a focus on continuous improvement is mandatory.

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