The big food companies still have work to do before they can engage their suppliers effectively, a new report finds
As consumers grow increasingly concerned about what they buy and from whom, more is being asked of leading food and drink companies. The biggest 10 collectively generate revenues greater than $1bn a day. Hugely powerful, they have the ability to address hunger and poverty within their supply chains – principally by focusing on smallholder farmers and plantation workers.
So how are they doing?
Not great, according to Behind the Brands, a new report issued by Oxfam America, which uses a scorecard to rank food and drink companies according to social and environmental performance.
There has been little progress protecting communities from land and water grabs. None has attempted to find out how many women farmers are involved in their supply chains or in which types of farming activities women are engaged. Only one, Unilever, has incorporated specific supplier guidelines to promote improved conditions for small-scale farmers.
And because companies are overly secretive about their agricultural supply chains, claims of “sustainability” and “social responsibility” are hard to verify.
“We know that none of the companies are reporting across their commodities – where they are buying them from, in what volumes, to what extent certified or not, who their suppliers are,” says Chris Jochnick, a lead researcher on the report. “Without [supply chain] transparency we can’t even have the conversation about whether or not they are really being sustainable.”
Top of the pops
In terms of overall brand performance Oxfam ranked Nestlé first, Unilever second, Coca-Cola third, PepsiCo fourth, Mars fifth, Danone and Mondelez International joint sixth, Kellogg’s and General Mills joint eighth, and AB Foods in 10th place. Unilever scored the highest mark with respect to small-scale farmers, while Nestlé received a top score on transparency owing to the information provided on some commodity sources and audit systems.
“I don't think it’s a question of saying transparency is important. It absolutely is,” says Jane Nelson, director of the corporate social responsibility initiative at Harvard Kennedy School. “The question is ‘how do we practically do it?’.”
The report suggests that the big companies should focus their transparency efforts on their interactions with the major food commodity traders – Archer Daniels Midland, Bunge, Cargill and Louis Dreyfus.
Nelson agrees with this analysis but argues also for a broader approach that takes into account transparency across entire value chains. But this requires new and complex partnership models.
“You need to get all of the major players [involved],” Nelson says. “You need to get governments and large investors to join in, through frameworks like the Equator Principles.”
Getting everyone involved can be done, Nelson adds, citing work by Coca-Cola linking together 50,000 smallholder mango and passion fruit farmers in Kenya and Uganda. The project, co-produced through the Harvard Kennedy School, offers a model adaptable to other countries. But it requires in-depth studies and a great deal of time and effort to interview both internal and external actors on often complex and interlocking issues.
Nelson welcomes Oxfam’s scorecard approach for engendering a competitive spirit intended to drive companies in pursuit of supply chain transparency, and then engaging with small suppliers and the poverty and other social issues they face.
“I would have liked to have seen more focus on recognition of how and where companies are cooperating,” she adds. “There are hundreds of dedicated people inside companies that care just as passionately about [supply chain transparency] as the people at Oxfam, and they need support to say the work they are doing is important.”Eric Marx Food supplier engagement supply chains transparency