How to cultivate sustainable food and beverage supply chains

Round­table atten­dees

Mauri­cio Coin­dreau, head of pro­cure­ment and sus­tain­abil­i­ty – UK, Ire­land, Spain and Canary Islands, AB InBev
Ali­son Rance, vice-pres­i­dent, Arla Foods
Chris Shear­lock, fish sus­tain­abil­i­ty man­ag­er, Princes Group
Scott Spencer, senior vice-pres­i­dent, glob­al strate­gic accounts, Avet­ta
Thomas Ude­sen, chief pro­cure­ment offi­cer, Bay­er, and co-founder, the Sus­tain­able Pro­cure­ment Pledge

How have food and bev­er­age sup­ply chains evolved since the start of the pan­dem­ic?

SS It’s been fas­ci­nat­ing over the past 20 years to see the evo­lu­tion of com­pli­ance around sup­ply chains and pro­cure­ment. It’s no longer a tick-box exer­cise. The need for dig­i­tal trans­for­ma­tion, and vis­i­bil­i­ty, across the sup­ply chain has undoubt­ed­ly been catal­ysed by the soci­etal changes spurred by the pan­dem­ic. Pre­vi­ous­ly, busi­ness­es might have con­sid­ered high-yield sup­pli­ers to be high risk, but increas­ing­ly the most risk is in the long tail with less trans­paren­cy. As a result, it’s nev­er been more cru­cial for Avetta’s clients to have more data to improve process­es and make fun­da­men­tal changes for the right rea­sons.

AR The pan­dem­ic has made many food and bev­er­age indus­try com­pa­nies re-eval­u­ate their social and envi­ron­men­tal cre­den­tials. At Arla Foods, we have always tak­en a peo­ple-first approach, and the man­age­ment and safe­ty of our staff – clas­si­fied as key work­ers in the lock­downs – was crit­i­cal dur­ing the pan­dem­ic. Know­ing that dig­i­tal is the future and want­i­ng to retain col­leagues, we have invest­ed a lot in train­ing. Prepar­ing for the dig­i­tal world is one side of it, but we also want to empow­er our peo­ple regard­ing sus­tain­abil­i­ty. It’s a top­ic that is at the top of a lot of the employ­ee sur­veys. We want peo­ple to be proud of their employ­er.

MC The most sig­nif­i­cant change in the mar­ket was the shift from on-trade to off-trade. The shut­downs in pubs and restau­rants made peo­ple con­sume more at home, so our pack­ag­ing and brand mix changed, which means our sup­ply chain had to change. We also saw how the bal­ance on glob­al sup­ply has shift­ed from new prod­ucts and ways of con­sump­tion, mean­ing you need to be clos­er to your local cus­tomers and local sup­pli­ers. The pan­dem­ic also brought new oppor­tu­ni­ties to adapt to the ben­e­fit of our local com­mu­ni­ties. For exam­ple, we dis­trib­uted alco­holic dis­in­fec­tant and hand sani­tis­er for front­line work­ers in the UK by util­is­ing the alco­hol we remove from our zero-alco­hol beers.

CS With­in the fish sec­tor – par­tic­u­lar­ly in tuna – sus­tain­abil­i­ty is the start­ing point for all com­mer­cial dis­cus­sions. Princes works on a mul­ti-ocean sourc­ing approach for tuna that helps us remain com­pet­i­tive while main­tain­ing year-round avail­abil­i­ty, qual­i­ty and meet­ing our sus­tain­abil­i­ty require­ments. This approach was ben­e­fi­cial for us at the start of the pan­dem­ic. For our brand­ed tuna, we are very close to claim­ing 100% is respon­si­bly sourced across all ter­ri­to­ries – this is the result of a decade’s work with our sup­pli­ers.

TU Coro­n­avirus remind­ed us that we need to face chal­lenges togeth­er, and many organ­i­sa­tions realised the link between sus­tain­able prac­tices, good sup­pli­er rela­tion­ships and resilience. We launched the Sus­tain­able Pro­cure­ment Pledge two years ago with a dream to ensure all the 1 mil­lion pro­cure­ment prac­ti­tion­ers on the plan­et, across dif­fer­ent val­ue chains, have access to rel­e­vant knowl­edge and do the right thing. There is an over­whelm­ing chal­lenge, but now we have 142 coun­tries and more than 5,000 ambas­sadors. The pan­dem­ic shows that we can solve chal­lenges with col­lab­o­ra­tion, not sep­a­ra­tion.

How can sus­tain­able trans­for­ma­tion be dri­ven in the food and bev­er­age indus­try through part­ner­ships?

