Sustainable Sourcing Guide for High-Impact Commodities About FMI The Food Marketing Institute proudly advocates on behalf of the food retail industry. FMI’s U.S. members operate nearly 40,000 retail food stores and 25,000 pharmacies, representing a combined annual sales volume of almost $770 billion. Through programs in public affairs, food safety, research, education and industry relations, FMI offers resources and provides valuable benefits to more than 1,225 food retail and wholesale member companies in the United States and around the world. FMI membership covers the spectrum of diverse venues where food is sold, including single owner grocery stores, large multi-store supermarket chains and mixed retail stores. For more information, visit www.fmi.org and for information regarding the FMI Foundation, visit www.fmifoundation.org.
About the FMI Sustainability Executive Committee (SEC) The FMI Sustainability Executive Committee (SEC) works to identify and prioritize issues for action, develops tools and resources on sustainability for the industry, and makes recommendations to FMI’s Board and the industry on policy and program development. This group oversees a number of working groups including: sustainable seafood, water stewardship, social responsibility, pollinator issues and food waste.
For many free tools and resources on sustainability visit FMI’s Sustainability page, http://www.fmi.org/industry-topics/sustainability.
FMI expresses our deep gratitude to the members of the Sustainability Executive Committee for their development of this toolkit, and in particular Nate Shepley Streed from Kroger and his Sustainable Sourcing Committee, noted below by the asterisk.
Suzanne Lindsay-Walker Sonya Fiorini Karen Meleta Sheila Samuelson (Chair) Loblaw Companies Limited Wakefern Food Corporation National Co+op Grocers The Kroger Co. Patrick R. Hensley George Parmenter Nate Shepley Streed Patti J. Olenick Hy-Vee, Inc. Hannaford Supermarkets (Sustainable Sourcing (Past Chair) Subcommittee Chair)* Weis Markets, Inc. Michael Hewett Christopher Ratto* The Kroger Co. Publix Super Markets, Inc. Safeway Inc. Joseph Berman Scott Tudor Price Chopper Supermarkets Amy Kirtland* John Reilly Sobeys Inc. Nature’s Best Daymon Worldwide Inc. Lisa Boyd Jason Wadsworth* Target Corporation Neil Kudrinko Jihad M. Rizkallah* Wegmans Food Markets, Inc. Kudrinko’s Ltd. Ahold USA Tony D’Onofrio* Jeanne von Zastrow Town & Country Markets, Inc. Steve LaBard Carl Salamone Food Marketing Institute Unified Grocers, Inc. Wegmans Food Markets, Inc. sustainable sourcing of high-impact commodities
Environmental, social and corporate governance are the “High-impact” commodities have sensitive social, fundamental sustainability performance metrics for today’s environmental, and economic impacts because of where and business community. It requires increasing transparency how they are produced, harvested and/or processed. Some between the business and their customers, associates and examples of high-impact commodities include: sugarcane, shareholders. This performance accountability creates an cocoa, paper/pulp, coffee, soy, palm oil and beef. The opportunity to build trust and loyalty with consumers and Consumer Goods Forum has activated is member base around redefines the boundaries of the competitive landscape. the responsible sourcing of specific high-impact commodities to collectively achieve net zero deforestation by 2020. To learn Today retailers are measuring, tracking and communicating more about the sustainable sourcing work being conducted by these metrics beyond their four walls and it has become CGF’s Deforestation Working Groups, visit: http://sustainability. clear that sustainable sourcing will be critical to the long- mycgforum.com/deforestation.html term success as availability concerns come into question. As commodities compete on a global scale for Earth’s Many commodities can be third-party certified to ensure finite resources, businesses must partner with growers and that products meet specific environmental, economic and/or distributors in the supply chain on initiatives that increase social standards. Credible, third-party verified “eco-labels” yields, consume fewer resources and add to the vitality of may be beneficial for retailers whose customers, associates local communities. Through collaboration, industries can and shareholders are increasingly aware of global reduce stress on the environment and volatility in the cost of sustainability issues and are asking for products that have commodities that businesses depend on for survival. sustainability attributes associated with them. To learn more about different “eco-labels”, visit the Eco-label Index at: http://www.ecolabelindex.com/.
Table 1: High-impact commodities and relevant third-party certifications or standards High-impact Commodities Certifications or Standards Sugarcane Bonsucro, Rainforest Alliance, Sustainable Agriculture Network Cocoa UTZ Certified, Rainforest Alliance, Fair Trade USA, Fair Trade International Paper/Pulp Programme for the Endorsement of Forest Certification, Forest Stewardship Council, Sustainable Forestry Initiative Coffee UTZ Certified, Rainforest Alliance, Fair Trade USA, Fair Trade International Soy Round Table on Responsible Soy Palm Oil Rainforest Alliance, Roundtable on Sustainable Palm Oil Beef Global Roundtable for Sustainable Beef
The above table is a sampling, not an extensive list of all certifications and standards.
