Sustainability pays off, but it’s not always traceable

The global demand for natural raw materials such as coffee, tea, cocoa and palm oil continues to grow robustly. However, all the signs indicate that the producers of such resources will be unable to meet long-term demand. Therefore, most buyers are attempting to safeguard raw material supplies by investing in sustainability, primarily through independent certification schemes. Nevertheless, it is unclear whether they actually receive the same volumes of sustainable materials as they purchase – especially when it comes to cocoa and palm oil.

By Marcel te Lindert

By 2050 the world population is expected to be nine billion, which is two billion more citizens than today. The global middle class is growing even more rapidly: KPMG has calculated that by 2030 there will be three billion more middle-class consumers than in 2010. Consumption, especially of ‘luxury’ products such as coffee, tea and chocolate, is expected to increase substantially, in particular in the emerging economies in the Far East, South America and parts of Africa.

At the same time, the World Resources Institute forecasts that by 2050 the agricultural land close to the equator, which is where such products are grown, will be yielding 20 to 50 percent less than today due to climate change. The international buyers of cocoa at trading company Amtrada are already noticing diminished harvests from many cocoa trees in terms of both quality and quantity. “On top of that, it’s simply not considered cool to be a cocoa farmer in West Africa,” says Franka Seijbel from Amtrada.

In other words, the demand for coffee, tea and cocoa is growing tremendously while the supply is declining. If nothing changes, food manufacturers who process these natural, renewable raw materials will soon face major problems.

Pruning and weeding

Thankfully, it’s not all bad news; there are some positive signs too. The coffee, tea and cocoa producers who are linked to Fairtrade International, UTZ Certified or Rainforest Alliance are actually seeing increases in the yield from their agricultural land. In January, for instance, UTZ published an impact study which stated that certified coffee growers in Colombia harvest 169 percent more coffee per hectare than their non-certified colleagues.

Rainforest Alliance signalled in 2012 that its member cocoa farmers in Ivory Coast generated 73 percent more yield per hectare than non-members, plus that they earned almost four times as much. That not only means that member farmers are earning a better livelihood, but also makes the profession more appealing to newcomers.

The higher yields are the direct result of training. Member farmers learn the importance of fertilising, pruning and weeding their plants. They are given practical tips, such as to plant trees that create shade and hence protect the crops. Such measures often improve the quality of the harvest as well as the quantity: larger coffee beans, better tea leaves.

Hence, the benefits of the ever-growing presence of a Fairtrade, UTZ or Rainforest Alliance logo on the coffee, tea and chocolate products on supermarket shelves are twofold. Firstly, the logos enable manufacturers – and food retailers who feature them on their privatelabel products – to show consumers that they pay a fair price to coffee, tea and cocoa growers, consider the environment and do not use child labour.

Secondly, certification gives these companies an instrument with which to stimulate the sustainable production of such natural raw materials and hence to safeguard the long-term supply of sufficient coffee, tea and cocoa.

Evidence of payments

Starbucks is one company at the forefront of sourcing sustainably produced commodities. With over 20,000 stores in more than 60 countries, the retailer has set itself the goal of serving only ‘ethically purchased’ coffee by 2015. The company is well on the way to achieving that: in 2012, it was at 93 percent. “Ever since its foundation in 1971, Starbucks has been a company that is very aware of its social role,” explains Jan Huijgens, senior manager of logistics for Starbucks in Europe.
The full article was published in Supply Chain Movement 12

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