Despite the benefits, only four of the world’s largest food producers – Danone, Heinz, PepsiCo, and Unilever – have developed and implemented plans that regulate their suppliers’ environmental performance, according to a new report from analysts at Verdantix.
Verdantix benchmarked the supply chains of the 12 largest global food firms. The 12 firms had collective revenues of $390 billion, but eight of its members — Associated British Foods, ConAgra Foods, General Mills, Kellogg Co., Kraft Foods, Mars, Nestlé, and Sara Lee —are at risk by not investing in environmental supply chain guidelines and should anticipate non-governmental organization scrutiny, resource scarity, and competitive pressures as supply chain information becomes more public.
Verdantix’s Sustainable Supply Chain Benchmark: Food Sector report noted the other brands could benefit from standards and targets established by Nestlé around material sourcing, supplier training, and compliance with standards and upcoming regulations.
Among the first suggestions of the report is to develop an industry-standard platform where suppliers and buyers can share information to reduce costs and increase the amount of available supplier data.
Verdantix suggests companies are now in a position to mandate environmental and worker/social conditions. It proposes a goal of 100 percent sustainable supplies around agricultural and raw materials and the best way to go about this would be direction from executives and boards.
Country-specific product sales are also a place to invest as Verdantix said they present unique opportunities around high-risk suppliers and goods. It noted Kraft’s commitment to source 100 percent certified sustainable coffee beans, but only in Europe.
Like most benchmarking reports, the company suggests to establish a baseline. This can be used to monitor supply chain strategies and see those that produce lower costs while managing social and environmental issues. Verdantix said companies sourcing goods in countries with certain worker standards can reduce their risks around brand damage due to humanitarian issues and rights abuses. – Geoff Whiting
Report: Sustainable supply chain to benefit food shippers