Sustainable Sourcing Guide for High-Impact Commodities 1 sustainable sourcing: sugarcane situation analysis: Sugarcane is traditionally used as a sweetener but today can be processed into biofuels and bioplastics.
Brazil, China, India, Thailand, and Mexico account for over two-thirds of total sugarcane production.
To grow 1 kg of sugar it takes 1,500-3,000 liters of water. The processing of sugarcane creates wastewater and solid waste that is often The global demand for sugarcane has fueled disposed of into waterways damaging ecological a loss of unique habitats and biodiversity areas and depleting oxygen causing fish kills. in emerging markets as land is cleared for production. There are third-party certifications as well as environmental and social standards that support Land acquisition for sugarcane production has responsibly grown and harvested sugarcane. been linked to social conflict and displacement of indigenous populations as traditional property rights are ignored or overlooked. questions to consider: 1. Where are you sourcing your sugarcane? 3. Are your products certified by an Please provide country/region where raw independent, third-party or meet a set of material was extracted or harvested and environmental/social standards? If so, what processed. certification and/or standard(s)? Ex. Bonsucro, Rainforest Alliance 2. Do you have a Chain of Custody (CoC) system in place that allows for full traceability of this commodity?
more information: http://www.worldwildlife.org http://rsb.org/ http://san.ag/web/ http://www.bonsucro.com/
Sustainable Sourcing Guide for High-Impact Commodities 2 sustainable sourcing: cocoa situation analysis: The U.S. chocolate industry consumes $1.4 billion pounds of cocoa and cocoa products.
The U.S. imports $435 million of cocoa beans that are processed in the U.S. and an additional $335 million in processed cocoa material such as paste, butter and powder.
Forty-seven percent of the total U.S. cocoa bean imports come from the Ivory Coast, which There are third-party certifiers that support supplies more than 40% of the world’s cocoa. sustainably produced and harvested cocoa. Various capacity building programs at the Many small scale cocoa farmers live at or below producer level have been set up over the past the poverty line, face poor working conditions, decade. low wages and child labor.
Inefficient farming techniques have several environmental consequences, such as deforestation, excessive use of pesticides and soil degradation. questions to consider: 1. Where are you sourcing your cocoa? Please 3. Are your products certified by an provide country/region where raw material independent, third-party? If so, by whom? was extracted or harvested. Ex. Fair Trade International, Fair Trade USA, Rainforest Alliance, UTZ Certified 2. Do you have a Chain of Custody (CoC) system in place that allows for full traceability of this commodity?
more information: http://www.utzcertified.org/nl/products/cocoa http://www.sustainabilityconsortium.org
Sustainable Sourcing Guide for High-Impact Commodities 3 sustainable sourcing: paper/pulp situation analysis: Soft timber such as pine and aspen are cut down for the principle use of making pulp. This pulpwood is used to make paper and pulp- based products. In some parts of the world, pulpwood is a byproduct of the timber industry. The destruction of the natural forests threaten Some timber is grown in well-managed forests, biodiversity and overall ecological health. however, illegal logging, destruction of old- growth forests and poorly managed forestry High Conservation Value Areas (HCVA) assist practices still exist. forest owners and stakeholders to decide which part of the forest must be given higher priority Several natural forests in New Guinea, Southern protection. Chile, the Boreal in Canada, Borneo and the Atlantic forest in Brazil are at risk due to the There are multiple third-party certifiers that demand for pulpwood. help protect biodiversity and promote social and economic management of forest lands. questions to consider: 1. Does your company have a paper/pulp 5. What percent of your company’s paper/ policy or guidelines in place to ensure pulp products is made from post-consumer the responsible sourcing of paper/pulp recycled fiber? products? 6. If making environmental marketing claims, 2. Where are you sourcing paper/pulp-based do they meet the standards set forth by products? Please provide country/region the Federal Trade Commission’s Part where timber was harvested. 260—Guides for the Use of Environmental Marketing Claims? 3. Do you have a Chain of Custody (CoC) system in place that allows for full traceability and legality of this commodity?
4. Are your products certified by an independent, third-party? If so, by whom? Ex. PEFC (Programme for the Endorsement of Forest Certification), FSC (Forest Stewardship Council), SFI (Sustainable Forestry Initiative)
more information: ftc.gov (FTC’s Green Guides) worldwildlife.org
Sustainable Sourcing Guide for High-Impact Commodities 4 sustainable sourcing: coffee situation analysis: More than 25 million people in the world depend on the production of coffee for their livelihoods.
Coffee is one of the world’s most traded commodities and is the economic mainstay for many countries throughout Latin America, Asia and Africa.
Most of the coffee-dependent workers worldwide are in developing countries, such There are multiple third-party certifiers that help as Mexico, Brazil, Vietnam, Colombia and protect biodiversity, deliver financial benefits Indonesia. to farmers and foster a culture of respect for workers and local communities. Many small-scale farmers in these coffee- growing regions face challenges, including poverty, commodity price fluctuations and increasingly erratic rainfall patterns. questions to consider: 1. Where are you sourcing your coffee? 3. Are your products certified by an Please provide country/region where raw independent, third-party? If so, by whom? material was extracted or harvested. Ex. Fair Trade International, Fair Trade USA, Rainforest Alliance, UTZ Certified 2. Do you have a Chain of Custody (CoC) system in place that allows for full traceability of this commodity?
more information: fairtrade.net fairtradeusa.org rainforest-alliance.org utzcertified.org/en/products/coffee
Sustainable Sourcing Guide for High-Impact Commodities 5 sustainable sourcing: soy situation analysis: Soy is a global source of protein and vegetable oil.
