How to cultivate sustainable food and beverage supply chains
Consumer pressure – dialled up at COP26 – means that organisations must be more sustainable. Smarter procurement and supply chain management, and greater collaboration, will lead to more circular business models, according to attendees at our recent roundtable
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
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.
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