Cargill is working with a farming cooperative in Argentina to establish a sustainable supply of stevia for its Truvia brand of sweetener

Juan Houchur sits in a camp chair on the balcony of one of the outhouses on his 25-hectare farm and smiles. Behind him, on a sloping field, 2.5 hectares of small, green stevia plants flutter in a light breeze, planted on gently curving terraces. “For me, it is really good,” he says. “It is a new alternative that could be better than tobacco.”

Like many of the farmers in the rural Misiones region of northern Argentina, Houchur is pinning his hopes on the stevia plant – a natural sweetener that he will soon be harvesting in bulk for the first time.

This is the culmination of a four-year partnership between American food multinational Cargill and the local Co-operativea Tabacalera de Misiones (CTM) – a farmers’ cooperative – to commercialise stevia production. Early in 2011, about 500 tonnes of the crop will be harvested commercially for the first time.

“This investment is in excess of $10m,” says Elizabeth Fay, corporate affairs lead for Cargill’s natural sweetener brand Truvia. Money has been spent on plant breeding and propagation, agricultural training and infrastructure.

For 12 years, Houchur, one of 7,000 members of the co-op, has been farming mostly tobacco, as have many of the farmers in the Misiones district. His battered clothes and the small concrete house he and his family live in suggests that he is not a rich man.

Beside him, Juan Bentos, a leading CTM member, explains how the curved terraces help avoid water waste. “You have to preserve water,” he says. With 50 hectares of his own, Bentos has also moved into stevia production. “It’s very important,” he says. “The expectation is really high.”

Cargill, too, has high hopes for stevia. Currently Truvia is made from stevia largely sourced from China, and already has a retail value of $45m – 9.1% of sales in the US sugar-substitute category. Truvia accounts for 58% of stevia-based tabletop sweetener sales and is used in brands including Coca-Cola’s Sprite Green and Hansen’s Natural Lo-Cal juices.

Here in Argentina, Cargill has been working with CTM to create a completely natural supply chain for stevia – using small farmers such as Houchur and Bentos in the Misiones area. Cargill projects that within three years South America will account for more than half of its stevia supply. Houchur may have a small farm, but it is becoming part of a much bigger business.

Natural source

“We had been looking all over the globe to find the optimum areas for stevia,” says Zanna McFerson, Truvia enterprise business leader, and assistant vice-president, Cargill Health and Nutrition. McFerson has just flown down from the company’s Minnesota base to monitor progress in Argentina along with Mark Brooks, the brand’s product line director, and a team of Cargill executives.

“We found a really well-organised cooperative and phenomenal expertise. There was a really good fit. There was never any doubt in my mind that this was the right place,” she says.

CTM has been cultivating stevia, which grows naturally all over this border region of Argentina, Paraguay and Brazil, since 1992. But the organisation lacked the investment and expertise to bring it to market.

“We grew various varieties and we decided to create a sweetener brand,” explains Jorge Nestor, president of CTM. “We couldn’t do it alone. In Cargill, we found the best way to reach an international market.”

Now the first major harvest is looming. “In the future, this could be the principal activity,” Nestor says. “And we are prepared for it.”

Painstaking research

Work began at CTM’s substantial research centre, set on gently sloping fields among the pine trees a short drive from the co-op’s main headquarters. Here, in a climate-controlled micro-lab, workers in masks and white coats painstakingly separate seeds to send to Cargill’s research centre in the US. There the company works on isolating the varieties that have the best “taste profiles” that carry the highest volume of active ingredients and have the best resistance to weather and disease.

At the lab, tiny plant cuttings are grown in controlled conditions. The best quality mother plants undergo accelerated growth in a micro-propagation centre. “We are propagating the best plants to get seed, some of which will be given to farmers,” explains Juan Bernad, Truvia South American business manager.

Others, like Juan Houchur, received seedlings free of charge from Cargill. CTM has two agricultural technicians who visit farmers like him to provide advice and training.