Soy is available in three forms: whole soybeans, soybean oil (derivative), and soybean meal (derivative).
Soybean meal is currently the largest source of animal feed in the world. Thus, soybeans are consumed indirectly by humans through products like meat (chicken, pork and beef), Soybean production in developing countries has dairy, eggs and farmed fish. been associated with negative social impacts as small-scale farmers and communities are China is currently the world’s largest importer of pushed off their land. This also creates an soy and it’s projected to increase its purchasing environment of exploitation for workers. by 59% by 2020. There are third-party certifiers that support The majority of the increase in soy production sustainably produced and harvested soy. has been in Brazil. This has contributed to massive deforestation in the Amazon, Atlantic These organizations verify that the volumes are Forests and the Cerrado region. traceable to farms and plantations that support best management practices that reduce the environmental and social impacts. questions to consider: 1. Where are you sourcing your soy? Please 3. Are your products certified by an provide country/region where raw material independent, third-party? If so, by whom? was extracted or harvested. Ex. Round Table on Responsible Soy (RTRS)
2. Do you have a Chain of Custody (CoC) system in place that allows for full traceability of this commodity?
more information: http://www.theconsumergoodsforum.com/sustainability-about-pillar responsiblesoy.org
Sustainable Sourcing Guide for High-Impact Commodities 6 sustainable sourcing: palm oil situation analysis: Palm oil has become the world’s leading oil crop and accounts for roughly 30% (50 million tons) of the global vegetable oil production.
Palm oil is derived from the mesocarp of the fruit and is typically used in food products as a cooking oil, shortening, margarine, milk fat replacer or cocoa butter substitute.
Palm kernel oil is derived from the seed or • Increase in greenhouse gas emissions kernel and is typically used in the oleochemical by burning practices and plantation industry in soaps, detergents, toiletries and development on deep peat land cosmetics. • Loss of habitat for critically endangered species including the orangutan and Palm oil is only cultivated in tropical regions of Sumatran tiger and growing social conflicts Southeast Asia, Central and South America and between indigenous communities and palm Africa. growers Indonesia and Malaysia are the largest There are third-party certifiers that support producers of palm oil in the world. sustainably produced and harvested palm oil. Producing unsustainable palm oil has been These organizations verify that the volumes linked to negative environmental and social are traceable to farms and plantations that impacts including: support best management practices that reduce the environmental and social impacts of this • Burning large forests with high conservation growing industry. value areas (HCVA) in preparation for new palm oil plantations questions to consider: 1. Where are you sourcing your palm oil? 3. Are your products certified by an Please provide country/region where raw independent, third-party? If so, by whom? material was extracted or harvested. Ex. Roundtable on Sustainable Palm Oil (RSPO), Rainforest Alliance 2. Do you have a Chain of Custody (CoC) system in place that allows for full traceability of this commodity?
more information: http://www.theconsumergoodsforum.com/sustainability-about-pillar rspo.org rainforest-alliance.org
Sustainable Sourcing Guide for High-Impact Commodities 7 sustainable sourcing: beef situation analysis: The main beef producers in the world are the U.S., European Union and Brazil.
Currently, over two-thirds of the world’s agricultural land is used for maintaining livestock and one-third of the world’s cereal harvest is fed to farm animals.
The most significant direct impact of beef production is the conversion of forest habitat to pasture. This is the most severe in areas in the It can take up to 3,682 liters of water to Amazon where massive clearing of forestland produce 2.2 pounds of boneless beef in the US. has had tremendous impact on biodiversity and In addition to total water consumption, there is ecosystem functions. increasing concern regarding pesticide use and water pollution. Beef production contributes to global warming through the greenhouse gas emissions There are third-party certifiers that support associated with raising beef cattle, specifically sustainably raised beef. methane, nitrous oxide and carbon dioxide. questions to consider: 1. Where are you sourcing your beef? Please 3. Are your products certified by an provide country/region where beef was independent, third-party? If so, by whom? raised and processed. Ex. Global Roundtable for Sustainable Beef
2. Do you have a Chain of Custody (CoC) system in place that allows for full traceability of this commodity?
more information: www.sustainablelivestock.org http://wwf.panda.org/what_we_do/footprint/agriculture/beef gftn.panda.org (global forest and trade network) rainforest-alliance.org us.fsc.org sfiprogram.org
Sustainable Sourcing Guide for High-Impact Commodities 8 2014
For questions regarding the guide, please contact Jeanne von Zastrow Senior Director of Sustainability at the Food Marketing Institute, at [email protected].