TU There now seems to be a greater accep­tance that while there will be com­pe­ti­tion on tech­nol­o­gy and val­ue propo­si­tion, and so on, sup­ply chain prac­tices are not some­thing on which organ­i­sa­tions are will­ing to com­pete. This is not some­thing you will read in the text­books. At COP26, we saw many big play­ers come togeth­er to cre­ate more cir­cu­lar­i­ty in our sys­tems, and if all indus­tries start to map out their val­ue chains, we can be smarter with our resources.

AR Text­books can’t keep up with the pace, frankly. In the past, we’ve prob­a­bly thought of sus­tain­abil­i­ty a lit­tle bit as an inno­va­tion, a com­pet­i­tive advan­tage. Ulti­mate­ly, we’re all try­ing to catch up as quick­ly as pos­si­ble. It’s not about being first to mar­ket, though; there needs to be an indus­try-first approach to solv­ing prob­lems. For instance, we all still use a lot of shrink or stretch wrap. If we put our minds to it and work togeth­er, there have to be bet­ter, more sus­tain­able solu­tions.

MC No sin­gle com­pa­ny can solve today’s sus­tain­abil­i­ty chal­lenges alone; part­ner­ships are essen­tial to mobilise the whole val­ue chain. We launched the 100+ Accel­er­a­tor glob­al incu­ba­tor pro­gramme to solve sup­ply chain chal­lenges, span­ning water stew­ard­ship, cir­cu­lar econ­o­my, sus­tain­able agri­cul­ture and cli­mate action.

CS Part­ner­ship-work­ing is cru­cial for improv­ing seafood sus­tain­abil­i­ty. Princes is active­ly work­ing in part­ner­ship with its cus­tomers, non-gov­ern­ment organ­i­sa­tions, or com­peti­tors on seafood sus­tain­abil­i­ty. For the past five years, we have worked with a rival brand on fish­ery improve­ment in the Indi­an Ocean, because it spans almost all of the mutu­al sup­ply chains for our plants in Mau­ri­tius and their plants on the Sey­chelles.

SS It’s incred­i­ble to think about the syn­er­gies that can be cre­at­ed across ver­ti­cals if best prac­tices are shared. For exam­ple, food and bev­er­age organ­i­sa­tions might con­sid­er what Ama­zon is doing to dri­ve sus­tain­abil­i­ty and how they can adopt those process­es. Or they could take a look at how cement com­pa­ny Hol­cim Group’s car­bon cap­ture tech­nolo­gies col­lect CO2 from indus­tri­al process­es.

What is the future of sup­ply chain and pro­cure­ment in the food and bev­er­age indus­try?

CS There is a dif­fer­ent feel­ing in the food and bev­er­age indus­try, and the dri­ve for greater sus­tain­abil­i­ty is clear. In a recent meet­ing, a client’s com­mer­cial direc­tor was com­fort­ably talk­ing about their scope three emis­sions and sci­ence-based tar­gets. It’s evi­dent sus­tain­abil­i­ty is no longer a bolt-on to a fluffy cor­po­rate social respon­si­bil­i­ty strat­e­gy.

AR The idea that there is val­ue in every drop is a big part of our five-year strat­e­gy. What do we do with our biprod­ucts? Look at the abat­toirs; noth­ing of the car­cass is wast­ed. When you put your mind to it, using every bit of the raw mate­r­i­al is sim­ple to achieve, and it is a fun chal­lenge for sup­ply chain pro­fes­sion­als.

SS I’m see­ing my clients lean in more at the work­er lev­el. One of my clients, which pro­duces choco­late, had to go all the way to pur­chas­ing plan­ta­tions in Latin Amer­i­ca to ensure that child labour wasn’t being utilised.

MC One of our recent announce­ments is to start pro­duc­ing and using green hydro­gen at our Magor brew­ery, which we know is crit­i­cal to reach­ing net zero. Tech­nol­o­gy and diver­si­ty will always be key fac­tors in how pro­cure­ment and sup­ply chain will con­tin­ue to evolve. Take risks and invest in star­tups look­ing to change the game and be mind­ful of how to diver­si­fy the sup­pli­er base to adapt bet­ter to where the mar­ket is mov­ing.

TU Scarci­ty is the moth­er of all inno­va­tion, some­one once said. The world is wak­ing up to the fact that we are mov­ing from abun­dance to scarci­ty. Waste­ful past prac­tices a decade ago were accept­able, but they don’t apply in a world of scarci­ty. So, if we talk togeth­er, we’ll be okay.

For more infor­ma­tion please vis­it avetta.com