Lab manager Andrea Schendelbek opens the door to a giant greenhouse full of tiny plants. “All the plants from the lab come here,” she says. Plants are cross-bred again and again to produce the best varieties. Behind the greenhouse are fields of the green plants. Cargill executives say they are deeply impressed with the rate of progress and production.

CTM’s stevia farming manager Guillermo Andersson says there are currently 100,000 plants in the fields. By February next year, he expects to have more than 2m plants. “This is about getting a consistent variety that keeps on improving,” McFerson says. “And one day,” adds Brooks, “it will be in a little packet.”

A little packet, maybe, but full of a natural product. This is the aim – and it makes good business sense. In South America, Cargill has been subject to scrutiny. In 2006 Greenpeace activists blocked its controversial soy operation at Santarém in the Brazilian Amazon state of Pará.

But the company has reacted to the criticism. After a 2006 Greenpeace report on the level of deforestation caused in the Amazon by soy farming, Cargill and other companies froze soy trade with producers suspected of illegal deforestation. Only 0.25% of Amazon deforestation is now caused by soy production, according to Brazilian government figures.

“The moratorium shows that production and conservation can go hand-in-hand,” Paulo Adario, Greenpeace Brazil’s Amazon campaign director, told Ethical Corporation. The balance between development and conservation is vital in the Amazon – which is home to more than 20 million people, among Brazil’s poorest.

Sustainable practices

As a large private company, Cargill has in the past also been accused of unnecessary secrecy. There now appears to be movement across the board to make changes. Elizabeth Fay says the company has been engaged in sustainable agricultural practices for many years but that there is now a move towards more openness.

“As a company, we recognise there are many opportunities to improve our communication and transparency on our efforts in these areas,” she says.

The Brazilian Amazon is a wild frontier region that frequently ignores federal government directives. Here in rural Argentina, a greater control over production is more feasible. With stevia, Cargill set out to create a sustainable supply chain from scratch.

“We had to think about what is meant by that,” Brooks says. “We spent a year reading the literature, understanding our current impact. We set ourselves some targets. Statements of intent were worked out, and we worked on what our water imprint is.
We had to go to a micro-level and build it back up. Then invite outside people to come in and critique.”

Chemical engineer Deborah Ross, sustainability manager for Truvia, who comes from the Cargill Technology Development Centre, did an extensive life-cycle analysis of the process. The company looked hard at what standards existed on corporate responsibility reporting. “The certification community has established common ground on 80-90% of what it means to be sustainable,” Fay says. And full details of the Truvia supply chain will be on the project’s new website.

Traceable supply chains

CTM already has education and health programmes. “They are very good as partners. They already have Global GAP standards in place for citrus production. We are partnering to develop and implement sustainable agricultural practices for stevia. It’s not being put upon them, it’s being done together,” McFerson says.

CTM say the stevia it produces will have a tracking system that means it can be traced back to the lots it was grown on and the farmer who grew it. Traceability like this is a core development for companies trying to do sustainable business in South America.

Cargill looked at how companies such as outdoor clothing maker Patagonia had tried to embed sustainability from day one. Patagonia has created a reputation for sustainable business practices. It has a section on its website called the Footprint Chronicles – which details successes and, equally importantly, failures in its drive to create a sustainable supply chain from South America. Patagonia is now teaching green supply lessons to US retailing giant Wal-Mart.

“Neither of those businesses has ever claimed to have reached perfection, or that they have in any sense ‘arrived’ at full sustainability,” says Elizabeth Fay. “The lesson of brands like Patagonia is the journey they are on – where sustainability is a guiding principle not a destination.”

Troy Rhonemus is Truvia business process manager and is working on stevia’s supply chain. “Most of what I do [elsewhere] is about cost reduction,” he says. “Here it is about sustainability.”

Limiting water use and erosion – with the use of curved terraces, for example – is one part of that. “Developing technology that reduces water use is important. It’s all about getting down to the fundamental science of extraction,” Rhonemus says.

Another is in recycling waste produced in the process. “A big part of the carbon footprint is using that in a positive way,” Rhonemus says. “We are working hard to use it on the farm level, either for feed, doing a lot of work working out what the value of that is. It’s a supply-chain issue. And it’s a lot of biomass.”

