Creating Social Value Blog / Corporate Social Relevance

Food for Thought on Farms and Food II: Europe, Asia, the World

By Bradley Googins & Philip Mirvis

A monthly installment from two of The Lewis Institute’s Social Innovation Fellows: Bradley Googins and Philip Mirvis.

Our prior blog took us on a tour of innovations in sustainable food and farming in the U.S.  Here the foodies’ tour continues with what’s new in these regards in Europe, Asia, and other parts of the world.

In June, we were off to Bilbao, Spain to meet with colleagues and companies that comprise the Global Network on Corporate Citizenship.  There we dialogued about growing numbers of social innovations in business and increased corporate partnering with other businesses and NGOs.  We also visited Mondragon, the fabled €15 billion confederation of worker cooperatives in the Basque region that weathered the global recession through aggressive exporting, overseas expansion, and shared sacrifices among member companies.

In preparation for the meeting, we perused Unilever’s newly issued 2012 Sustainable Living Plan Progress Report where it announced that some 36% of its raw materials were “sustainably sourced.”  So what’s the big deal with this?

Chief Procurement Officer Marc Engel explains: “Climate change, water scarcity, unsustainable farming practices, and rising populations all threaten agricultural supplies and food security. Half of the raw materials Unilever buys are from the farming and forestry industries, so ensuring a secure supply of these materials is a major business issue. However, sustainable sourcing is not only about managing business risks, it also presents an opportunity for growth, allowing brands to stand out in the marketplace.”

Europe’s Food Scene

Since 2005, we have chronicled Unilever’s efforts to reduce trans-fats (over 30,000 tons!) and saturated fats from its food and margarines, cut back on sugar and salt in its recipes, and provide more low-calorie food-and-beverage options for consumers.  In recent years, the company has turned its attentions upstream–working with the Rainforest Alliance on its tea plantations and to ensure sustainable sourcing of vanilla beans and cocoa.  It also procures GreenPalm certified palm oil for its foods and Dove soap.  Unilever-owned Ben & Jerry’s, while no winner on sugar and fat, now features a diverse portfolio of fair trade ice-cream offerings.

But the Sustainable Living Plan is not just aimed at the health of food, consumers, and the planet.  Fair trade and certification measures also enable farmers, particularly “smallholder” farmers, to better care for their lands, communities, and families. Smallholder farmers grow their crops on less than two hectares of land and make up 85% of the world’s farmers.  Many lack the education, training, and funds to acquire higher-quality seeds, adopt modern farming practices, and earn a decent return in world commodity markets.

Unilever has been working with cocoa supplier Barry Callebaut to run farmer field schools with 20,000 smallholders across West Africa. The schools help local farmers to build skills and knowledge about sustainable cultivation practices. A partnership with Symrise in Madagascar has trained more than 1,100 vanilla bean farmers with 5,000 more slated for the training program.  All told, some 450,000 smallholders have been engaged in Unilever sustainability training programs, many assisted by micro-lending.

Une Sustainable Tumate

Is this only about farming in developing nations? Au contraire, Unilever’s Knorr brand has launched a new soup in France that features sustainably sourced tomatoes from across Europe.  One of Knorr’s tomato suppliers is the Consorzio Interregionale Ortofrutticoli (CIO), a European association of tomato growers working with 690 farmers cultivating 9000 hectares of land in the area of Parma, Piacenza and Cremona in North Italy. “We work with Knorr together on sustainable agriculture initiatives,” says Valerio Guareschi, Sales Manager for CIO. “Here at CIO we have an agronomist department to help the farmers improve their farming techniques and sustainability.” CIO’s farmers have had to learn to use drip irrigation technology and computer software to monitor water use, soil conditions, and crop health.

Unilever is not the only big food company in Europe that is staking a leadership position in sustainability.  Nestlé, the world’s largest food-and-beverage company, has its own Sustainable Agricultural Initiative, works actively (with Pepsi and Coca Cola) to reduce water use, and has forged “shared value” partnerships with coffee, cocoa, and dairy farmers.  (Ok, there is work to be done on the nutrition side of things.)  Danone, the French food producer, is a global leader in healthy food development and along with acquired Stonyfield has invested heavily in R&D to improve the nutritional qualities of yogurt.

Unilever, Nestlé, and Danone all get top marks from industry experts for the depth and breadth of their sustainability initiatives and achievements.   Sad to say but, in this arena, U.S.-based food companies Kraft, General Mills, and Kellogg Co. pale in comparison.

To Asia

In Spain, we met Belen Rillo and Gisela Tiongson of Jollibee Foods Corp., a restaurant chain in the Philippines. Representing the Jollibee Group Foundation, they are actively involved in a public-private Farmer Entrepreneurship Program (FEP) that aims to ease the entry of small farmers into the company’s supply chain.  “Jollibee is conducting a leadership and entrepreneurial skills session for us. It just opened an opportunity for us to sell them eight tons of garlic a month,” said Reginald I. Yadao, project coordinator for the Sinait Garlic Center of the North Producers Cooperative.

The benefit for Filipino farmers?  Their cooperate earns a net income of P171,540 per hectare, compared to P100,000 per hectare on traditional garlic farms.

In another project, Jollibee has partnered with Catholic Relief Services, the National Livelihood Development Corporation, and academics to help women farmers to deliver their vegetables to the company.  Ms. Tiongson had the opportunity to showcase this project and the FEP overall during a July visit to the Philippines by a U.S. trade delegation. (BTW, looking for a U.S. restaurant chain that supports and buys from local farmers?  Chipotle and…..?)

This farm to food tour culminated in Thailand where one of us (Mirvis) met with Supree Baosingsauy of Charoen Pokphand Foods.  CPF is a part of Thailand-based CP Group involved in animal feed production, livestock breeding, and the processing and sale of food products.  The CP Group is also engaged in non-GMO maize and rice farming, shrimp and fish aquaculture, and other non-farming businesses.

Mr. Baosingsauy is the company’s lead in the Rural Lives Development Foundation which supports local farmers throughout Thailand and Southeast Asia (including parts of India and China).  Through the foundation, CPF offers funds, seeds, fertilizer, animal breeds and vaccines, academic and technology advices, as well as a guaranteed pricing system and marketing tools to smallholder farmers.

Like Jollibee, CPF has also been involved with a school lunch program.  The campaign now involves 400 schools nationwide and over 80,000 students.  In addition, CPF has initiated fish farming at eight schools in Nakhon Nayok, where fish are raised in clay and cement ponds. At some schools, vegetables are grown with chicken excrement.

“We are promoting fish farming as it’s easy to get going and look after. Protein from fish can address the nutrition problem, and students get valuable training.  Aside from getting a proper lunch, they can learn from professionals and build up their careers from this knowledge,” said one program staffer.

This summer CPF announced the launch of its new sustainability campaign and began training its business leaders in best-practices.  The newly designated sustainability “champions” were briefed on Unilever’s Sustainable Living Plan and the shared value programs of Nestlé, and devised a three year plan to compete with western giants in the brave new world of sustainable farming and food production.

Oh, note that the company also announced plans to invest $120 million in Philippines’ shrimp and fish farming.  Small world.