CTM already produces cattle feed from the biomass left over from its citrus production: one option might be to combine the two. The feed could be shipped elsewhere within the Cargill world network. “We have the capability to recycle any product,” Rhonemus says.

Community projects

Nearby, school number 255 sits in rolling hills, up a dirt track, surrounded by fields of tobacco plants in the Colony Caa-Guazú district. The headteacher, Patricia Brollo, is in ebullient mood as executives from Cargill don white coats with the company logo and a CTM sticker to give this small, one-storey concrete building a much-needed paint job. “This is the best help I’ve had to date,” she beams.

All the students are children of farmers, Brollo says. “This is a humble community, very collaborative. Everybody here belongs to the cooperative.”

In a small field at the back of the school, Mark Brooks and Juan Bernad fix up primitive seesaws. At the front, primary age children hand out sandwiches and cakes. A corporate film crew, flown in from the US, is on hand to record this more visible example of the kind of corporate social responsibility Cargill is planning for the region.

Afterwards, Brollo hands out a “diploma” to everyone involved in the painting, signed by each of the students.

But there is still much to be done by the cooperative elsewhere. A warehouse will be built at CTM’s headquarters. Troy Rhonemus’s biomass recycling system has yet to be decided. Some farmers, such as Juan Houchur, say they could be harvesting as early as December this year. And there is a palpable optimism and sense of purpose in the air.

Outside the school, another farmer, Andrade Blas, sits in the sun. He has been farming for 26 years and has 35 hectares, mostly citrus. He is one of 300 farmers CTM has recruited into this first harvest. The co-op aims to have 2,500 growing the new stevia within three years.

Like many farmers in the region, Blas talks highly of the co-op. “It is always there at your service, it is a different type of producer,” he says. “I have been growing stevia since 1992. But now it is a new plant, it looks better. I am confident in this plant.”

Building resistance

In a baseball cap and shorts, his toes poking out of his battered brown sneakers, 15-year-old Goméz Fernando is tending his father’s farm. Here, an early crop of stevia was planted last year as one of the trials. “It went well, it was easy to grow,” Fernando says. “We got a lot of leaves. My father was happy.”

But the crop, one of many trial batches grown by CTM farmers, was not perfect. Mark Brooks points out a yellowing of the leaves on some of the big, bushy plants, and the tiny holes left by insects.

Pesticides are not encouraged and used infrequently, so both CTM and Cargill have to work out first what is an acceptable level of bug and fungus damage, and second how to improve the plant’s resistance to threats like these. “We are trying to minimise risk,” says Guillermo Andersson. “We are making varieties with resistance to drought and to illness.”

Stevia supply chain commitments for Truvia

• We will reduce our carbon footprint by 50% in 2015 from a 2010 baseline to become carbon neutral by 2020.
• We will ensure all processed water is returned to the same quality for which it was taken and reduce net depletion by 25% by 2020.
• We will reduce waste by 50% across the supply chain in 2015 in efforts to become zero waste by 2020.
• We will not grow stevia on conservation or protected land and will support biodiversity by implementing and auditing against sustainable agricultural practices to protect and conserve natural resources.
• We will set clear minimum and progressive criteria to ensure that the conditions for the production and trade of stevia are economically fair and environmentally responsible.
• We will guarantee a price is paid to farmers to cover production cost based on quality and the implementation of sustainable agricultural practices to protect and conserve natural resources.
• We will provide support to producers to invest in education, healthcare, farm improvements, technical assistance to increase yield and quality to increase income.
• We will actively participate in long-term partnerships and engage as a team to improve the communities where stevia is grown and processed.
• We will implement Sedex (Supplier Ethical Data Exchange) self-assessment audits throughout the supply chain, validate findings with an independent auditor, and share information with our customers.

This story is part of a special corporate focus written and produced by Ethical Corporation and supported by Cargill. For more information about Ethical Corporation’s occasional corporate focus series or other publishing opportunities please contact andrew.bold@ethicalcorp.com.